Quiz 1 - Value Added Tax

Question 1
Which of the following is not a characteristic of value added tax?

It is an excise tax

It is a direct tax.

It is a proportional tax

It is a national tax

Question 2

Which of the following is not subject to business tax?

All of the above

Gratuitous transfer

Sale of goods, services and lease of property in the ordinary course of trade or business.

Importation of goods into the Philippines, whether for personal or business use

Question 3

Which is correct?

All of the above

Without a business pursued in the Philippines (except importation) by the taxpayer, value added tax cannot be imposed.

Services rendered in the Philippines by a non-resident foreign person shall be considered as being rendered in the course of trade
or business even if the performance is not regular.

“In the course of trade or business” means the regular conduct or pursuit of a commercial or an economic activity, including
transactions incidental thereto, by any person regardless of whether or not the person engaged therein is a non-stock, non profit
private organization or government entity.

Question 4

Pina Carenderya Corporation (PCC) is a vat registered company which has been engaged in the catering business for the past 10
years. It has invested a substantial portion of its capital on flat wares, table linens, plates, chairs, catering equipment, and delivery
vans. PCC sold its first delivery van, already 10 years old and idle to Northern Gravel and Sand Corporation (NGSC), a
corporation engaged in the business of buying and selling gravel and sand. The selling price of the delivery van was way below its
acquisition cost. The sale of delivery van by PCC to NGSC is:

The sale is subject to vat being a transaction incidental to the catering business which is a vat registered activity of PCC.

An isolated transaction which is not subject to vat.

An unrelated transaction to PCC, hence, not subject to vat

None of the above

Question 5

Which statement is wrong?

Transactions considered "in the course of trade or business". and therefore subject to the business taxes include:

Regular conduct or pursuit of a commercial or an economic activity by a stock private organization.

Isolated services in the Philippines by non-resident foreign persons.

Isolated sale of goods or services.

Regular conduct or pursuit of a commercial or an economic activity by a non-stock, non-profit private organization.

Question 6
The term “in the course of trade or business" does not include

Incidental business transactions.

Transactions by any person, regardless of whether or not the person engaged therein is a non-stock, non-profit private organization
(irrespective of the disposition of its net e income and whether or not it sells exclusively to members) or government entity.

Regular conduct or pursuit of a commercial or economic activity.

None of the above

Question 7

1 / 1 pts

Which of the following is incorrect?

An article subjected to excise tax may be subjected to vat

None of the above

A taxpayer may be subjected both to vat and percentage tax

An article exempt from vat may also be exempt from percentage tax

Question 8

Which of the following is a VAT-subject event?

Change in the trade or corporate name of the business

Consolidation of corporations.

Approval of a request for cancellation of registration due to a desire to revert to exempt status after the lapse of three (3)
consecutive years from the time of registration by a person who voluntarily registered

Merger of corporations

Question 9

Which of the following persons is not liable to pay Output VAT?

Those who are VAT-registered taxpayers.

Franchise grantees of radio/and or TV broadcasting whose gross annual receipts do not exceed P10,000,000

Importers of goods not in the ordinary course of business.

Those engaged in the selling or leasing of goods, property or services whose gross sales or gross receipts during the year or in any
12-month period exceeds P3,000,000

Question 10

Which of the following has an option to register under the VAT system?

I. Common carriers by land transporting passengers, the gross receipts of which do not exceed P3,000,000.

II. Radio and/or television broadcasting companies whose annual gross receipts of the preceding year exceeds P10,000,000.

III. Operator of cockpit, the receipts of which do not exceed P3,000,000 during the year.

IV. Seller of vat-subject services the gross receipts of which do not exceed P3,000,000

IV only

Question 11

The following data were provided by spouses Pedro and Ana. In 2021, Pedro's gross receipts from his practice of profession was
P2,850,000 while her wife, Ana, has gross sales of P2,200,000 derived from her trading business. Assuming they are not vat
registered, will they be subject to vat?
No, because for purposes of vat threshold, husband and wife shall be considered as separate taxpayers.

None of the above

Yes, because their gross receipts/sales are not specifically exempt from vat as provided in the Tax Code.

Yes, because their aggregate gross receipts/sales exceeded the vat threshold of P3,000,000

Question 12

Rudy is engaged in the sale of chicken in various forms. The following are Rudy's sales:

Live chickens 8,510,000

Fighting cocks 300,000

Fresh chicken meat 210,000

Cut chicken meat 7,700,000

Boiled chicken meat 2,220,000

Roasted chicken meat 510,000

Smoked chicken meat 5,310,000

Salted chicken me 4,640,000

Chicken nuggets 2,130,000

Chicken cubes 4,970,000

Chicken hotdog 4,500,000

Total P41,000,000

How much are the VAT-exempt sales?

29,100,000

Question 13

One of the following is not an activity subject to VAT:

Sublease of real property in the course of business

Importation of ordinary feeds for poultry chicken

Sale in retail of goods by a dealer

Sale of Bamboo poles by a dealer

Question 14

Statement 1: Sale of drugs and medicines of pharmacy run by the hospital to outpatients are subject to VAT.
Statement 2: Pharmacy items used in the performance of medical procedures in hospital units such as in the operating and delivery
rooms and by other departments are considered part of medical services rendered by the hospital, hence, not subject to vat.

A. B. C. D.

Statement 1 True True False False

Statement 2 True False True False

Question 15

Where even if there is a business, there is no vat to be imposed beginning January 1, 2021 in the following cases:

I. Sale of real properties not primarily held for sale to customers or held for lease in the ordinary course of trade or business.

II. Sale of real properties for socialized housing

III. Sale of residential house and lot and other residential dwellings valued at P3,199,200 and below.

all of the choices

Question 16

In 2020, Dagem purchase a condominium unit from his friend, Ronald (condo unit owner), for P3,000,000 and a parking lot from the
subdivision developer for P800,000. The correct amount of vat is:

P96,000 (P800,000 x .12)

Question 17

In 2021, Dagem purchase a condominium unit from Central Realty Corporation for P2,500,000 including a parking space for
P800,000. The correct amount of vat is:

P96,000

Question 18

1 / 1 pts

Andong, VAT-registered real estate dealer, transferred a parcel of land held for sale to Camella Realty Corporation sold the following
real properties during 2021 the taxable year:

3 units of residential house and lot at P2,500,000 each P7,500,000

8 residential lots at P1,000,000 each 8,000,000

1 commercial lot at P3,000,000 3,000,000

P11,000,000

Question 19

What is the quantitative threshold for monthly rental of residential unit to be exempted from output VAT?

not exceeding P12,000 per month

not exceeding P15,000 per month

not exceeding P10,000 per month

not exceeding P20,000 per month

Question 20

Determine the correct statement from the following:

In cases where a lessor has several residential units for lease, some are leased out for a monthly rental per unit of not
exceeding P15,000 while others are leased out for more than P15,000 per unit, his tax liability will be:

The gross receipts from rentals not exceeding P15,000 per month per unit shall be exempt from vat regardless of the aggregate
annual gross receipts.

The gross receipts from rentals exceeding P15,000 per month per unit shall be subject to vat if the annual gross receipts from said
units including the gross receipts from units leased out for not more than P15,000 exceed P3,000,000.

Question 21 (?)

Statement 1: Lease of a parking lot attached to a residential unit at P8,000 per month is exempt from vat.

Statement 2: Lease of eight (8) residential units at P18,500 per month is subject to vat.

A. B. C. D.

Statement 1 True True False False

Statement 2 True False True False

Question 22

1 / 1 pts

Goblin Realty, a real estate dealer, sold a commercial lot amounting to P800,000. This transaction is

subject to vat

Question 23

Which of the following sale is subject to 12% VAT?

Sale, importation, printing, or publication of books and any newspaper, magazine, review, or bulletin which appears at regular
intervals with fixed prices for subscription and sale, and which is devoted principally to the publication of paid advertisements.

Sale of books, newspapers, magazines in electronic format.

Question 24

Which rendition of services is not subject to VAT?

Transportation services by domestic common carries by land relative to cargoes from one place to in the Philippines to another
place in the Philippines

Transportation services by domestic common carries by air relative to cargoes from one place to in the Philippines to another place
in the Philippines

Transportation services by domestic common carries by sea relative to passengers from one place to in the Philippines to another
place in the Philippines

Transportation services by domestic common carries by land relative to passengers from one place to in the Philippines to another
place in the Philippines

Question 25

Which of the following is exempt from VAT?

Common carriers transporting passengers by sea within the Philippines

Common carriers transporting passengers by land within the Philippines

Common carriers transporting cargoes by air within the Philippines

Common carriers transporting passengers by air within the Philippines

Question 26

Statement 1: Sale of drugs and medicines prescribed for the treatment/and or prevention of diabetes, high-cholesterol and
hypertension is exempt from vat.

Statement 2: Importation of drugs and medicines prescribed for the treatment/and or prevention of diabetes, high-cholesterol and
hypertension is exempt from vat beginning January 1, 2020.

A. B. C. D.

Statement 1 True True False False

Statement 2 True False True False

Question 27

Statement 1: The word "vat exempt" shall prominently be included in the invoice issued for the sale of drugs and medicines
prescribed for the treatment/and or prevention of diabetes, high-cholesterol and hypertension.

Statement 2: The word sale of drugs not included in the list of vat exempt drugs and medicines prescribed for the treatment/and or
prevention of diabetes, high-cholesterol and hypertension as identified and published by the Food and Drug Authority (FDA) shall be
subject to vat.

A. B. C. D.

Statement 1 True True False False

Statement 2 True False True False

Question 28

In case of barter, sale, or exchange of real property, gross selling price means:

Appraised value or assessed value, whichever is higher.

Fair market value or consideration, whichever is higher.

Zonal value or consideration, whichever is higher.

Zonal value or assessed value, whichever is higher.

Question 29

All of the following are requisites for discount to be allowed as a deduction from the selling price, except:

Subject to condition

Amount of discount is reflected in the invoice.

Determined and granted at the time of sale.

Recorded in the seller's books of accounts.

Question 30

Gross selling price includes all of the following except one. Which one?

Total amount which the purchaser is obligated to pay to the seller.

Value-added tax.

Total amount which the purchaser pays to the seller.

Excise tax.

Question 31

Statement 1: On a sale of real property on installments by a real estate dealer, the seller shall be subject to VAT on the
installment payment received, including interests and penalties for late payment.

Statement 2: On sale of real property on installments by real estate dealer, where the Vat is computed not on the consideration in
the deed of sale but on the higher fair market value, the Vat must be billed separately with a specific mention that it is based
on the market value of the property.

Both statements are correct

Question 32

Alog Inc. is a real estate dealer. Details of its sales during the year showed the following:

Date of sale June 2, 2020

Consideration in the deed of sale P5,000,000

Fair market value in the assessment rolls 4,800,000

Zonal Value 5,200,000

Schedule of payments:

June 2, 2020 1,000,000

June 2, 2021 2,000,000

June 2, 2022 2,000,000

How much is the output tax to be recognized for the June 2, 2022 payment? P249,600

Assuming that the scheduled payment on June 2, 2020 is P2,000,000, how much is the output tax to be recognized for the
June 2, 2022 payment? P0

Question 1

Ratio of initial payment over SP = 1/5 = 20%

Type of Sale = Installment Sale

Output Val, June 2022 = 2/5 x 5,200,000 X 12% = P249,600

Question 2

Ratio of initial payment over SP = 2/5 = 40%

Type of sale = deferred sale; treated as cash sale

The entire output vat will be paid on 2020

Liability 2022 = P0

Question 33

Statement 1: On a sale of real property on installments by a real estate dealer, the seller shall be subject to VAT on the
installment payment received, including interests and penalties for late payment.

Statement 2: On sale of real property on installments by real estate dealer, where the Vat is computed not on the consideration in
the deed of sale but on the higher fair market value, the Vat must be billed separately with a specific mention that it is based on the
market value of the property.

Both statements are correct

Question 34

Which of the following transactions is not a transaction deemed sale and therefore it will not be subject to VAT?

Distribution of property dividends to stockholders in the form of inventories

Consumption by the sole proprietor of existing goods of the business

Transfer of assets of corporations to another corporation due to merger or consolidation

Dacion en pago to creditors in the form of investment property

Question 35

Mr. Andrew, VAT-registered real estate dealer, transferred a parcel of land held for sale to his son as gift on account of his
graduation. For VAT purposes, the transfer is:

Not subject to VAT because it is a gift

Not subject to VAT because it is subject to gift tax

Subject to VAT because it is considered an actual sale

Subject to VAT because it is a deemed sale transaction

Question 36

Melan Distribution Inc., a vat taxpayer, had the following data in a month:

Cash sales P200,000

Open account sales 500,000

Consignment:

0 to 30 days old (on which there were remittances from consignees of P200,000)
600,000
 31 to 60 days old 700,000

61 days old and above 900,000

How much is the output tax?

P216,000

Cash sales P200,000

Open account sales 500,000

Remittance from 0-30 days consignment 200,000

Consignment, 61 days old and above (TDS) 900,000

Total P1,800,000

x VAT rate 12%

Output VAT P216,000

Question 37

Statement 1: ECOZONEs are separate customs territory by fiction of law.

Statement 2: Sale to an entity located in an ECOZONE, even though such entity is not qualified to avail income tax holiday or 5%
gross income tax, is a zero-rated sale.

Both statements are true

Question 38

Which of the following is an export-oriented enterprise?

Katya Corporation. Its export sales exceed 50% of the total annual production of the preceding taxable year.

Aubrey Corporation. Its export sales exceed 50% of the total annual production of the three preceding taxable year.

Assunta Corporation. Its export sales exceed 70% of the total annual production of the preceding taxable year.

Maui Corporation. Its export sales exceed 70% of the total annual production of the three preceding taxable year.

Question 39

Which of the following is a zero-rated sale?

sale of raw materials or packaging materials to a nonresident buyer for delivery to a resident to be used in manufacturing,
processing, packing or repacking in the Philippines of the said buyer's goods and paid for in acceptable foreign currency and
accounted for in accordance with the rules and regulations of the Bangko Sentral ng Pilipinas (BSP).

sale of raw materials or packaging materials to a nonresident buyer for delivery to a resident local export-oriented enterprise to
be used in manufacturing, processing, packing or repacking in the Philippines of the said buyer's goods and paid for in acceptable
foreign currency and accounted for in accordance with the rules and regulations of the Bangko Sentral ng Pilipinas (BSP).

sale of finished goods to a nonresident buyer for delivery to a resident to be used in manufacturing, processing, packing or
repacking in the Philippines of the said buyer's goods and paid for in acceptable foreign currency and accounted for in accordance
with the rules and regulations of the Bangko Sentral ng Pilipinas (BSP).
sale of finished goods to a nonresident buyer for delivery to a resident local export-oriented enterprise to be used in manufacturing
processing, packing or repacking in the Philippines of the said buyer's goods and paid for in acceptable foreign currency and
accounted for in accordance with the rules and regulations of the Bangko Sentral ng Pilipinas (BSP).

Question 40

Use the following for the next three questions:

Abal Corporation is a local export oriented enterprise engage in the business of manufacturing of sardines. In 2021, it sold to Mr. Bo
Dats of China under the term FOB Shipping Point.

Mr. Dats wants a specialized packaging material for his sardines. He ordered the said packaging materials from another Philippine
Company, JAO Packaging Inc. (JPI). It was agreed that JPI will deliver the packaging materials to Abal Corporation so that the latter
can use the same for the sardines to be delivered to Mr. Dats in China.

What is the tax treatment for vat purposes of the sale of Abal Corporation to Mr. Dats?

Subject to 0%

Based on the preceding number, what is the tax treatment of the sale of JPI to Mr. Dats?

Subject to 12%

Subject to 0% only if Abal Corporation's export sales exceed 70% of total annual production in the current year. Supposed
Abal Corporation bought packaging materials from JPI, what is status of the sale?

Subject to 12%

Question 41

Which of the following items is a VAT-subject receipt by a lessor?

loan to the lessor

security deposit for the faithful performance of certain obligations of the lessee

option money for the property

prepaid rentals if the lessor uses the accrual method of accounting

Question 42

In order to claim input VAT from purchases of services, the proper documentation is:

VAT invoice

VAT delivery receipt

VAT statement of account

VAT official receipt

Question 43

Which statement is not correct?

The excess input taxes of a taxable month arising from domestic sales may be carried over to the succeeding month.

The excess input taxes of a taxable quarter arising from domestic sales may be carried over to the succeeding quarter.

The excess input taxes arising from exports sales may be refunded

The excess input taxes of a taxable period arising from domestic sales may be refunded.

Question 44
Statement 1: Beginning taxable year 2022, the input vat on purchase of capital goods with an aggregate value of more than
P1,000,000 for one month period shall be spread over 60 months if the life of capital goods is equivalent to 5 years or more.

Statement 2: The input vat on purchase of capital goods with an aggregate value of more than P1,000,000 for one month period
shall be spread over the life of property if the life of property is less than 5 years.

Both statements are incorrect

Question 45

A person subject to Vat for the first time can have an input tax out of the inventory of goods. material and supplies on
hand at the time he become liable. This is called:

Value added tax deemed paid

None of the above

Transitional input tax

Presumptive input tax

Question 46

A taxpayer registered under the VAT system on January 1, 2021. His records during the month show:

Value of inventory as of December 31, 2020 purchased from VAT-registered persons P112,000

VAT paid on inventory as of December 31, 2020 12,000

Value of inventory as of December 31, 2020 purchased, from non-VAT persons 518,000

Sales, net of VAT 281,000

Purchases during the month, net of VAT 70,000

Purchases during the month of vat exempt goods 50,000

The VAT payable should be:

P12,720

Output VAT (281,000 x 12%) P33,720

Less:

Purchases (P70,000 x 12%) (8,400)

Transitional Input VAT (Actual)

Actual P12,000

Vs. 2% x (P112,000 + 518,000) P12,600 (12,600)

VAT Payable P12,720

The 2% Transitional input vat shall be multiplied from the beginning inventory regardless of whether it was acquired from vat
registered or non-vat registered suppliers

Question 47

Meelka Corporation, a manufacturer, had the following data for the first month of 2021:

(First year as a VAT Taxpayer)

Sales

Export sales P2,000,000

Domestic sales (net) 1,000,000

Purchases:

Raw materials 300,000

Services 100,000

Machinery (useful life is 2 years) 400,000

On January 1, 2021, the company had inventories and taxes paid thereon as follows:

Cost VAT paid

Raw materials P120,000 P2,000

supplies 40,000 4,000

During the month, additional raw materials were purchased from another enterprise with a total invoice value of P61,600, not
included above. The VAT payable of Meelka is:

Correct!

P11,000

P72,000

P66,000
P57,000

Output VAT (P1,000,000 x 12%) P120,000

Less:

Purchases (P300k + 100k + 400k***) x 12% (96,000)

Additional purchases P616,600 x 3/28) (6,600)

Transitional input vat (higher)

RAW MATERIALS:

Actual P2,000

Vs. 2% x P120,000 2,400 (2,400)

SUPPLIES:

Actual P4,000

Vs. 2% x P40,000 800 (4,000)

VAT payable P11,000

The input vat on the purchase of capital goods (machinery) shall not be amortized over its useful life because the acquisition cost
for the month did not exceed P1,000,000.

The TIV for the raw materials and Supplies shall be computed separately.

Question 48

Paypay is a producer of cooking oil from coconut and corn. Previously exempt from value added tax, he became subject to value
added tax on January 1, 2020. For January 2020, sales, vat not included, amounted to P700,000. Paypay had the following other
data, inclusive of vat if applicable, for the month of January:

Inventory, January 1, 2020: Cost

Packaging materials purchased from vat suppliers P22,400

Supplies purchased from vat suppliers 11,200

Purchases during the month:

Purchases during the month from coconut and corn farmers 330,000
Purchases during the month from vat suppliers:

Packaging materials P56,000

Supplies 16,800

The correct amount of transitional input tax should be P3,600

The amount of presumptive input tax should be P13,200

The total amount of creditable input taxes should be P24,600

The value added tax payable for the month should be P59,400

Question 1

Output VAT (P700,000 x 12%) P84,000

Input VAT:

TIV (P22,400 x 3/28) vs (P22,400 x 2%) whichever is higher P2,400

TIV (P11,200 x 3/28) vs (P11,200 x 2%) whichever is higher 1,200

Presumptive (P330,000 x 4%) 13,200

Actual input VAT for January 2020 from purchases of materials and supplies
[(56,000 + 16,800) x 3/28] 7,800 (24,600)

VAT Payable P59,400

Question 49

All of the following are allowed presumptive input tax, except for one

Supplier of books and other school supplies.

Manufacturer of refined sugar and cooking oil.

Producers/manufacturers of packed noodles.

Processor of sardines, mackerel and milk.

Question 50

In which of the following creditable input VAT is payment of the input VAT not necessary for the crediting of input VAT?

Either A or B

Presumptive input VAT

Transitional input VAT

Question 51

Which of the following products will not allow the manufacturer to claim presumptive input VAT?

Sardines

Coffee

Milk
Cooking Oil

Question 52

The VAT on importation is paid:

The non-resident seller monthly.

The resident buyer monthly.

The non-resident seller before release of goods from customs custody.

The resident buyer before release of goods from customs custody.

Question 53

The vat on importation of goods which are subsequently used or sold in the course of trade or business by a vat registered importer
shall be treated as

I. Tax credit

II. Inventoriable cost

III. Expense

I only

Question 54

Rayang, not a vat registered taxpayer, was sent a package of goods by his brother who was abroad. The package was claimed by
Rayang. The Bureau of Customs required him to pay vat on importation. Rayang refused to pay the vat on the ground that he
was not a vat registered and therefore not an importer. Was Rayang' ground in refusing to pay vat correct?

No, because the package of goods sent by his brother had value.

No, because importations, unless exempted, should be subject to vat

Yes, because the goods were for her personal use, and therefore, he was not an importer.

Yes, because only vat registered importers should be subject to vat

Question 55

Which of the following is not a proper inclusion for the computation of VAT on imported items?

Custom duties on importation

Facilitation expense

Invoice price of the imported items

Excise tax on importation

Question 56

Statement 1: The Vat on importation is always based on the dutiable value of the article imported, as determined by the Bureau of
Internal Revenue, including customs duties and excise taxes.

Statement 2: The importation by a person exempt from Vat is exempt from the tax whatever may be the ultimate destination of the
article imported.

Both statements are not correct

Question 57

Use the following data for the next two (2) questions:

Taxpayer is a VAT registered person. Importation were for: (amounts are vat exclusive)
 For Sale For Own Use

Invoice cost (exchange rate is $1 : P45) $100,000 $5,000

Expenses based on cost:

Freight and insurance 6% 6%

Other expenses up to the point of removal from customs house 4% 4%

Transfer expense from customs house to warehouse in Makati, net of VAT

2% 2%

Selling price of goods imported for sale was P8,000,000.

The value added tax payable on importation is: P623,700

The value added tax payable on sale is P355,200

Question 1

For Sale For Own Use

Invoice Value P4,500,000 P225,000

Add: additional expenses up to point of removal from customs house (10%)

450,000 22,500

Total P4,950,000 P247,500

Vat Rate 12% 12%

Input Vat on Importation P594,000 P29,700

TOTAL Vat on Importation P623,700

Question 2

Output Vat P960,000

Less: Vat in importation (For Sale) (594,000)

Input vat on transfer from BOC to warehouse (P4,500,000 x 2% x 12%) (10,800)

VAT Payable P355,200

Question 58

Unless exempt under the law, sale of goods or services to the government or any of its political subdivisions, instrumentalities or
agencies, including government-owned or controlled corporations (GOCCs) shall be subject to vat rate of:

12%

Question 59

Prior to 2021, what institution is required to deduct and withhold a final vat of 5% on the purchase of goods or services subject to
vat?

National government or any political subdivision thereof

Government-owned or controlled corporations

Both (a) and (b)

Question 60

Beginning 2021, what institution is required to deduct and withhold a creditable vat of 5% on the purchase of goods or services
subject to vat?

Government-owned or controlled corporations

National government or any political subdivision thereof

Both (a) and (b)

Question 61

Ariel sold office supplies to the City of Davao on April 1, 2021. The City of Davao shall remit the 5% creditable vat to the BIR on
or before:

May 10, 2021

Question 62

Loreng sold office supplies to the City of Davao on April 28, 2021. The City of Davao shall remit the 5% creditable vat to the BIR on
or before:

May 10, 2021

Question 63

Which of the following statements is incorrect in relation to the sale of goods?

The VAT-registered supplier may refuse the withholding of VAT as long as it is willing to pay the full 12% VAT.

The sale is subject to creditable withholding vat of 5%.

The GOCC shall remit the withholding vat to the BIR within 10 days following the end of the month the withholding was made.

The GOCC shall withhold P25,000 vat.

Question 64

A VAT-registered trader has the following transactions for the month of July 2020:

Sale of goods to private entities, net of VAT P2,500,000

Purchases of goods sold to private entities, gross of 12% VAT 896,000

Sales to a government owned corporation (GOCC), net of VAT 1,500,000

Purchases of goods sold to GOCC, net of 12% VAT 700,000

Purchases of Machineries, gross of VAT, useful life is 6 years 11,200,000

How much is the VAT payable to the BIR? P191,500

Based on the preceding number, how much is the input tax closed to expense (income)? P13,500

Question 1

OUTPUT VAT P480,000

Less: INPUT VAT

Private (96,000)

SIV (105,000)

Allocated Input VAT (1,200,000/60 x 2.5/4) (12,500)

5% withholding from the government (75,000)

VAT Payable P191,500

Question 2

Total actual input vat = P96,000 + 20,000 + 84,000 = P200,000

Allowed = P213,500

Income= P13,500

Question 65

Use the following data for the next three (3) questions:

Florida Haven, vat registered, offers different services to its guests. The following data taken from the books of the taxpayer are for
the first quarter of 2021:

Revenues Collections Input vat

Hotel rooms P2,000,000 P1,500,000

Dining Hall:

Sale of food and refreshments 1,000,000 850,000

Sale of wine, beer and liquor 700,000 650,000

Disco:

Sale of food and refreshments 600,000 550,000

Sale of wine, beer and liquor 500,000 450,000

Input vat not directly attributable to any of the business

P400,000
activities

How much is output vat for the quarter? P360,000

How much is the creditable input vat for the quarter? P300,000

How much is the vat payable for the quarter? P300,000

Correct answer

Question 1

Gross receipts from:

Hotel rooms P1,500,000

Dining hall (P850k + 650k) 1,500,000

Total gross receipts subject to vat P3,000,000

x Vat rate 12%

Output vat P360,000

Question 2

Gross receipts subject to vat P3,000,000

Gross receipts subject to percentage tax (amusement tax under Sec. 125, NIRC) 1,000,000

Total gross receipts P4,000,000

Ratio of vatable sales over total sales 75%

Input vat available P400,000

 x 75%

Creditable input vat P300,000

Question 3

Output vat P360,000

Less: creditable input vat (300,000)

Vat Payable P60,000

Question 66

Eufer Clinic, a VAT-registered entity, performed a prosthetic surgery on the legs of Loyd, a person with disability. The total cost of
medical operation was P500,000. Being a disabled person, Loyd received 20% discount from Eufer. How much is the total amount
to be paid by Loyd?

P400,000

Amount to be paid = P500,000 x 80% = P400,000

Question 67

Statement 1: Sale of basic and prime commodities to Senior citizens (SC) are not exempt from value added tax.

Statement 2: Sale of basic and prime commodities to Persons with disability (PWD) are not exempt from value added tax.

Both statements are correct

Question 68

_________ are goods "vital to the needs of consumers, for their sustenance and existence" while prime commodities are goods that
are "essential" to them.

basic necessities

Question 69

Which of the following statements is correct?

Goods and services covered by the 20% discount comes with absolute VAT exemption.

A senior citizen who is also incidentally a PWD would not be entitled to cumulative benefits. They can only claim the special
discount as a PWD or as a senior citizen, not both.

Goods covered by the 5% special discount will only be VAT-exempt if they are agricultural and marine food products in their original
state pursuant to Section 109 of the Tax Code.

All of the above

Question 70

Statement 1: Senior citizens (SC) are entitled to 5% special discount on their purchases of basic and prime commodities subject to
the guidelines of the Department of Trade and Industry (DTI) and Department of Agriculture (DA).

Statement 2: Persons with disability (PWD) are entitled to 5% special discount on their purchases of basic and prime commodities
subject to the guidelines of the Department of Trade and Industry (DTI) and Department of Agriculture (DA).

Both statements are correct

Quiz 2 - Percentage Taxes
Question 1

The percentage tax due on Abedayo Line in February is:

a. P10,770
b. P14,370
c. P11,715
d. nil
The total business taxes in the preceding number should be:
a. P10,770
b. P39,180
c. P49,950
d. Nil

Question 2

How much is Philippine Rabbit's

common carrier's tax? D
a. 0
b. 59,040
c. 100,290
d. 159,330

Suppose Philippine Rabbit is instead engaged in the transport of cargoes, how much is Philippine Rabbit's common carrier's tax?A
a. 0
b. 59,040
c. 100,290
d. 159,330

Question 3
Gallaxy Transport Corporation is a holder of franchise from the government to offer passenger and cargo transport operations by land. Its gross
receipts from passenger operations amounted to P10,000,000 while its gross receipts from cargo operations amounted to P2,000,000.
How much is the franchise tax due for the month?a. P300,000
b. P540,000
c. P1,440,000
d. P0
Using the same data in the preceding paragraph, how much is the total business taxes due for the month?
a. P300,000
b. P540,000
c. P1,440,000
d. P0

Question 4
Moon Telecom Inc. has the following collections for the month of April 2021:
Overseas call originating abroad P1,120,000

Overseas call originating in the Philippines 880,000

Local calls 2,240,000

How much is the overseas communications tax to be remitted by Moon for the month?
a. P220,000
b. P88,000
c. P200,000
d. P80,000
Based on the preceding number, how much is the output tax
a. P240,000
b. P454,286
c. P360,000
d. P268,800

Question 5

How much is franchise tax in 2020? C

a. 0
b. 90,000
c. 135,000
d. 225,000
How much is franchise tax in 2021? C
a. 0
b. 210,000
c. 315,000
d. 525,000

Question 6
Mabuhay Insurance Corporation furnished us its data shown below:
⦁ Insurance Premiums collectible is P3,750,000
⦁ The breakdown of the above premiums is as follows:
Life Insurance Premiums 75%
Non-life insurance premiums 25% .
⦁ During the month, 70% of collectible life insurance premiums and 50% of collectible non-life insurance premiums were collected.
The Premiums Tax payable is:
a. P39,375
b. P78,750
c. P94,437.50
d. P196,875
Using the same data in the preceding number, the total business taxes should be:
a. P39,375
b. P56,250
c. P95,625
d. P120,000

Question 7
Pedro wants to procure fire insurance for his Mansion in Forbes Park, Makati from Gallaxy Insurance Company, a non-resident foreign
corporation, through its agent in the Philippines, G.1. Joe. He paid premiums in 2018 amounting to P500,000. How much is the premiums tax
payable on the transaction? B
a. P10,000
b. P20,000
c. P25,000
d. P50,000
Using the same information above, but assuming Pedro directly obtained the insurance
policy from Gallaxy Insurance Company, how much is the premiums tax payable on the transaction? C
a. P10,000
b. P20,000
c. P25,000
d. P50,000

Question 8
Situational Problem : For the next 2 items, refer to the following information:

Sports Is Fun Corporation is operating a shooting range and an archery range. This year, Sports Is Fun was able to generate sales of P480,000
from its shooting range and P650.000 from its archery range. In addition, in a restaurant that Sports Is Fun is operating inside its facilities, it was
able to generate revenues of P1,200,000.

How much is the percentage tax liability of Sports Is Fun Corporation? B

a. 33,900
b. 69,900
c. 203,400
d. 419,400

Statement 1: Sports Is Fun Corporation is not required to be a VAT-registered taxpayer.

Statement 2: If Sports Is Fun Corporation optionally registered for as a VAT-registered taxpayer, the gross receipts from the shooting range and
archery range will still be subject to amusement tax.B
a. Only Statement 1 is true.
b. Only Statement 2 is true.
c. Both statements are true.
d. Both statements are not true.

Question 9
In 2019, Trillanes invested P5,500,000 in the shares of stock of Du30 Corporation. The corporation's shares are listed and are traded in the local
stock exchange. Trillanes subsequently sold the shares in 2020 for P5,000,000 through the local stock exchange, The percentage tax on the sale
is: C
a. P15,000
b. P25,000
c. P30,000
d. P50,000

Assuming the shares were not listed in the local stock exchange and that Trillanes sold the shares to Cayatano, the percentage tax on the sale
is: D
a. P15,000
b. P25,000
c. P30,000
d. PO

Question 10

How much is the common carrier's tax due?

a. 0
b. 37,650
c. 65,250
d. 71,760
How much are other percentage taxes due? (Assume that the temporary rate under CREATE Act is not applicable.)
a. 0
b. 45,750
c. 65,250
d. 71,490
How much is output VAT?
a. 0
b. 99,360
c. 261,000
d. 397,440

Question 11
Compute for the common carrier's tax due.D
a. 32,400
b. 240,600
c. 252,900
d. 285,300
Which of the following statements is true regarding Air Germany's gross receipts from sale of tickets to passengers heading to Japan
originating from the Philippines?D
a. The amount is exempt from VAT or percentage tax.
b. The amount is subject to a zero rate of VAT.
c. The amount is subject to 12% VAT.
d. The amount is subject to common carrier's tax.
Shell Pilipinas' sale of fuel to Air Germany is:B
a. Exempt from VAT or percentage tax.
b. Subject to zero rate of VAT.
c. Subject to 12% VAT.
d. Subject to 3% percentage tax.

Question 12

If the franchisee is generating and selling electricity, the correct amount of business tax is: C
a. P200,800
b. P456,000
c. P580,800
d. P238,800
If the franchisee is a gas and water utilities, the correct amount of business tax is: ["", "", "", "
a. P200,800
b. P456,000
c. P580,800
d. P238,800
If the franchisee is a radio television broadcasting company, the correct amount of business tax is: ["", "", "", "
a. P200,800
b. P456,000
c. P580,800
d. P238,800

Question 13

How much is the amusement tax for the quarter?

a. P180,000
b. P360,000
c. P540,000
d. P438,000
How much is output vat for the quarter?
a. P180,000
b. P360,000
c. P540,000
d. P438,000
How much is the total business taxes for the quarter?
a. P180,000
b. P360.000
c. P540.000
d. P400,000

Question 14
Situational Problem : For items 70 to 72, refer to the follow information:
Fighting for a boxing title, the most awaited boxing match between Jet Lee, known Chinese featherweight boxer, with a record of 24-0-0, with
18 knockouts, and Cardo DaCurryy, a famous Filipino boxer, with a record of 28-0-0, with 22 knockouts, was held on July 8, 2018. The promoter,
Bottom Rank Inc., leased the venue for a cost of P8,000,000, and was able to generate revenues amounting to P24,000,000 from ticket sales and
advertising generating profits of P16,000,000.

70. Compute for the amusement tax due assuming the boxing match is for the Philippine Bantamweight Belt
a. 0
b. 1,600,000
c. 2,400,000
d. 4,320,000
Compute for the amusement tax due assuming the boxing match is for the World Flyweight Belt, and Bottom Rank, Inc., is 50% owned by
Filipinos.
a. 0
b. 1,600,000
c. 2,400,000
d. 4,320,000
Compute for the amusement tax due assuming the boxing match is for the World Flyweight Belt, and Bottom Rank, Inc., is 60% owned by
Filipinos.
a. 0
b. 1,600,000
c. 2,400,000
d. 4,320,000

Question 15
Which statement is wrong?

None of the above

An isolated transaction not in the course of business will not result in a liability for a percentage tax
Percentage taxes are not allowed by law to be shifted to the customers or clients.
Percentage taxes are basically on sales of services.

Question 16
Which of the following is subject to Percentage Tax under Section 116 of the Tax Code?

An individual taxpayer whose gross sales for the year amounted to P100,000.
None of the above
School bus operator whose gross receipts for the year amounted to P2,500,000
Fruit dealer whose gross receipts for the year amounted to P2,800,000 only.

Question 17
Which of the following taxpayers is not subject to the 3% percentage tax?
I. Those availing of the 8% income tax rate
II. Taxpayers who are VAT-registered
Both I and II.

Question 18
This refers to persons, corporations, firms or associations engaged in the business of carrying of transporting passengers or goods or both, by
land, water, and air, for compensation, offering their services to the public and shall include transportation contractors.

Franchise grantees.
Dealers in securities
Lending investors
Common carriers

Question 19
Which of the following is subject to the 3% common carrier's tax?

Domestic carriers by land for the transport of passengers.

Common carriers by air and sea relative to their transport of passengers
Transportation contractors on their transport of goods or cargoes.
Owners of animal-drawn two-wheeled vehicle.

Question 20
Statement 1: The gross receipts of common carriers derived from their incoming and outgoing freight shall not be subject to the local taxes
imposed under RA 7160, otherwise known as the Local Government Code of 1991.
Statement 2: The 3% common carrier's tax is based on the actual quarterly gross receipts or minimum quarterly receipt whichever is lower.
Only statement 1 is correct
Question 21
A non-vat registered transportation contractor is engaged in the transport of passengers, goods and cargoes. What business taxes is he liable?

12% VAT on gross receipts from transport of goods and cargoes and 3% common carrier's tax on gross receipts from transport of passengers.
3% common carrier's tax;
Percentage tax under Section 116 on gross receipts from transport of goods and cargoes and 3% common carrier's tax on gross receipts from
transport of passengers.
12% value-added tax;

Question 22
Using the same information in the preceding number, except that he is a vat-registered. What business taxes is he liable to?

12% value-added tax;

12% VAT on gross receipts from transport of goods and cargoes and 3% common carrier's tax on gross receipt from transport of passengers.
3% common carrier's tax;
Percentage tax under Sec. 116 of the Tax Code on gross receipts from transport of goods and cargoes and 3% common carrier's tax on gross
receipts from transport of passengers.

Question 23
One of the following statements is incorrect: Operators of transport facilities are

Subject to the value-added tax on gross receipts from renting out its transportation facilities.
Subject to the value-added tax on gross receipts from transporting goods and cargoes.
Subject to percentage tax on gross receipts from transporting passengers.
Subject to the value-added tax on gross receipts from transporting passengers.

Question 24
Doncic Airlines, a domestic corporation plying domestic routes, had the following gross receipts for the month ended April 2020: carriage of
passenger, P4,500,000; carriage of cargo, P7,000,000. The correct amount of business tax for the month ended April 2017 is:
P1,380,000

Question 25
Randle is a jeepney operator. He is also engaged in the business of leasing residential units. His gross receipts from his jeepney operation
amounted to P5,000,000 for the year. The monthly rental of the residential units is P14,000 with a total annual gross receipts of P3,500,000 for
2021. Which of the following is correct?

Randle is required to register under the vat system

Randle is exempt from business and income tax
Randle may apply for optional vat registration
None of the above

Question 26
All of the following, except one, are not subject to common carrier's tax

owner of a parking lot/building

domestic airline companies
common carriers engaged in carriage of goods or cargo
rent-a-car companies

Question 27
Davis is a vat registered common carrier with passenger buses and cargo trucks. For the month of June 2021, it had the following data on
revenues and receipts, taxes not included:
⦁ For transporting passengers, gross revenues and receipts of P330,000
⦁ For transporting cargoes, gross revenues of P220,000, of which P200,000 was received
⦁ For renting out to the MMDA its towing trucks, gross receipts of P50,000, representing P10,000 from gross revenue of the quarter ending
March 31 and P40,000 for the month of June.

The percentage tax is:

P9,900

Question 28
The value added tax is:
P30,000

Question 29
Statement 1: Under RMC 70-2015, transport network vehicle services, such as but not limited to the likes of UBER, GRAB TAXI, their
Partners/suppliers and similar arrangements, which are holders of a valid and current Certificate of Public Convenience for the transport of
passengers by land, shall be subject to 3% common carriers tax under Sec. 117.
Statement 2: Transport network vehicle services, such as but not limited to the likes of UBER, GRAB TAXI, their Partners/suppliers and similar
arrangements, which are not holders of a valid and current Certificate of Public Convenience for the transport of passengers by land, shall also
be subject to 3% common carriers tax under Sec. 117.
Only statement 1 is correct

Question 30
The common carrier's tax is imposed on:

Transport of passengers by land

Transport of passengers by air within the Philippines
Transport of cargoes by sea within the Philippines
Transport of cargoes by land

Question 31
Which of the following is exempt from common carrier's tax?

Tricycles
Jeepneys
Animal-drawn two-wheeled vehicles
Pedicabs (Bicycles with side carriages for passengers)

Question 32
Transport of passengers by air within the Philippines is:

Subject to 0% value-added tax

Subject to 12% value-added tax
Exempt from both common carriers tax and value-added tax
Subject to 3% common carriers tax

Question 33
Transport of cargoes by air from Philippines to abroad by international carriers

Subject to 12% value-added tax

Subject to 0% value-added tax
Subject to 3% common carriers tax
Exempt from both common carriers tax and value-added tax

Question 34
Statement 1: Domestic air carriers may be subject to common carrier's tax on certain transactions.
Statement 2: Domestic air carriers may be subject to franchise tax on certain transactions.
Both statements are not true.

Question 35
Which of the following is subject to percentage tax under Section 119 of the Tax Code:

None of the above

Telecomumication companies
PAGCOR
Tollway operators

Question 36
Which of the following franchisees is not subject to franchise tax?

Television franchisees
Electric utility franchisees
Radio franchisees
Water utility franchisees

Question 37
Statement 1: A holder of a franchise from Jollibee Foods Corporation domestic
corporation, is subject to franchise tax based on its gross sales or receipts.
Statement 2: Jollibee Foods Corporation, a domestic corporation, is subject to franchise tax on franchise fees received from franchise holders.
Both statements are not true.

Question 38
Which of the following is not an exemption to the overseas communications tax?

International organizations
News services
Diplomatic services
Non-profit organizations

Question 39
Which of the following transactions is subject to the overseas communications tax?

Outbound calls
Inbound payments to postal services
Inbound calls
Outbound payments to postal services

Question 40
Overseas communications tax is imposed at the rate of:
Ten percent

Question 41
Pedro executed on January 1, 2016, a long term loan from PRTC Bank in the amount of P6,000,000 payable within ten (10) years, with an annual
interest of 2%. However, on January 31, 2020, the loan was pre-terminated. Assuming PRTC Bank declared correctly the interest from 2016 to
2019 and the applicable gross receipts taxes were paid, how much gross receipts tax should be paid for the year 2020?
P19,700
Question 42
China Bank extended loans to its debtors during the year, with real properties of the debtors being used as collateral to secure the loans. When
the debtors failed to to pay the unpaid principal and interest after several demand letters, the bank foreclosed the same and entered into
contracts of lease with tenants. The bank is subject to business tax as follows:
I. 12% vat
II. 7% gross receipts tax
II only

Question 43
Quasi-banking activities shall refer to the borrowing of funds from:
Twenty or more personal or corporate lenders at any one time
Twenty or more corporate lenders at any one time
More than twenty personal or corporate lenders at any one time
More than twenty corporate lenders at any one time

Question 44
Which of the following income is subject to 0% gross receipts tax?

Equity shares in net income of subsidiaries

Commissions from lending activities
Net trading gains on foreign currency
Net trading gains on debt instruments

Question 45

164,640

Question 46
Statement 1: The tax on insurance premiums applies to every person, company or corporation doing life insurance business of any sort in the
Philippines, except purely cooperative companies and associations.
Statement 2: A person engaged in non-life insurance business is subject to value-added tax.

Both statements are correct.

Question 47
Section 124 of the Tax Code, as amended, provides that every fire, marine or
miscellaneous insurance agent authorized under the Insurance Code to procure policies of insurance as he may have previously been legally
authorized to transact on risks located in the Philippines for companies not authorized to transact business in the Philippines shall pay a tax
equal to:
4%

Question 48
Statement 1: Life insurance premiums received by domestic insurance companies are
subject to 4% premium tax.
Statement 2: Property insurance premiums received by domestic insurance companies are subject to 2% premium tax.
Both statements are not true.

Question 49
A tax on the right or privilege to enter places of amusement
amusement tax

Question 50
One of the following is an incorrect amusement tax rate:

Boxing exhibitions - 12%

Cockpits, cabarets, night and day clubs - 18%
Jai-alai and racetracks - 30%
Professional basketball games - 15%

Question 51
Boxing exhibitions shall be exempt from amusement tax when the following conditions
are present:

One of the contenders is a citizen of the Philippines.

Promoted by citizens of the Philippines or by a, corporation or association at least 60% of the capital is owned by Filipino citizens,
All of the conditions above must be satisfied
Involves World or Oriental championships in any division.
Question 52
The Philippine Amusement and Gaming Corporation (PAGCOR) is:

Always subject to franchise tax

Correct answer
Subject to franchise tax only on its casino operations
Always subject to VAT
Exempt from percentage tax or VAT

Question 53
All of the following are subject to 18% amusement tax, except:
Jai-alai
Cockpits
Day clubs
Cabarets

Question 54

4,163,400

Question 55
Which of the following boxing exhibition may be exempt from amusement tax?

The said exhibition is promoted by a non-resident Filipino citizen

World or National Championship must be at stake
All contenders are residents of the Philippines
The proceeds of the exhibition will go to charity

Question 56
For purposes of amusement tax, which of the following should be included in the tax
base?
⦁ Receipts from sale of television rights
⦁ Sale of food items inside the amusement place
Both I and II.

Question 57
Which of the following is not subject to amusement tax?

Turtles KTV, a karaoke hub

Happy Hour, a night club
Cockapitan, a cockpit
Enchanted Kingdom, an amusement park

Question 58
The Percentage Tax on Winnings is imposed on the winnings of bettors in:

boxing
Jai-ala
Horse race
Cockfighting

Question 59
The following shall always be subject to 10% percentage tax, except?

Oriental Championship match in the Philippines between a Filipino and Mexican promoted by Bob Arum.
Winnings from horse races by a horse owner.
Winnings from horse races by a bettor
Overseas call made by Mr. X, resident of Manila, to his mother in Libya Overseas call made by Mr. X, resident of Manila, to his mother in Libya

Question 60
Statement 1: The 10% tax on winnings is based on actual amount paid to the winner.
Statement 2: The rate of tax on winnings in case of double, forecast/quinella and trifecta shall be four percent (4%).
Only the second statement is correct.

Question 61
Issuance of shares by a closely held issuing corporation shall be subject to:

Percentage on IPO - 4%, 2%, 1% based on gross selling price or gross value in money.
No business tax but subject to documentary stamp tax (DST)
Percentage tax – 6/10 of 1% based on gross selling price or gross value in money.
Capital gains tax of 15% on capital gain

Question 62
Prior to the effectivity of Bayanihan II Act, primary offering of shares by the issuing corporation (issuance during initial public offering) shall be
subject to:

Percentage tax – 6/10 of 1% based on gross selling price or gross value in money.
Percentage on IPO - 4%, 2%, 1% based on gross selling price or gross value in money.
No business tax but subject to documentary stamp tax (DST)
Capital gains tax of 15% on capital gain.

Question 63
Follow on follow through issuance of shares by the issuing corporation (issuance after IPO) shall be subject to:

Capital gains tax of 15% on capital gains.

Percentage tax - 6/10 of 1% based on gross selling price or gross value in money.
Percentage on IPO - 4%, 2%, 1% based on gross selling price or gross value in money.
No business tax but subject to documentary stamp tax (DST)

Question 64
1st Statement: Sale by a stock dealer of shares of stocks through the local stock exchange is subject to the stock transactions tax.
2nd Statement: Sale by a stock dealer of shares of stocks directly to a buyer is subject to the capital gains tax
a. Both statements are correct.
b. Both statements are incorrect.
c. Only the first statement is correct.
d. Only the second state statement is correct.
Both statements are incorrect.

Question 65
Statement 1: Upon the effectivity of the TRAIN Law, payment of stock transaction tax of 6/10 of 1% is within five (5) banking days from the date
withheld by the broker,
Statement 2: Prior to Sept 15, 2020, payment of stock transaction tax of 4%, 2% and 1% on primary offering should be within thirty (30) days
from the date of listing in the local stock exchange.
Both statemeOnly the second state statement is correct. nts are correct.

Question 66
Which of the following sale is subject to stock transaction tax?

Sale by a dealer of securities of shares of a domestic corporation directly to the buyer

Sale by a non-dealer of securities of shares of a domestic corporation through the local stock exchange.
Sale by a non-dealer of securities of shares of a domestic corporation directly to the buyer.
Sale by a dealer of securities of shares of a domestic corporation through the local stock exchange.

Question 67
If a transaction is subject to stock transaction tax, then:

Any gain is not subject to income tax and the gross receipts is not subject to VAT.
Any gain may be subject to income tax but the gross receipts is not subject to VAT.
Any gain may be subject to income tax and the gross receipts is subject to VAT.
Any gain is not subject to income tax but the gross receipts is subject to VAT.

Question 68
The stockbroker who effected the sale subject to stock transaction tax shall remit the tax to the Bureau of Internal Revenue :

Within ten (10) days from the close of the month of collection.
Within five (5) days from the date of collection.
Within ten (10) days from the date of collection.
Within fifteen (15) days from the close of the month of collection.

Question 69
In general, the percentage tax return is required to be filed:

Within twenty (20) days from the close of the taxable quarter
Within ten (10) days from the close of the taxable quarter
Within fifteen (15) days from the close of the taxable quarter
Within twenty-five (25) days from the close of the taxable quarter

Question 70
Which of the following taxes have been repealed by the Bayanihan to Recover as One Act?

Tax on Initial Public Offerings

You Answered
Amusement Tax
Stock Transaction Tax
Overseas Communications Tax

Question 71
Ginny sold shares of stock at a price of P800,000 to Remus. The shares were initially acquired for P500,000 and was used by Ginny primarily to
earn profit from dividends. Ginny is an electronics engineer and is not a dealer in securities. Which of the following statements is true if the sale
was made through the local stock exchange?

Ginny is liable to pay stock transaction tax of P4,800.

Ginny is liable to pay capital gains tax of P45,000.
Ginny is liable to pay value-added tax amounting to P36,000.
Ginny should include P300,000 in its gross income subject to regular income tax.

Quiz 3 - Estate Taxation

Question 1
It refers to a mode of transferring and acquiring properties left by the decedent.

Execution of a will
Donation
Succession
Estate transfer

Question 2
The property, rights and obligations of a person which are not extinguished by his death and those which have accrued thereto since the
opening of succession.

capital
Estate
Devise
Inheritance

Question 3
The estate tax accrues from the moment of:

The fixing of notice of death

The death of the decedent
Expiration of a months after death
The filing of estate tax return

Question 4
The gift tax paid on a donation mortis causa : if any:

Has no effect since the gift will still be subject to another gift tax
Exempts the property from estate tax
Is invalid and the tax will not be credited at all
Shall form as a tax credit to be deducted from the estate tax due

Question 5
Which shall not form part of the gross estate of a decedent:

Transfer under special power of appointment

Revocable transfer
Intangible personal property of a non-resident client without reciprocity law
Life insurance proceeds where the executor is the beneficiary and it is irrevocable

Question 6
All of the following are considered intangible personal properties situated in the Philippines, except:
Shares, obligations or bonds issued by any foreign corporation doing business in the Philippines;
Franchise which must be exercised in the Philippines;
Shares, obligations or bonds issued by any corporation or sociedad anonima organized or constituted in the Philippines in accordance with it
laws;
Shares or rights in any partnership, business or industry established in the Philippines

Question 7
A person who inherits a personal property thru a will:

Successor
Devisee
Legatee
Heir

Question 8
A person who inherits real property thru a will;
Legatee
Devisee
Successor
Heir

Question 9
Succession wherein the decedent did not leave any will:

Mixed succession
Legal succession
Voluntary succession
Testamentary succession

Question 10
Which statement is false about succession:

In succession, the successor can repudiate the inheritance.

In succession, fruits and credits maturing after the death of the decedent pass to the heirs even if they were not subjected to estate tax.
The successor inherits all the transmissible property of a decedent including his liabilities
The successor can be made liable for the obligations of the decedent beyond the value of the asset he received.

Question 11
One of the following statements is false

Estate tax is an excise tax.

Estate tax is a transfer tax on donation mortis causa.
The object of estate tax is to tax the property transferred from the dead to the living.
Estate tax is based on redistribution of wealth.

Question 12
Which statement is wrong

Revocable transfers are includible whether or not the right to revoke is exercised.
Transfers passing under special power of appointment is excluded from the gross state
Transfer in contemplation of death for adequate and full consideration is still includible in the gross estate.
Claims against insolvent person should be included in the gross estate even if uncollectible

Question 13
Which statement is incorrect about claims against insolvent persons?

The insolvency of the debtor must be established

They must be included in the gross estate even if uncollectible
They must be duly notarized
The deduction is only the uncollectible portion

Question 14
One of the following is incorrect:

Taxes to be deductible must accrue before the decedent's death.

Standard Deduction is 1,000,000
Transfer for public purposes to be deducted must be mortis causa in character
Losses must occur also before the decedent's death to be deductible.

Question 15
Which statement is false about Vanishing Deduction:

The property must be located in the Philippines.

The property must be previously subjected to a transfer tax or income tax.
It pertains to a property presently found in the gross estate.
The property was received by the decedent within 5 years prior to his death.

Question 16
A donation inter vivos but due to thought of death is:

Subject to inheritance tax.

Subject to estate tax if for inadequate consideration.
Subject to estate tax a bona fide transfer.
Subject to donor's tax.

Question 17
In filing the estate tax return, a CPA Certified is required when:
Gross estate exceeds P5,000,000
Gross estate reaches P5,000,000
Gross estate exceeds P2,000,000
Gross estate reaches P2,000,000

Question 18
A died leaving a house and a lot to B on March 31, 2018 which was questioned by C. It is under litigation but the parties have started an extra-
judicial settlement. The last day for filing the estate tax return is: March 31, 2019
Based on the preceding number, the last day for the payment of estate tax if extended, shall be: March 31,2021

Question 19
The taxpayer in estate tax is:

the heirs of successor

the deceased person’s estate
The decedent
the administrator and executor

Question 20
The payment of estate tax is a personal liability of
The executor in Voluntary succession
The administrator in testamentary succession
The estate itself
The heirs or successors

Question 21
1st Statement – The court may authorize the distribution of estate, to an heir if in its sound discretion it believes that the heir badly needs his
share.
2nd Statement - The administrator or any of the heirs, may withdraw from the Decedent's bank as long as it pays a final tax of 6% on said
amount withdrawn without approval from Commissioner of Internal Revenue that the estate was already paid.
False, True

Question 22
1st Statement - A died giving B power to appoint a person who will inherit A's House and lot. B however can only choose among C, D, E and F. B
decided to transfer the property to C, in B's. The transfer from B to C is subject to Estate tax.

2nd Statement - During A’s lifetime, he decided to give to B as - gift his (A) car subject to the condition that if B does not become a CPA within
three years. A shall revoke the transfer. In the second year however, A died. The car can no longer form part of A's gross estate.
False, True

Question 23
A died leaving a farm land. In his will, he transferred the ownership thereof to B but subject to the condition that C will have the right to use the
land for a period of ten years (Usufruct). In the seventh year, however, C died and C's will he surrendered his right over the land to B.

The transfer is subject to estate tax.

The transfer is both an inclusion from the gross estate
The above is a tax-exempt transfer.
The transfer is subject to donor's tax.

Question 24
The notice of death must to be filed when:

The gross estate exceeds P 5,000,000

Not required anymore.
The gross estate reaches P200,000
The gross estate exceeds P2,000,000

Question 25
One of the following is not an exemption or exclusion from the gross estate:

Properties outside the Philippines of a non-resident Chinese decedent

Shares of stock of San Miguel Corporation of a Non-resident Mexican
The merger of usufruct in the owner of the naked title
Capital or exclusive property of the surviving spouse

Question 26
The gross estate of a non-resident alien is P2,000,000, 75% of which is form abroad: The actual funeral expenses totaled to P80,000, 14 of which
was paid by his employer. The deductible funeral expense is: Zero
Based on the preceding question, but the decedent is a non resident citizen, the deductible funeral expenses is: Zero

Question 27
1st Statement - A note payable contracted 11 yrs. ago is a deduction from the Gross Estate if notarized.

2nd Statement – A note receivable against an insolvent person contracted by the decedent before his death must be included in the gross
estate in full even if only 50% is collectible.
False, False

Question 28
1ST Statement – Unpaid mortgage indebtedness is a deductible from the gross estate provided the said property subject to the indebtedness is
included in the gross estate net of the mortgage indebtedness.

2nd Statement - A donation inter vivos by the decedent to the Philippine government few months before his death is a deduction from the
gross estate.
False, True

Question 29
M Jose, Filipino, married died leaving the following estate:
Car acquired before marriage by Mr. Jose P 300,000
Car acquired before marriage by Mrs. Jose P 450,000
House and lot acquired during marriage P1,500,000
Jewelries of Mrs. Jose, acquired before marriage 100,000
Personal properties inherited by Mr. Jose during marriage 250,000
Benefits from SSS 50,000
Retirement benefits from a private firm 150,000
Proceeds of group insurance taken by his employer 75,000
Land inherited by the wife during marriage 1,000,000
Income earned from the land inherited by wife
above (25% of which was Earned after death) 200,000

2,200,000 The gross estate under Conjugal Partnership of Gains is

2,600,000 the gross estate under Absolute
Community of property is
Answer 1: 2,200,000
Answer 2: 2,600,000

Question 30
Mr. A, non-resident Japanese, died leaving the following:
Common properties
Exclusive properties, Philippines P560,000
Conjugal properties, Philippines 420,000
Conjugal properties, Abroad 1,820,000
Deduction claimed:
Funeral expenses 100,000
Judicial expenses 100,000
Unpaid expenses 150,000
Losses: occurring 3 months After death due to fire 50,000
Donation mortis causa to Makati City Hall 180,000
Family Home (included above) 2,000,000
Standard Deduction 1,000,000

The taxable net estate is: P55,000

Question 31
A privilege tax imposed on onerous transfers inter vivos:

Gift Tax
Donor's tax
Estate tax
Income tax

Question 32
An excise tax on gratuitous transfers mortis causa
estate tax
income tax
donor's tax
Gift tax

Question 33
An excise tax on gratuitous transfer inter vivos:

VAT
estate tax
gift tax
income tax

Question 34
For estate tax purposes, what are allowable deductions for non-resident alien?
I. Expenses, losses, indebtedness and taxes.
II. Transfer for Public Use
III. Property previously taxed
IV. Family Home
V. Standard
VI. Medical Expenses
VII. Amount from R.A. 4917 otherwise known as death benefits
VIII. Share of the surviving spouse
I, II, III, V and VIII

Question 35
For estate tax purposes, what are allowable deductions for resident citizen?
I. Funeral Expenses
II. Judicial Expenses
III. Claims against the estate, claims against insolvent, mortgages, taxes, losses
IV. Transfer for Public Use
V. Property previously taxed
VI. Family Home
VII. Standard
VIII. Medical Expenses
IX. Amount from R.A. 4917 otherwise known as death benefits
X. Share of the surviving spouse
III,IV,V,VI,IX and X

Question 36
Which of the following is not an exempt acquisition and transmission?

The transmission or delivery of the inheritance or legacy by the fiduciary heir or legatee to the fideicommissary
The transmission from the first heir, legatee or donee in favor of another beneficiary, in accordance with the desire of the predessor
The merger of usufruct in the owner of naked title
All bequests, devices, legacies or transfer to social welfare, cultural and charitable institutions, no part of the net income of which inures to the
benefit of any individual

Question 37
For purposes of filing estate tax return, the deadline for filing the death of decedent is:

30 days
1 year
60 days
6 months

Question 38
1st Statement - Extension of payment of estate tax may be granted by the Commissioner for a period not exceeding five (5) years in cases of
judicial settlement.

2nd Statement - Extension of payment of estate tax may be granted by the Commissioner for a period not exceeding two (2) years in cases of
extra-judicial settlement.
True, True

Question 39
A decedent died single, leaving a family home which consists of land that he inherited 3 – 1/2 years ago (with a value at time of P600,000) with
a fair value of P800,000 at time of the death, and a house thereon which he built at a cost of P650.000 and a fair market value at the time of his
death of P450,000. Other properties in his gross estate have a fair market value of P550,000 Unpaid obligations at the time of his death
amounted to P300,000 The vanishing deduction is:

P40,000
P200,000
P225,000
P500,000

Question 40
A- Expenses on the death anniversary of the deceased are not deductible expenses from the gross estate
B - Attorney's fees incurred by an heir from appearance at the trial to oppose the probate of the will of the decedent is deductible expense from
the gross estate
True, True

Question 41
Which of the following is correct
DEDUCTION MAXIMUM
a. Funeral Expenses P 200,000
b. Family Home 10,000,000
c. Medical Expenses 500,000
d. Standard Deduction 1,000,000

Quiz 4 - Donor's Tax

Question 1
Next three (3) questions are based on the following data:
Juliet, a Filipina made the following donations.
a. To Nick, a land worth P450,000 in Manila.
b. To Rosalee, jewelry worth P100,000 in Japan.
c. To Adalind, PLDT shares amounting to R150,000.
d. To Renard, a building in Italy P1,600,000 mortgaged for p 50,000 assumed by the donee.
e. To Drew, land in Davao worth P300,000.
f. P300,000 cash, PNB New York to Hank
g. P200,000 receivable,50% condoned by Juliet

She has also transferred the following properties

 Selling price FMV
Car, Makati P200,000 P300,000
Car, Malaysia 300,000 200,000
Rest house, Tagaytay 1,000,000 2,000,000
Rest house, Malaysia 1,000,000 2,500,000

How much is the gross gift?

a. P5,200,000 c. P4,100,000
b. P4,200,000 d. P3,200,000

If she is a non-resident Alien, her gross gift is:

a. P3,200,000 c. P1,100,000
b. P1,200,000 d. P850,000

If she is a non-resident alien, and there is reciprocity law, her gross gift is:
a. P850,000 c. P1,050,000
b. P950,000 d. P700,000

Question 2
What is the Donors tax rate for strangers?

25%
30%
8%
6%

Question 3
An excise tax on gratuitous transfer inter vivos:

VAT
Estate tax
Income Tax
Gift Tax

Question 4
First statement: The donor's tax shall apply, whether the gift is direct or indirect, and whether the property is real or personal, tangible or
intangible, even if the transfer is merely in trust.
Second statement: Any contribution in cash or in kind to any candidate, political party or coalition of parties for campaign purposes shall be
subject to donor's tax.

Both statements are incorrect.

Only the second statement is correct.
Only the first statement is correct.
Both statements are correct.

Question 5
Donor's tax as distinguished from estate tax.
First distinction: The rates for donor's tax are lower than those for estate tax, in all cases.
Second distinction: In donor's tax, the exemption is P 250,000 while in estate tax it is none.

Both distinctions are wrong.

First distinction is correct, the second is wrong.
Both distinctions are correct.
First distinction is wrong, the second is correct.

Question 6
When the donee or beneficiary is a stranger, the tax payable by the donor shall be:

6% of the net gifts in excess of 250,000.

based on the graduated rates with the first P 100,000 net gift exempt.
30 % of the net gifts
Based on the graduated rates with the first P100,000 net gift exempt or 30% of the net gifts whichever is higher.

Question 7
Three of the following are exempt or excluded from the donor's tax. Which is the exception?

P 1,000,000 donation to the International Rice Institute.

P300,000 cash given by a nonresident alien donor to his legitimate son who is getting married in the Philippines to a Filipina
Donation of a condominium in Hongkong to a Filipina by a British national not residing in the Phils.
P 250,000 cash given by a resident alien donor to his legitimate son who is getting married in the Phils.

Question 8
First statement: Gifts in favor of an educational an/or religious organization are exempt from donor's tax.
Second statement: Transfers to educational and/or religious organization are exempt from income tax.

Only first statement is correct.

Both statements are correct.
Both statements are incorrect.
Only second statement is correct.

Question 9
All of the following except one are exempt from gift tax under special laws;

Donation to Development Academy of the Philippines.

Donation to Integrated Bar of the Philippines.
Donation to Philippine Institute of Certified Public Accountants.
Donation International Rice Research Institute

Question 10
A sold his car to B. A car cost P3,000,000 and has a fair market value of P 800,000 at the time of sale. The car was sold for P200,000. For donor's
tax purposes, which of the following statements is correct?

There is a taxable gift of P 350,000.

There is a taxable gift of P 600,000.

The transfer involves a personal property, in the ordinary course of business, hence, not subject to gift tax.
The transfer is for insufficient consideration, hence, not subject to gift tax but income tax;

Question 11
One of the following statements is false

Donations between persons guilty of adultery or concubinage are void

Contracts of donation between husband & wife are void in all cases.
Donations to conceived or unborn children are valid.
The donation in writing of a real property is void.

Question 12
1st statement: A donation can be both a part of the gross gift of the donor and a taxable income to the donee.
2nd statement: A donation may be exempt from donor's tax but not necessarily a deduction from the donor's gross income.

Both are incorrect.

Only the 1st statement is correct.
Only the second statement is correct.
Both statements are correct.

Question 13
1st statement: As a general rule all persons who may contract and dispose of their property may donate.
2nd statement: Minors can be a donor or a donee.

If only the second statement is correct.

If both statements are correct.
If both statement are incorrect.
If only the first statement is correct.

Question 14
1st statement: The pay as you file system is followed in donor's taxation.
2nd statement: The donor's tax return is filed within 6 months from the date of donation.

If only the first statement is correct.

If both statement are incorrect.
If only the second statement is correct.
If both statements are correct.

Question 15
1st statement: Renunciation of one's spare in the legitimate is a taxable gift.
2nd statement: Gift splitting is a form of tax evasion.

If both statements are correct.

If only the second statement is correct.
If only the first statement is correct.
If both statement are incorrect.

Question 16
1st statement: Donation of a personal property worth P5,000 must be in writing.
2nd statement: Donation of a real property worth P 3,000 need not be in writing.

If only the second statement is correct.

If both statements are correct.
If both statement are incorrect.
If only the first statement is correct.

Question 17
Which of the following is not a taxable gift or not subject to donor's tax?
Dowries or gifts made on account of marriage and before its celebration or within one year thereafter by parents to each of their legitimate,
recognized natural or adopted children
Gifts made to or for the use of any entity created by any National Government agencies which is not conducted for profit, or to any political
subdivision of the said Government.
Gifts in favor of an educational and/or charitable, religious, cultural or social welfare corporation, institution, foundation, trust or philanthropic
organization or research institution or organization. Provided, however, that more than thirty percent (30%) of the said gifts shall be used by
such donee for administrative purpose.
Gifts made to or for the use of the Phil. Institute of CPA.

Question 18
Which of the following statements regarding donation of an immovable property is correct?

If the acceptance is made in a separate instrument, the donor shall be notified thereof in an authentic form, and this step shall be noted in both
instruments.
The acceptance may be made in the same Deed of Donation or in a separate public instrument, but it shall not take effect unless it is done
during the lifetime of the donor
The donation must be made in a public document specifying therein the properly donated.
All of the above

Question 19
For the donation to be considered valid, acceptance of the donation must be made:

During the lifetime of the donor only.

During the lifetime of the donor and the donee.
None of the choices.
During the lifetime of the donee only.

Question 20
When is the donation perfected?

The moment the thing donated is delivered, either actually or constructively, to the donee
The moment the donor knows of the acceptance by the donee
Upon payment of the donor's tax
Upon execution of the deed of donation

Question 21
Which of the following statements is correct?

Acceptance must be made during the lifetime of the donor and of the donee.
Donations made to conceived and tanbom children may be accepted by those persons who would legally represent them if they were already
born.
Donation is perfected not from the time of acceptance but from the time of knowledge of the donor that the donee has accepted the
donation.
All of the above

Question 22
Which is not true?
Acceptance may be made after the lifetime of the donor.
The donation is perfected only from the moment the donor knows of the acceptance by the donee.
itiated consent renders the donation voidable.
The donee must accept the donation personally or through an authorized person; otherwise the donation shall be void.

Question 23
Which of the following transactions is deemed a taxable gift?

Sale of residential house and lot for less than adequate and full consideration in money or money's worth
Condonation or remission of a debt

Question 24
Who is not subject to the donor's tax?

An individual making a donation.

A corporation making a donation.
An employer who pays premiums on the life insurance of its employee.
A partnership making a donation.

Question 25
Which of the following is false?

Encumbrance on the property donated, if assumed by the donor is deductible for donor's tax purposes
For purposes of donor's tax, second cousins are strangers to each other
Donor's tax applies also to juridical persons
As a rule, donation between husband and wife during the marriage is void

Question 26
Which of the following is subject to donor's tax?

Those made between persons who were guilty of adultery or concubinage at the time of the donation.
Those made between husband and wife during their marriage.
hose made to a public officer by reason of his office.
Those made to conceived and unborn children.

Question 27
Statement 1: In all cases, void donations are not subject to donor's tax.
Statement 2: Every donation between the spouses during the marriage shall be void.
Only 1 is correct

Question 28
Which of the following statements is correct?

Donation is perfected not from the time of acceptance but from the time of knowledge of the donor that the donee has accepted the donation.
Acceptance must be made during the lifetime of the donor and of the donee.
All of the above
Donations made to conceived and unborn children may be accepted by those persons who would legally represent them if they were already
born.

Question 29
A non-resident citizen donor is taxed on his donation of properties:
Situated in the Philippines only.
Situated in the Philippines only subject to the rule of reciprocity.
Wherever situated.
Situated outside the Philippines only.

Question 30
Statement 1: Resident alien would be subject to donor's tax only on their donations of property located in the Philippines
Statement 2: A donation by a foreign corporation of its own shares of stock to resident employees is not subject to gift tax but may be subjected
to income tax.
Only the second statement is correct.

Question 31
1 / 1 pts
There is reciprocity, when the donor and the donated property is:
Donor Property
a. Non-resident alien Intangible Personal Property
b . Non-resident citizens Immovable
c. Non-resident alien Tangible Personal Property
d. Resident alien Any kind of property

Question 32
Which of the following is taxable only with respect to properties donated within the Philippines?

Non-resident citizen
Resident citizen
Non-resident alien
Resident alien

Question 33
If a donor is a non-resident alien and the rule of reciprocity applies, which of the following properties will not form part of his gross gift?

Tangible personal properties within the Philippines

Real properties in the Philippines
Intangible personal properties within the Philippines
All of the choices

Question 34
If an individual performs services for a creditor who in consideration thereof cancels the debt, the cancellation of indebtedness may amount to
a

Capital contribution
Payment of income
Donation inter vivos
Gift

Question 35
Which of the following renunciations shall be subject to donor's tax
Renunciation by the surviving spouse of his/her share in the conjugal partnership or absolute community after the dissolution of the marriage in
favor of the heirs of the deceased spouse or any other person(s).
General renunciation by an heir, including the surviving spouse, of his or her share in the hereditary estate left by the decedent.
General renunciation by an heir, including the surviving spouse, of his or her share in the hereditary estate left by the decedent categorically in
favor of identified heir(s) to the exclusion or disadvantage of other co-heir(s).
I and III only

Question 36
Which of the following events is not subject to donor's tax?

A resident alien made a gift of P200,000 to his daughter on account marriage

A Filipino citizen donated a parcel of land located in the United States to B, non resident alien.
A and B are the only heirs of C. A renounces his share of inheritance in favor of B.
A non-resident citizen gives his girlfriend a diamond ring worth P100,000 as a birthday gift.

Question 37
A gift that is incomplete because of reserved powers, becomes complete when:
The donor renounces the power
The right of the donor to exercise the reserved power ceases because of the happening of some event or contingency or the fulfillment of
some condition, other than because of the donor's death
l and II are correct

Question 38
If the gift is made in properties, it shall be appraised at its:

Fair market value as of the time of donation

Value in the hands of the donor.
Fair market value as of the time the donor's tax return is filed.
Historical cost at the time the donated property was acquired.

Question 39
Every donation or grant of gratuitous advantage, direct and indirect, between the spouses during the marriage, shall be void, except:

Donation propter nuptias which are given before the marriage.

All the choices are correct exceptions.
Moderate gifts which the spouses may give each other on the occasion of any family rejoicing.
Donation mortis causa

Question 40
Statement 1: Where a property that has been subjected to the final capital gains tax is transferred for less than an adequate and full
consideration in money or money's worth, the amount by which the fair market value of the property at the time of transfer exceeded the
actual consideration shall be deemed gift and shall be included in the computation of gifts made during the calendar year.
Statement 2: A donation inter-vivos by the husband and the wife jointly during the marriage is a donation of each spouse to the extent of one-
half that will require separate computations for two donor's taxes, under whichever property relationship exists between the spouses.
Statement 1 is false but statement 2 is true

Question 41
Pedro, an individual, sold to his friend Ana, his residential lot with a market value of P1,000,000 for P600,000. Pedro's cost in the lot is P100,000.
Ana is financially capable of buying the lot. What tax should be imposed and collected from Pedro as a result of the transaction?
Capital gains tax
Real property Tax
Donor's Tax
Capital gains tax and Donor's Tax

Question 42
Pedro, an individual, donated to his friend Ana, his residential lot with a market value of P1,000,000. Pedro's cost in the lot is P100,000. Ana is
financially capable of buying the lot. What tax should be imposed and collected from Pedro as a result of the transaction?

Real property Tax

Capital gains tax and Donor's Tax
Capital gains tax
Donor's Tax

Question 43
Mr. Putiis a Russian national residing in Ukraine. He donated some properties located in the Philippines and curious as to what can be deduct in
arriving at his net gifts subject to donor's tax. Which of the following cannot be claimed as deduction?
Neither "a" nor "b"
Gifts in favor of an educational institution
Gifts made to or for the use of the National Government

Question 44
Which of the following is not a deduction from the gross gifts?

Unpaid mortgage on the donated property assumed by the donee

Diminution on the donated property specifically provided by the donor
Unpaid real estate tax on the property donated assumed by the donee
Unpaid donor's tax on the donated property assumed by the donee

Question 45
All of the following except one are exempt from gift tax under special laws

Donation to Philippine Institute of Certified Public Accountants

Donation to Integrated Bar of the Philippines
Donation to International Rice Research Institute
Donation to Development Academy of the Philippines

Question 46
All of the following, except one, are exempt from donor's tax

Donation to the City of Davao for public purpose

Donation to the Philippine National Red Cross
Donation to the Development Academy of the Philippines
Donation directly given to the victims of the typhoon Yolanda
Question 47
Statement 1: A donation can be both a part of the gross gift of the donor and a taxable income to the donee.
Statement 2: A donation may be exempt from donor's tax but not necessarily a deduction from the donor's gross income.
Only statement 2 is true

Question 48
Manolo, a resident of Dagupan City donated to Arturo a property in Laoag City. The donor's tax is P40,000. The deed of donation was signed in
the residence of Arturo in Baguio City. The donor's tax return must be filed in

Quezon City
Dagupan City
Baguio City
Laoag City

Question 49
When the donor has no legal residence in the Philippines, the donor's tax return shall be filed with:

Office of the Commissioner.

Revenue Collection Officer where the donee is domiciled.
Authorized Agent Bank
Revenue District Officer where the donor is domiciled.

Question 50
Statement 1:- Husband and wife are considered as separate and distinct taxpayers for purposes of the donor's tax.
Statement 2: If what was donated is a conjugal or community property and only the husband signed the deed of donation, there is only one
donor for donor's tax purposes, without prejudice to the right of the wife to question the validity of the donation without her consent pursuant
to the pertinent provisions of the Civil Code of the Philippines and the Family Code of the Philippines.
Statement 1 is true but statement 2 is false

Question 51
Statement 1: When a donor's tax return was filed and it was found out by the BIR to have errors which gave rise to a deficiency donor's tax, the
donor might be required to pay the deficiency although he did not possess or own the property anymore.
Statement 2. The Government is not bound by any agreement between the donor and the donee that the latter shall pay the donor's tax
instead of the former.
Statement 1 is true but statement 2 is false

Quiz 5 - Individual Taxpayers

Question 1
Determine the correct classification of the following:
I. Manny, a Filipino businessman, went on a business trip abroad and stayed there most of the time during the year.
II. Kyla, a Filipino professional singer, held a series of concerts in various countries around the world during the current taxable year. She stayed
abroad most of the time during the year.
III. Efren, a Filipino “cue” artist went to Canada during the taxable year to train and participate in the world cup of pool. He stayed there most of
the time during the year.

A B C D
I NRC RC RC RC
II NRC NRC RC RC
III NRC NRC NRC RC

Question 2
Statement 1: The intention with regard to the length and nature of stay of an alien determines whether he is a resident or nonresident.
Statement 2: A foreigner who has acquired residency in the Philippines shall only become a nonresident when he actually departs with the
intention of abandoning his residency in the Philippines.
Both statements are correct

Question 3
Which of the following is correct?
I. A citizen of the Philippines residing therein is taxable on all income derived from sources within and without the Philippines.
II. A non-resident citizen is taxable on income derived from sources within the Philippines only.
III. An alien individual, whether a resident or not of the Philippines, is taxable on income derived from sources within the Philippines only.
IV. A seaman who is a citizen of the Philippines and who receives compensation for services rendered abroad as a member of the complement
of a vessel engage in international trade shall be treated as an overseas contract worker.
I, II, III and IV

Question 4
Mike received the following income during 2021 taxable year:
Gross income, Philippines P3,850,000
Gross income, Canada 1,650,000
Business expenses, Philippines 2,000,000
Business expenses, Canada 725,000
Interest on bank deposit, Metrobank Taguig 50,000
Capital gain on sale of shares of closely held domestic corporation 180,000
How much is the taxable net income of Mike assuming he is:
RC NRC RA NRA-ETB
a. P2,775,000 P1,850,000 P1,850,000 P1,850,000
b. P2,775,000 925,000 925,000 1,650,000
c. P2,775,000 2,775,000 1,650,000 1,650,000
d. P2,775,000 2,775,000 925,000 1,650,000

How much is the income tax due of Mike assuming he is:

RC NRA ETB NRA NETB
a. P167,500 P167,500 P167,500
b. 412,500 412,500 412,500
c. 738,000 445,000 962,500
d. 738,000 167,500 412,500

Question 5
Individual taxpayers are subject to the following income tax:
I. Basic tax based on graduated tax table
II. Final withholding tax on passive income derived from sources within the Philippines
III. Capital gains tax
IV. Stock transaction tax of 6/10 of 1% of gross selling price
I ,II, and III only

Question 6
Statement 1: Tax on certain passive income is a capital gains tax
Statement 2: Other income, for income tax purposes, is excluded in the determination of an individual taxpayer's returnable income.
A B C D
Statement 1 True False True False
Statement 2 True False False True

Question 7
Which of the following statements is incorrect?

An income which is subject to final tax is excluded from the computation of income subject to Section 24(A) of the tax code.
Lotto winnings in foreign countries are exempt from income tax in the Philippines
To be subject to final tax, passive income must be from Philippine sources

Question 8
Statement 1: Any income of nonresident individual taxpayers from transactions with depositary banks under the expanded foreign currency
deposit system shall be exempt from income tax.
Statement 2: Any income of nonresident individual taxpayers from transactions with offshore banking units shall be exempt from income tax.
Both statements are correct

Question 9
Which of the following interest income by a resident taxpayer is subject to 15%?

Interest income from peso bank deposits

Interest income trust funds were
Interest income on dollar deposits
Interest income from deposit substitutes

Question 10
A non-resident alien not engaged in trade or business derived P50,000 interest income from his long-term bank deposit here in thePhilippines.
How much is the income tax due of the said alien?

P12,500
P10,000
P5,000
Nil

Question 11
Which of the following statements is true?

Prizes exceeding P10,000 derived by non-resident alien not engaged in trade or business here in the Philippines is subject to a final tax of 20%
Interest income from a foreign currency depository unit in the Philippines of a non-resident alien is not subject to final tax
Share in earnings received by non-resident alien from a domestic partnership is subject to basic tax.
All of the above

Question 12
If an account in a depository bank under the foreign currency deposit system is jointly in the name of a nonresident citizen such as an overseas
contract worker, or a Filipino seaman, and his spouse or dependent who is a resident of the Philippines, the interest on such deposit shall be:

50% exempt and 50% subject to final withholding tax of 15%.

Subject to final withholding tax of 15% in its entirety.
Exempted in its entirety
Subject to regular income tax rates for individuals.
Question 13
A taxpayer received during the taxable year the following passive income derived from within the Philippines:

Interest on bank deposit under FCDU (net) P231,250

Royalty on a software application (gross) 95,000
Dividend income RFC (gross) 150,000

If taxpayer is a non-resident alien engaged in business, the final tax on the above passive income would amount to P19,000

Question 14
An instrument with a maturity period of ten (10) years was held by Juan (resident citizen) for two (2) years and was transferred to Smith
(resident alien), who, in turn, held it for eight (8) years. The final withholding tax should be as follows:

A B C D
Juan – 20% final tax True False True False
Smith - exempt True False False True

Question 15
An instrument with a maturity period of ten (10) years was held by Juan (nonresident citizen) for three (3) years and transferred it to Smith, a
resident alien. Smith held it for two (2) years before subsequently transferring it to Pedro (resident citizen) who held it until the day of maturity
or for a period of five (5) years. The final withholding tax should be as follows:
A B C D
Juan – 12% final tax True True True True
Smith- 20% final tax True True False False
Pedro - exempt True False False True

Question 16
Mr. X, a resident citizen, appoints Bank A-Trust Department to manage his money created through a trust agreement. Bank A-Trust Department
then invests said money in a long term investment (10-year corporate bond) of XYZ Corporation under the account name “Bank A - Trust
Department”. Mr.X did not withdraw his money from such trust agreement for at least five (5) years. The interest of Mr. X from the
corresponding trust agreement is:

Exempt from income tax

Subject to 20% final tax
Subject to basic income tax
Subject to 15% preferential tax rate

Question 17
On January 1, 2021, Pedro purchased at face value 1,000 P1,000 face value bonds of San Miguel Corporation, a domestic corporation. The
bonds were dated January 1, 2020 and mature on January 1, 2031. The bonds pay 10% annual interest every December 31. Pedro sold the
investment directly to Juan on December 31, 2021 at 102. Which of the following statements is true?

The interest income from the investment is subject to a final withholding tax of 5%
The gain on sale is subject to a final withholding tax rate of 20%
The gain on sale is subject to basic income tax
The interest income from the investment is subject to a final withholding tax of 12%

Question 18
On January 1, 2018, Lorna invested P1,000,000 to BDO's 5-year, tax-free time deposit. The long-term deposit pays 10% annual interest every
January 1. In need of cash, Lorna pre terminated her investment on July 1, 2021. How much is the final tax due in 2021?
P42,000

Question 19
Which of the following statements is correct?
I. Beginning January 1, 2018 but prior to the effectivity of the CREATE Law, PCSO winnings of not more than P10,000 received by citizens,
residents and non resident aliens engaged in trade or business are exempt from income tax.
II. Beginning January 1, 2018 but prior to the effectivity of CREATE Law, PCSO winnings of more than P10,000 received by citizens, residents
and non-resident aliens engaged in trade or business are subject to 20% final withholding tax.
III. PCSO winnings of not more than P10,000 received by non-resident aliens not engaged in trade or business are exempt from income tax.
IV. PCSO winnings of more than P10,000 received by non-resident aliens not engaged in trade or business are exempt from income tax.
I only

Question 20
Paul, a nonresident alien engaged in business in the Philippines, received PCSO winnings amounting to P50 million on May 8, 2021. The PCSO
winnings shall be:

Exempt from income tax

Subject to final withholding tax of 20%.
Subject to basic income tax.
None of the above

Question 21
Which of the following income of an individual taxpayer is subject to final tax?

Share in the net income of a general professional partnership received by a resident citizen.
P10,000 prize in Manila won by a resident citizen.
Dividend received by a non-resident alien from a domestic corporation.
Dividend received by a resident citizen from a resident foreign corporation.

Question 22
The next two (2 questions are based on the following data:
Carlo received the following passive income in 2019:

Interest, peso deposit, MBTC 100,000

Interest $ deposit, BDO ($10,000 x P42) 420,000
Interest deposit in Hongkong (HK$10,000 x P5) 50,000
Prize (TV) won in a local lottery 50,000
PCSO winnings 2,000,000
Prize won in contest in U.S. 300,000
Lotto winning in U.S. 100,000
Dividend, domestic company 600,000

a Determine the total final tax in 2019 assuming he is:

RC NRC NRAET NRANET
a. P553,000 P490,000 P150,000 P687,500
b. 553,000 490,000 550,000 687,500
c. 131,000 90,000 90,000 90,000
d. P553,000 P490,000 P550,000 P687,500

b Assuming the incomes were earned during the effectivity of the CREATE law, how much is the correct final withholding tax on passive income
assuming further that Carlo is:

RC NRC RA NRA-ET
a. P553,000 P490,000 P150,000 P687,500
b. P553,000 P490,000 550,000 687,500
c. P553,000 90,000 90,000 90,000
d. P553,000 P490,000 P550,000 P687,500

Question 23
Which of the following statements is not correct?

Interest income received by individual taxpayers from long term bank deposit is exempt from income tax.
PCSO winnings not exceeding P10,000 received by a resident alien is exempt from income tax.
Royalties on books, literary works and musical compositions are subject to 10% non creditable withholding tax.
A prize of P10,000 is subject to 20% final tax.

Question 24
Paul, a resident citizen, received PCSO winnings in 2021 amounting to P10,000. What type of income tax will apply?

Final withholding tax on passive income

Capital gains tax
Exempt
Basic income tax

Question 25
If the amount of PCSO winnings in the preceding number was received by a nonresident alien not engaged in trade or business, what type of
income tax will apply?

Exempt
Capital gains tax
Basic income tax
Final withholding tax on passive income

Question 26
Statement 1: All royalty income derived from sources within the Philippines are subject to final withholding tax.

Statement 2. All royalty income derived from sources outside of the Philippines received by resident citizens are subject to basic income tax.
Both statements are correct

Question 27
Which of the following royalties earned within the Philippines is not subject to 10% final withholding tax?

Royalties from computer software

Royalties from books
Royalties from musical compositions
Royalties from literary works

Question 28
Lebron James received royalty fee from Viva Records Corporation, a domestic corporation, for his musical compositions under the album
"Whatever it Takes". James is an American composer and has never set foot in the Philippines. The royalty fee shall be subject to:
25% FWT
15% FWT
5%-32% graduated tax rate
20% FWT

Question 29
The following taxpayers who received dividend income from a domestic corporation will received net of 10% final withholding tax, except

Non-resident citizen
Resident citizen
Non-resident alien engaged in trade or business
Resident alien

Question 30
Which of the following income will be taxed in the same manner regardless of the classification of the taxpayer?

Ordinary gain on sale of land and/or building

Ordinary gain on sale of shares of stock of a domestic corporation
Capital gain on sale of shares of stock of a domestic corporation
Capital gain on sale of land and/or building

Question 31
Share in the net distributable income of a general professional partnership by a resident citizen is subject to:

Basic income tax

20% final withholding tax
6% capital gains tax
10% final withholding tax

Question 32
If a non-resident citizen received his share in the income of a taxable joint venture, what type of income tax that will apply on the said income?

Capital gains tax

Basic income tax
Fringe benefit tax
Final withholding tax on passive income

Question 33
LJ and Fermin formed a joint venture. They agreed to share profit or loss in the ratio of 70% and 30%, respectively. The results of operations for
2021 taxable year were provided below:
Joint Venture LJ Fermin
Gross Income P5,000,000 3,000,000 2,000,000
Business expenses 3,000,000 2,000,000 1,000,000

The income tax due of LJ in 2021 is:

Assume the joint venture is nontaxable, the basic income due of LJ is:
Answer 1: P288,000
Answer 2:P618,000

Question 34
Use the following data for the next five (5) questions:
Philippines Abroad
45,000 25,000
Interest income from long term peso bank deposits
50,000 60,000
Interest income from long term FCDU deposits
20,000 30,000
Royalties from books
20,000 40,000
Royalties from computer programs
Winnings from an electronic draw during Smart Communication's 50th anniversary (chosen
randomly by the network using smart subscribers' sim card numbers)
30,000 -
Dividend income from a domestic corporation
27,000 13,000
Dividend income from a foreign corporation
33,000 22,000

How much is the final withholding tax if Ana is a resident citizen?

How much is the final withholding tax if Ana is a resident alien?
How much is the final withholding tax if Ana is a non-resident citizen?
How much is the final withholding tax if Ana is a non-resident alien engaged in trade or business?
How much is the final withholding tax if Ana is a non-resident alien not engaged in trade or business?

Answer 1:P22,200
Answer 2:P22,200
Answer 3:P14,700
Answer 4: P17,400
Answer 5: P35,500

Question 35
Statement 1: Tax CGT on sale of real properties shall be paid within 30 days from sale or disposition
Statement 2: The CGT on the unutilized portion of the proceeds in case of sale of a property classified as a principal residence shall be paid
within 30 days after the expiration of the eighteen (18) month period.
A B C D
Statement 1 True False True False
Statement 2 True False False True

Question 36
Which of the following transactions is subject to 6% capital gains tax:

Sale of vacant lot by an employee

Sale of apartment houses
Sale of real property utilized for office use
Sale of condominium units by a real estate dealer

Question 37
Statement 1: The determination of 6% capital gains tax on sale of real property is based on net capital gains realized by the seller of real
property.
Statement 2: Except for certain passive income, a nonresident alien not engaged in trade or business shall be taxed at 25% of his gross income
derived from sources within the Philippines
Only statement 2 is correct

Question 38
Vincent sold a residential house and lot held for P10.000.000 to his friend. Its FMV when he inherited it from his father was P12,000,000
although its present FMV is P15,000,000.

P900,000 capital gains tax The tax on the above transaction is:
Subject to P450,000 capital gains tax Assuming the house and lot was Vincent's principal residence and he used 12M of the proceeds to buy a
new principal residence within eighteen (18) months after the above sale. Assume further that Vincent properly informed the BIR about the
sale. It shall be:
P0 Based on the above problem, but assuming the residential house is located abroad, the capital gains tax is:
Answer 1: P900,000 capital gains tax
Answer 2: Subject to P450,000 capital gains tax
Answer 3: P0

Question 39
Gain from sale of real property classified as capital asset located abroad by a resident citizen is subject to

A B C D
6% CGT True False True False
Section 24A of the tax code True False False True

Question 40
Pedro, single, is a minimum wage earner of Makibaka Corporation. In addition to his basic minimum wage of P180,000 for the year, he also
received the following benefits:

Holiday pay, P32,000

Overtime pay, 25,000
Night shift differential, 18,000

The income subject to tax should be

P75,000
P255,000
nil

Question 41
Statement 1: Where an income tax return is required (e.g., in loan applications), and the individual did not file an income tax return because of
the rules on "substituted filing of income tax return" the certificate of withholding income tax signed by the employer and the employee will be
the document to use

Statement 2: The rules on substituted filing of income tax return cannot apply if one of the spouses has business or mixed income

Both statements are true

Question 42
1 / 1 pts
The following are the requirement for substituted filing of income tax return, except
He had consecutively filed his income tax return for the past five years.
His income was purely compensation income.
He had one employer only.
Income tax withheld by the employer is correct.

Question 43
Statement 1: If an employee had multiple employers within the year, an income tax return must be filed at the end of the year.
Statement 2: an employee had three employers, on succession, for each of the past three years, substituted filing of tax return is not allowed.
Statement 1 is true but statement 2 is false