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1. Under RA 9010 the following will be subject to EVAT starting January 1, 2003, except:
a. b. c. d. Professionals, actors, actresses, talent, singers, etc. Banks and non-bank financial intermediaries Services performed as professional athletes Cabarets, night clubs and racetracks
2. Export of Marikina shoes is subject to:
a. 12% VAT
b. 0% VAT c. Exempt d. Specific Tax 3. Assessment is necessary in the following cases, except: a. before the preliminary investigation of a fraudulent tax evasion case could prosper b. to fix the tax liability of a taxpayer c. establish a case for judicial action d. for issuance of warrant of distraint or levy 4. The prescriptive period for collection of taxes is: a. 10 years from discovery of omission to file return, falsity or fraud if there is no assessment b. 3 years from filing of return c. 5 years from release of assessment d. a and c are correct 5. Importation of automobiles is subject to: a. Graduated Ad valorem tax of 2% to 60% b. VAT of 12% c. Specific tax d. a and b e. Exempt 6. The manufacture and importation of the following for local consumption are subject to excise tax, except: a. b. c. d. alcohol products tobacco products cinematographic films mineral products
7. Domestic sale of bagoong is: a. exempt from VAT b. subject to 12% VAT if gross annual sales exceed P1.5M c. subject to 0% VAT d. subject to 3% percentage tax if exempt from VAT e. b and d are correct 8. The BIR commissioner may_________ payment of internal revenue tax when it appears to be unjustly or excessively assessed, or that the administrative and collection costs involved do not justify the collection thereof.
a. b. c. d.
compromise abate credit refund
9. No credit/refund of taxes shall be allowed unless the taxpayer: a. b. c. d. Files a written claim for credit/refund with the BIR within 2 years from payment Pays the tax under protest Appeals to the CTA Amends his tax return
10. Assessment is:
a. b. c. d. A written notice of the tax due Based on facts and not presumed Demand for payment of the tax within a prescribed period of time All of the above
11. The following are required to keep books of accounts, except: a. b. c. d. Corporations and partnerships Persons engaged in trade or business in the Philippines Persons who earn passive income None of the above
12. Requirements in order that retirement benefits may be exempt from income tax: a. Must be paid to an employee who is at least 50 years old and has served his employer for at least 10 years b. Exemption from taxation of retirement benefit must be availed of only once c. The benefit must be received under an existing Collective Bargaining Agreement d. a and b only 13. For purposes of the donor’s tax, the following are considered strangers: a. Brother or sister, whether whole or half-blood b. Relatives by consanguinity in the collateral line within the 4th civil degree c. Relatives by affinity, except the spouse of the donor d. None of the above 14. The special deductions from the gross estate are the following, except: a. Judicial expenses in testate or intestate proceedings b. Standard deduction c. Family home up to P1,000,000 d. Medical Expenses within one year from the death of the decedent not exceeding P500,000 15. Funeral expenses that can be claimed as deduction from the gross estate should be: a. Actual amount incurred b. Not exceeding P200,000 c. 5% of the gross estate d. The lowest of the above figures 16. The usual modes of avoiding the occurrence of double taxation are: a. b. c. d. Reciprocal exemption either by law or treaty Tax credit for foreign taxes paid Deduction for foreign taxes paid All of the above 2
None of the above 18. d. The contention is incorrect because taxes must be collected in order to support the government. an ordinance is passed by Quezon City granting a 50% discount for payment of unpaid real estate taxes for the preceding year and the condonation of all penalties on fines resulting from the late payment. c. The contention is incorrect because taxes are enforced contributions. The suit will prosper because the ordinance is discriminatory in character. b. Citing Section 10. Is the contention of the judge correct? a. Will his suit prosper? a. All of the above 19. Article VIII of the 1987 Constitution which provides that salaries of judges shall be fixed by law and that during their continuance in office their salary shall not be decreased. The following cases may not be compromised: a. Non-resident aliens engaged in trade/business in the Philippines are allowed personal exemptions based on reciprocity d. The contention is not correct because deduction of withholding taxes is not a dimunition contemplated by the fundamental law. Arguing that the ordinance rewards delinquent taxpayers and discriminates against prompt ones. Jose demands that he be refunded an amount equivalent to one-half of the real estate taxes he paid. depletion depreciation capital loss special loss 20. d. 3 . Jose files suit to declare the ordinance void on the ground that it is a class legislation. c. Jose is a law-abiding citizen who pays his real estate taxes promptly. The suit will prosper because the ordinance is not based on substantial distinction. The periodic decrease in the value of a fixed asset due to wear and tear.17. Each set of taxes is a class by itself and the law would be open to attack only if all the taxpayers belonging to one class were not treated alike. No. b. obsolescence or inadequacy a. e. No. d. Which of the following statements are true? a. No. Non-resident aliens not engaged in trade/business in the Philippines are not allowed any personal exemptions c. b. The suit will not prosper because the ordinance is based on substantial distinction. The municipal attorney rendered an opinion that Jose cannot be reimbursed because the ordinance did not provide for such reimbursement. c. The suit will not prosper because taxes are the lifeblood of the government and should be collected without unnecessary hindrance. a judge of a Regional Trial Court questioned the deduction of withholding taxes from his salary since it results into a net deduction of his pay. Resident Filipino citizens with income from foreign sources only are allowed personal and additional exemptions b. Criminal tax fraud cases Withholding tax cases Delinquent accounts with duly approved schedule of payments All of the above 21. c. b. Due to a series of typhoons and adverse economic conditions.
000 4 . b. None of the above 28. None of the above.000 income in his 2004 Income Tax Return. d. All of the above 23. The following conditions shall be observed when there is a net capital loss carry over: a. restaurants. No. e. The municipal mayor refused to sign the ordinance on the ground that it would constitute double taxation. Export sales of goods Domestic sale of goods in the regular course of trade or business Foreign currency denominated sale Sale of gold to Bangko Sentral ng Pilipinas 25. c. Survivorship agreement c. What is the minimum compromise rate in cases of doubtful validity of assessment? a. The contention is incorrect because deduction of withholding taxes is required by law. e. 40% of the basic assessed tax 10% of the basic assessed tax No limitation P1. b. b. and other establishments. Holding period for capital asset transactions d. The refusal of the mayor is unjustified because double taxation is allowed in our jurisdiction. The refusal of the mayor is not justified because double taxation will generate more revenues. seizure of real property to enforce payment of tax due: a.000. 26. No. Subsequently. No. The taxpayer should not be a corporation d. and other establishments selling liquor should pay a fixed annual fee of P20.000 24. The loss carried over is for a holding period not exceeding 12 months b. restaurants. d. None of the above. c. d. The refusal of the mayor is not justified because the impositions are of different nature and character. Levy Distraint Forfeiture Tax lien 27. This is a summary administrative remedy. The refusal of the mayor is unjustified because it is not within his power. c. Upon discovery in 2005.d. Tony has inadvertently omitted P100. Which of the following VAT transactions are not considered zero-rated? a. No. the municipal board proposed an ordinance imposing a sales tax equivalent to 5% of the amount paid for the purchase or consumption of liquor in stores.000. Barbaran municipality has an ordinance which requires that all stores. Is the refusal of the mayor justified? a. b. d. Which of the following cannot be considered as tax avoidance? a. No. Splitting of donation b. the BIR issued an assessment for deficiency income tax for P100. 22. The amount of the loss should not exceed the income before exemptions in the year when the loss was sustained c. c.
000 to IBP Which of the above donations are subject to donor’s tax? 34. Meanwhile.000 Taxable to the extent of P20. P500. Tony included the omitted P100. Shirley was allowed to deduct P200. 2006: a. he made a gross sales of P2. d. VAT tax effort to Gross National Product equals 4% d. _____________ is necessary: a. National Government Deficit to Gross Domestic Product in the previous year exceeds 1 ½ % c. d. c. VAT collection to Gross Domestic Product in the previous year exceeds 2 4/5% b. c. where she had a net income before bad debts of P180. The ___________ has exclusive and original jurisdiction over all criminal offenses arising from violations of the National Internal Revenue Code or Tariff and Customs Code and other laws administered by the Bureau of Internal Revenue or the Bureau of Customs. A taxpayer who believes that a tax ordinance is unconstitutional should appeal to: a.000 P1. she was able to recover the bad debts written off in full.000 Not taxable 31. In 2004.000. P100.000 for campaign expenses of a senatorial candidate c. Any of the following conditions should be met to enable the President to increase the VAT from 10% to 12% starting January 1. P300. Amend his 2004 Income Tax return to reflect the correct amount of income Pay the assessed tax plus surcharge. Either a or b 33.000 to the Iglesia ni Kristo b.000 income in his 2005 Income Tax Return. He is liable for VAT registration fee of : a. Taxable to the extent of P180. and thereafter . d. Tino is engaged in buying and selling of fresh fruits at the Q-Mart and Aranque Markets.plus 50% fraud surcharge. The bad debts recovery is: a. P200. b. Before any civil or criminal action is filed by the BIR in court. He is also exporting canned and preserved fruits to Japan.000. b. What advice will you give Tony? a. ask for refund Protest the assessment Any of the above 29. b. d. d.000 to victims of calamities d. c.000 bad debts written off in 2003. In 2004 Allan gave the following donations: a.500 Exempt 30. c. BIR Commissioner Metropolitan Trial Court Court of Tax Appeals Secretary of Justice 32. Approval of the Secretary of Justice Approval of the BIR Commissioner Approval of the Secretary of Finance Approval of the President 35. IN 2004.000. b. P500 P1.000 and a net loss of P20. c. b. 5 .000 Taxable to the extent of P200.
b. ABC Printers did not pay said tax. Could the BIR now assess ABC Printers for back taxes corresponding to the years before the new ruling? a. c. The following income are not taxable. Resident Filipino citizen 41. c. Yes. d. Non-resident alien engaged in trade/business in the Phil. Cash dividends received from a domestic corporation are subject to final tax of 10% if received by: a. b. Salary of farm workers in the form of products raised in the farm. c. b. c. ABC Printers submitted a legal query to the Bureau of Internal Revenue on that issue. The reversal of the ruling is consistent with the lifeblood doctrine. c. d. The principle that where a claim for refund/credit is filed beyond the prescriptive period. claimed is one million pesos or more. Yes. is: a. 6 . it can still be applied against other taxes that may be due. d.000 per quarter his income tax return must be accompanied by: a. a. Separation pay of employees who voluntarily resigned Value of leasehold improvement constructed on the leased land Increase in market value of land e. except: a. Doctrine of equitable benefit Doctrine of equitable recoupment Equitable tax benefit rule Cohan Rule 37. Relying on this ruling. Due to an uncertainty whether or not a new tax is applicable to printing companies. Where the gross income of a taxpayer exceeds P150. exclusive of charges and penalties. Audit certificate of an independent CPA Comparative Financial Statements Schedule of Taxes and Licenses Summary of Income payments 39. BIR Commissioner Metropolitan Trial Court Regional Trial Court Court of Tax Appeals 36. b. The reversal of the ruling is not prejudicial to the taxpayer. d. Yes. b. the BIR reversed the ruling and issued a new one stating that the tax covers printing companies. The reversal of the ruling is within the power of the BIR. d. however. Resident foreign corporation c. b. e. None of the above 40. The reversal of the ruling does not result in grave injustice to the taxpayer. d. Public purpose Uniformity Principle Not to let the collection of taxes to private person All of the above 38. d. None of the above. The BIR issued a ruling that printing companies are not covered by the new law. c. Subsequently. Another domestic corporation b.where the principal amount of taxes and fees. The fundamental principles of local taxation are: a. Yes.
d.42. e. c. d. The following are subject to amusement taxes: a. Gross receipts of carnivals Gross receipts of cinemahouses Professional basketball games Gross receipts of circus 43. b. b. Collect national internal revenue taxes d. summon and examine witnesses c. All of the above 46. Court of Tax Appeals Collector of Customs Regular courts Secretary of Finance 49. The BIR Commissioner can inquire into the bank deposit of the taxpayer in the following cases: a. The amount does not qualify as income The recipient is always the beneficiary The life insurance policy always provides for exclusion The amount is paid upon the death of the insured None of the above 47. d. The equal protection clause is subject to reasonable classification. Rest on substantial distinction Germane to the purpose of the law Not limited to existing conditions only All of the above 50. To determine the gross estate in estate tax cases Compromise on the ground of financial incapacity Taxpayer executes a waiver of the Bank Secrecy Law All of the above 48. The BIR Commissioner is empowered to: a. d. c. c. d. b. Weapons of war 7 . Classification to be valid must: a. d. b. Life insurance proceeds shall not be included in taxpayer’s gross income when: a. The following are prohibited importations. c. Toll License Penalty None of the above 44. The power to tax may be delegated to: a. The following are considered taxes: a. b. Seizure and forfeiture proceedings are within the exclusive jurisdiction of a. c. Obtain information. Interpret tax laws and decide tax cases b. c. except: a. The President BIR CTA a and b only 45. c. d. b. b.
Dumping duties Marking duties Discriminatory duties None of the above 56. d. surcharges or fees collected by the BIR as a result of the information given b. b. d. 2004. e.000. On November 30. one of the twins also died on December 15. Issuance of warrant of distraint/levy c. Compensation income Donation Indirect dividend Either a or b 57. Monthly support regularly given by an unmarried daughter to her aged mother. SAY died in the course of her delivery.b. d. d.000 8 . SAY gave birth to twins. what should JB indicate in the ITR as his civil status: a. Single Married with 2 dependents Head of the family with 1 dependent Head of the family with 2 dependents None of the above 53. b. a. Gambling devices Live animals 51. Informer’s reward is equal to a. The following criteria need not be observed in the exercise of the flexible power of the President under the Tariff & Customs Code: a. Filing of collection case in court b. e. b. d. c. Cancellation of debt of employee by his employer is taxable as a. The following are special customs duties. Unfortunately. except: a. Insidious articles Narcotic Drugs. JB got married to SAY last January 2004. however. c. 10% of revenues. c. P 1. c. b. d. 2004. Due to complications. c. In preparing his Income Tax Return (ITR) for the year 2004. Inaction of the BIR Commissioner within 180 days from submission of supporting documents by the taxpayer d. Taxable income of mother Subject to donor’s tax Exempt from tax None of the above 55. b. All of the above 52. National security Welfare of the people Jurisdiction of the Customs Commissioner National Economy 54. c. The following BIR actions on the protest of an assessment are tantamount to denial thereof: a.
VAT is a. The following non-resident aliens can be subject to 15% income tax on income derived from sources within the Philippines. if employee resigned at the age of 60 d. c. c. Publicly held corporations Insurance companies Banks and other non-bank financial intermediaries None of the above 9 . b. e. d. 63. a or b whichever is lower d. b. a. d. c. if the employer closed shop e. employed by regional area/operating headquarters of multinational companies employed by OBU employed by petroleum service contractor and subcontractor all of the above 60. all of the above 62. b. d. c. a or b whichever is higher 58. d. The following taxes have been replaced by VAT per RA 9337 a. c. sickness or injury of employee b. The following are not subject to the improperly accumulated earnings tax. except: a. b. c. if employee voluntarily resigned c. d.c. The following are taxed like corporation a. The following are duty-free articles: a. Personal articles Articles for repair Articles for public exposition/exhibits All of the above 59. special tax local tax specific tax regressive tax none of the above general professional partnership ordinary business partnership estates and trusts all of the above 64. a. fringe benefits tax common carrier’s tax caterer’s tax percentage tax on banks and finance companies b and c only 65. c. Separation pay is taxable. if separation is due to death. b. e. b. b. Which of the following taxes are not deductible from gross income: a. d. d. Philippine Income Tax Value Added Tax Transfer Taxes All of the above 61.
c. if made in the regular course of trade or business False. Sale of real estate is subject to VAT a. c. the same shall be subject to 12% VAT. d. False. it is exempt if what is sold is a residential unit a and b are correct 69. b. True. only if the total gross annual rentals received exceed P 1. The preliminary investigation of a fraudulent tax evasion case may be enjoined in the following cases. The taxpayer should pay the MCIT or the regular income tax whichever is higher. A taxpayer with gross annual sales not exceeding P100. a. a. True b. False. A revenue bill shall originate exclusively in the House of Representatives but the Senate may adopt its own version b. required to register with the BIR but exempt from the payment of registration fee c. Which of the following statements is wrong? a.000 per unit. required to pay registration fee d. 72. The Bicameral Conference Committee cannot make unauthorized insertions on the Senate version of the bill d. d. False. c. when there is a prejudicial question when double jeopardy is clearly apparent when charges are manifestly false and motivated by lust for vengeance when the court has no jurisdiction over the offense all of the above 68. False. d. b and c are incorrect 73. Why is the Fringe Benefits Tax collectible from the employer and not from the employee? a.5M c. b. Valuation of benefits is easier at the level of the employer Collection of FBT is ensured because it is withheld at source The employee does not have the means to pay a and b are correct 70. it is exempt if the real estate is classified as capital asset False. e. b. the Supreme Court held that: a. b. b and c are correct 71. The following are exempt from amusement tax: 10 . The MCIT is not computed quarterly but on an annual basis c. this is subject to 0% VAT. this is exempt from VAT under RA 9337 67. The MCIT payments can be carried over for the next 3 years immediately following such payment d. If monthly rental income of a residential unit exceeds P 10. d. without any further condition. The MCIT is equal to 2% of the gross income of the corporation b. 000 is exempt from payment of business tax and registration requirements. a. The requirement of three separate readings on separate days cannot be dispensed with c.66. True. In ruling on the constitutionality of the EVAT. True.
000 c. b. A tax imposed at every stage of distribution process on the sale. P 8. b.000 d. c. b. P 9. Income tax is not a a. The manufacture of casino rubbing alcohol is subject to: a. filed an appeal with the Court of Tax Appeals. e. d. personal tax national tax excise tax direct tax progressive tax 80. barter or exchange of goods and services and transactions deemed sale. c. privilege tax percentage tax VAT excise tax 77. Under RA8424. None of the above 78. Mario disputed a deficiency tax assessment and upon receipt of an adverse decision by the Commissioner of Internal Revenue. c. as well as importation of goods and services. what could Mario do to stop the process? a. Additional exemption for each dependent child per RA 9504 a. Granting arguendo that the BIR can legally levy on the properties. e. c. While the appeal is pending. Dispute BIR’s levy on the properties before the Court of Tax Appeals c. d. the allowable deduction for medical expenses of a resident decedent shall not exceed : 11 . P 25.a. d. professional basketball games boxing exhibitions billiards bowling c and d only 74.000 79. a. d. b. Secure a temporary restraining order before the Supreme Court. P 10. c. the BIR served a warrant of levy on the real properties of Mario to enforce the collection of the disputed tax. Appeal the BIR’s action to the Court of Appeals b. b. File a motion for injunction with the Court of Tax Appeals on the ground that such collection will jeopardize the interest of the taxpayer or the government.000 b. e. e. d. The following are subject to 3% common carrier’s tax. VAT percentage tax specific tax advalorem tax exempt 76. taxicab operators common carriers transporting cargoes tourist buses motor tricycles 75. d. except: a.
c. b. not available to resident decedents d. P 75. The following is not a taxable income of a resident Filipino citizen: a. Per RA 9504.000 P 500. c. who became a widow during the taxable year and supporting her mother and one mentally retarded illegitimate 25 year-old child? a. c. Which of the following are excluded from the gross estate? a. Who among the following are NOT required to file an income tax return? a. The standard deduction of P 1.000 P 550. d. There must be gain or profit The gain must be received or realized The gain must not be excluded by law or treaty from taxation The income must exceed the personal and additional exemptions of the taxpayer None of the above 87. 000 82. The following are the requisites for income to be taxable.000 P 5. 000 P 48. 000 P 40. Resident alien on income derived within the Philippines. e. power of taxation is exercised by a. proceeds of life insurance policy payable to an irrevocable beneficiary revocable transfers transfer in contemplation of death claims against insolvent persons none of the above 84. e. b. Which of the following are NOT exempt from income tax? 12 . optional b. income from an illegal business income from a business abroad income from casino winnings from lotto none of the above 83.000 81. A. Filipino citizen with business income from the Philippines. d. c. d. 000 P 100. c. e.a. d. Basically. e. c. in lieu of all itemized deductions 86.000. except: a. d. b. d. the President the Congress Judiciary BIR All of the above 85. in addition to the itemized deductions c. d. how much is the total personal and additional exemption of Mrs. b. 88. b. b.000 from the gross estate is: a. P 50. c. Non-resident alien engaged in trade or business An individual whose sole income has been subjected to final withholding tax. b.
b. 6% based on the gross selling price or zonal value. c. Who may not avail of the itemized deductions from gross income? a. b. b. c. it is subject to VAT if the sale is in the regular course of trade or business. Contributions of the employer for the benefit of the employee to retirement. whichever is higher. 45 years old mentally retarded son an illegitimate child legally adopted child all of the above none of the above 90. b and c are correct. 6% of the purchase price or the assessed value whichever is higher. capital gains tax of 5% and 10% of capital gain b. b.000. c.000 sometime in 1980. Sale. Domeng bought a parcel of residential land for P 1. 92. classified as capital asset is: a. b. d. except: a.000 on October 15. The final tax on capital gains from sale of real property. e. b. exchange or other disposition of shares of stocks which are traded in the local stock exchange is subject to: a. De minimis benefits. Resident aliens 13 . Tax evasion Tax avoidance Tax exemption Shifting All of the above 91. e. e.5% based on the gross profit.000. d. 7. 20% based on the gross selling price or current fair market value whichever is higher. None of the above 93. 10% VAT d. percentage tax of ½ of 1% of selling price c. barter. d. insurance and hospitalization benefits. True False. Benefits given to rank and file employees. dues and other expenses borne by the employer in social or athletic clubs or other similar organizations. False. The transaction is subject to 6% capital gains tax. if Domeng is engaged in the real estate business. e. a. d. 2000. He sold the same to Norbie for P 10. The following fringe benefits are not taxable. c. none of the above 94. d. Philippine Health Insurance Corporation Philippine National Oil Company University of the Philippines PAGCOR b and d 89. Which escape from taxation does not result in loss of revenue to the government? a. c. e. c. 95. whether granted under a collective bargaining agreement or not. Fringe benefits which are authorized and exempted from tax under special laws.a. d. Which of the following is a qualified dependent for additional exemption? a. Membership fees.
Tips and gratuities paid directly to an employee by a customer and not reported to the employer a. e. the following 103. Under the “Life-Blood doctrine”. d. d. The oft-cited doctrine that taxes are lifeblood of the government does not favor one of the following rules: a. except: a. Taxable compensation income and subject to withholding tax. a. d. b. c. d. The power to tax includes the power to destroy in all cases. Taxes are not subject to set off Taxes should be collected without unnecessary hindrance Tax exemptions should be sparingly granted Doctrine of Equitable Recoupment In our jurisdiction. not political penal civil both a and b both a and c 98. b. Citizens and resident aliens whose income is purely compensation income. 96. The first statement is false while the second statement is true. Not taxable. Resident foreign corporations. Administrative regulations and rulings or opinions of the Secretary of Justice. c. c. Taxable compensation income but not subject to withholding tax. c. Non resident aliens engaged in trade or business in the Philippines. The debt must be actually ascertained to be worthless and uncollectible during the taxable year. d. 99. b. The first statement is true while the second statement is false d. b. What is the nature of tax laws? a. b. Which of the following is not a source of tax laws? a. a. It must be evidenced by a closed and completed transaction. The debt must be charged off during the taxable year. b. c. 97. 101. d. b. 100.b. Administrative regulations and rulings or opinions of the Secretary of Finance. There must be a valid and subsisting debt. the main source of revenue of the government is taxes. Administrative regulations and rulings or opinions of the Commissioner of Internal Revenue. Taxes are not enforced proportional contributions. statements are correct except: 14 . Administrative regulations and rulings or opinions of the Secretary of Budget and Management. No credit/refund of taxes shall be allowed unless the taxpayer: Files a written claim for credit/refund with the BIR within 2 years from payment Pays the tax under protest Appeals to the CTA Amends his tax return 102. The following are requisites for the deductibility of bad debts. Both statements are true. c. d. Both statements are false. Subject to donor’s tax. c. c.
b. Which of the following prevents the occurrence of double taxation? 15 110. d. d. .a. 108. Upon taxation depends the Government’s ability to serve the people for whose benefit taxes are collected. a. 107. Which of the following judicial pronouncements is most recent: a. c. The act of assessing and collecting taxes is administrative in character. The rule of taxation should not be proportionate. c. 111. b. Which of the following statements is true: a. The power to tax is not unlimited. said Chief Justice Marshall of the US Supreme Court. d. This violates the 106. Taxes are obligations created by law. b. The power to tax involves the power to destroy. Taxpayer must receive personal benefit for the payment of tax. Tax exemptions are liberally construed in favor of the government. b. This should be construed to mean that: a. d. principle of: a. Taxes are always based on the amount received by the taxpayer. The following propositions are erroneous exept: Public purpose includes indirect public advantage. c. The nature of the state’s power to tax is two-fold. 105. 104. The power to tax is inherent because it requires a set of rules. a. To reduce social inequality To protect our local industry against unfair foreign competition. Payment signifies an act of compliance by the taxpayer. Congress passed a law allowing the payment of taxes in kind/services. Legislative power to tax involves the promulgation of rules. The secondary or non-revenue purposes of taxation include the following except: As an implement of the police power of the State To encourage the growth of local industries. d. d. c. c. b. c. c. d. b. 109. The power to tax may be used solely for the purpose of raising revenues. b. The power of taxation is unlimited b. The power to tax is superior to all other forms of the government. The BIR should be given the necessary discretion to avail itself of the most expeditious way to collect taxes. The power to tax includes the power to regulate even to the extent of prohibition or destruction. All of the above. Taxes cannot be imposed by the executive department not by the courts. The best evidence obtainable under Section 6 (B) of the NIRC does not include mere photocopies of records/documents. c. Economic efficiency Fiscal adequacy Theoretical justice Administrative feasibility Which of the following statements may not be untenable: a. Taxes are based on one’s ability to pay. Taxes are levied by authority of the law. d. Symbiotic relationship theory is different from benefits received principle.
1998. while the latter is granted under Section 35. whereas the latter covers only natural persons. The following items are taxable except: Illegal gains Tax refund involving deductible tax Tax refund involving non-deductible tax Cash dividend Annuities Gross income means all income derived from whatever source. d. b. whereas the latter may apply to individual taxpayers. a. 2000. a. The former applies to corporate and individual taxpayers engaged in business or are practicing their profession. 113. The former is a privilege while the latter is a matter of right. e. None of the above 112. Which of the following statements is not correct? Interest on government securities is not tax exempt effective January 1. 119. 117. a. Gross estate includes the following items except: Transfer for insufficient consideration Donations mortis causa Revocable transfers Transfer under special power of appointment. b. a. c. Exemption method d. Pensions Prizes and winnings Rents Stock dividends Exclusions from gross income under the Tax Code include the following except: Veterans benefits Compensation for injuries and sickness Gifts. Premium on life insurance may be taxable to the employee. d. c. 115. b. Donation to stranger is subject to 30% of the net gift. c. b. d. Fringe benefit is subject to 32% final tax effective January 1. c. 116. Stranger includes: 16 . b. c. b. 118. bequests. Allowable deduction c. c. including the following items except: a. b. c.a. d. d. Allowable deductions are distinguished from personal exemptions in that: a. Stock dividend is tax exempt. d. a. The former may be availed of only by corporate taxpayers. 114. d. and devises Gains from redemption of shares of stock Fringe benefit tax shall be paid by the employer because: The employee received the benefit net of tax The Tax Code expressly so states The employer relieves the employee of the burden to pay the tax The employer is the agent of the employee for the payment thereof. Vanishing deduction b. The former may be found in Section 34.
d. 98 SCRA 148 Philex Mining vs. Pao. b. The power to tax is supreme and unlimited. 126. This should be construed to mean that: a. 158 SCRA 9. CTA. d. because taxation also involves the power to carry out the legitimate objects of government. set-off said claim against his other tax liabilities? a. d. 25 SCRA 827 Punzalan vs. d. b. b. c. Gomez vs. b. Fernandez. because taxes may be imposed to regulate. c. c. c. 86 SCRA 270 122. Provision of the NIRC granting tax credit. Pineda. 125. The police power. “Lest the collector kill the hen that lays the golden egg. This pronouncement was cite in several decisions of the Supreme Court except in the case of: a. Srictissimi juris may be applied in the construction and interpretation of tax laws except: a. 294 SCRA 678 121. provided that the claim is set-off against other unpaid income tax. 21 SCRA 105 Vera vs. May a tax be validly imposed in the exercise of the police power and not of the power to tax? a. 23 SCRA 276 Villegas vs. Yes. provided that the claim is set-off against other national internal revenue tax. Algue. c. b. d. 17 . The power to tax is plenary and comprehensive.” This has been metaphorically mentioned to justify a settled rule as laid down in the case of: a. Manila. because the power to tax and police power have some similar objectives. Local ordinance imposing business tax. is an amplification of: a. The symbiotic relationship theory as enunciated in the case of CIR vs. d. CIR. 120. Yes. d. Yes. Yes. Araneta. BIR can still present evidence to prove assessment. 124. Settled is the rule that in tax matters. the power of taxation and the power of eminent domain are co-equal and inherent powers of government. Yes. c. provided that the claimant is a VAT-registered taxpayer. Local ordinance granting tax amnesty. May a taxpayer who has claim for VAT input credit or refund. c. Special law lowering tax rate. 95 SCRA 46 Roxas vs. The state may still collect prescribed taxes. Palomar. Yes. b. the government is not estopped by the errors or mistakes committed by its agents or officers. Yes. b. because the police power of the state includes the power to regulate c. d.a. Second cousin Half brother Lineal descendant Collateral relative within the fourth civil degree of relationship Taxes are the lifeblood of the government and their prompt and certain availability is an imperious need. 89 SCRA 199 Lutz vs. provided that the claim is duly substantiated by receipts.. Ability to pay principle Progressive system of taxation Lifeblood doctrine Benefit-protection theory 123. Inc. Yes. Commissioner vs. b.
Cash basis 134. May the collection of taxes be barred by prescription? a. Taxable rent income includes the following items except: a. How is compensation paid in promissory note treated for income tax purpose? a. b. provided that they are custom duties. Accrual basis e. provided that they are income taxes. because taxes are needed to carry out the legitimate objects of the government. Spread-out method c. d. provided that they are local taxes. Yes. d. Taxes are not subject to set-off because: a. None of the above. Any amount received under claim of right is taxable if: a. To prevent the taxpayer on the cash basis from postponing the actual receipt of taxable income. To prevent tax evasion. 130. Outright method b. To ensure collection of taxes. d. Yes. No. Income from long-term contracts may not be reported under one of the following methods: a. e. To compel taxpayers to report their income c. Taxes are the sinews of the state. None of the above. Taxes are enforced charges Taxes should be collected without unnecessary hindrance Taxes are not ordinary obligations. What is the purpose of the doctrine of constructive receipt of income? a. c. d. It arises from illegal transaction. e. c. It is received without restriction as to its disposition. e. e. c. except if the collection will jeopardize the interest of the taxpayer. Taxes are the lifeblood of the government. c. b. b. Completed contract basis d. b. Yes. b. Value of permanent improvement Premiums paid on the insurance of the leased premises Royalties Interest on bond issued by the lessor 133. No. c. May the courts enjoin the collection of revenue taxes? a. Yes. It is decreed by the court The claimant dies The claimant donates the same 132. d. Subject to final tax 18 . 128. 131.127. because taxes are the lifeblood of the government. provided that they are imposed by special laws. 129. e. provided that the tax law provides for prescriptive periods. Yes. except if the taxpayer is financially incapable. No. b. d. No.
For tax purposes. The following can avail of the Input Tax Credit. d. Cost of carabao used in farming is deductible as any ordinary expense. Exporter of goods and services not registered under the VAT system 19 . c. Either or both parents Brother/Sister of whole or half-blood Senior citizen Grandchildren 140. refined sugar. Deduction from foreign taxes paid d. c. because carabao is a capital expenditure c. b. except: a. living expenses Wagering losses Kickbacks 141. c. b. Both b and c 137. except: a. a. Purchaser of domestic goods upon consummation of the sale c. c. mackerel. Under RA 9337. d. True b.5% 4% 2% 8% 138. Specific tax VAT Percentage tax Excise tax 136. and packed noodle-based instant meals at the rate of: a. Capital Receipts Realized profit None of the above 142. The following are qualified dependents of a head of the family. income is synonymous to: a. d. cooking oil. d. False. 135. 1. It is taxed at gross amount Taxable to the amount of the fair market value of the promissory note It is deductible from gross compensation income None of the above Tax applicable to certain specified goods or articles manufactured or purchased in the Philippines for domestic sale or consumption. c. Tax saving device within the means sanctioned by law c. a and c only 139. a presumptive input tax credit is allowed to processors/manufacturers of milk. False. a. b. sardines. Which of the following is deductible for income tax purposes: a. e. Employer’s contribution to pension trust Personal. b. b. because carabao is subject to depreciation d. Tax evasion is: a. Importer of goods/articles previously subjected to VAT b. d.b. family. c. Means of escape from tax liability outside what is legal and permissible b. d.
c. Interest on deposits with BPI Family Bank e. For VAT purposes in connection with deferred payment sale of real property. 145. what should MAR indicate in the ITR as his civil status? a. 2005. e. Educational services rendered by private educational institutions are exempt from VAT if duly accredited by the following. d. SALLY gave birth to twins. Proceeds of life insurance received by a child as irrevocable beneficiary b. e.000 as moral damages c. royalty or fee 143. In our jurisdiction. lessee or licensee upon payment of compensation. P300. Determine which of the following is (are) included in the preparation of annual income tax returns: a. SALLY died in the course of her delivery. Income from jueteng Gain arising from expropriation of property Taxes paid and subsequently refunded Recovery of bad debts previously charged off All of the above 147. Single 20 . Culture and Sports Technical Education and Skills Development Authority 144. b. In preparing his Income Tax Return (ITR) for the year 2005. Taxes are imposed on persons and property within the territorial jurisdiction of a State. Unfortunately. 146. P500. JR was a passenger of an airline that crashed. d. Taxes are enforced charges and contributions. the term “initial payments” shall include: a. however.000 representing the cash equivalent of his earned vacation and sick leaves. d. Taxes are levied by the executive branch of the government.d. 13th month pay and de minimis benefits c. Dividends received by a domestic corporation from another domestic corporation. b.000 for his hospitalization b. except: a. He survived the accident but sustained serious physical injuries which required hospitalization for 3 months. which of the following statements may be erroneous: a. Following negotiations with the airline and its insurer. Purchaser of services. P250. b. Payments made in the year of sale in addition to the down payment Mortgage on the real property sold not exceeding the cost thereof Evidence of indebtedness issued by the purchaser to the seller at the time of sale Down payment only made at the time of sale. Securities and Exchange Commission Commission on Higher Education Department of Education. b. On November 30. Which of the following amounts constitute taxable income? a. d. Determine which of the following items are taxable: a. rental. MAR got married to SALLY last January 2005. JR received from his employer the amount of P200. c. one of the twins also died on December 15. c.000 for loss of income during the period of his treatment and recuperation d. d. 149. Taxes are pecuniary in nature. 2005. an agreement was reached under the terms of which JR was paid some amounts. Due to complications. None of the above 148. c. Taxes are assessed according to a reasonable rule of apportionment.
b. In the spring of 2004. The Roman Catholic Church owns a 2-hectare lot in a town in Tarlac province. d. Florida b. e. Tuition fees Laboratory fees Rentals from canteen concessionaires Interest from money-market placements of the tuition fees Donation of a lot and building by school alumni 154. is idle or unoccupied. after issuance of the final assessment notice to the taxpayer. File an injunction before the Regional Trial Court Appeal to the Court of Tax Appeals Appeal to the Court of Appeals Proceed with Certiorari before the Supreme Court 152. Criminal tax fraud cases d. A taxpayer received a tax deficiency assessment of P1. Married Head of the family Widower None of the above 150. An individual client not engaged in realty business paid in full the P50. Which of the following cases may not be compromised: a. while the rest of the property. c. The Church and a convent occupy the southern side and middle part. Shares of stock in the Philippine subsidiary of the US Company where he worked. d. c. Which of these is correct? 21 . otherwise. e. The tax is imposable on the northwestern side which is idle or unoccupied. Bank Deposits with Citibank Makati and Citibank Orlando.000 and which has a fair market value of P60.000. d. Which of the following assets shall not be included in taxable gross estate in the Philippines? a. it would collect through summary remedies. The entire property is taxable for real property taxation 153. Delinquent accounts b. which are still pending. USA. The taxpayer requested for reconsideration stating the grounds therefore. c. XYZ Colleges is a non-stock. Cases under administrative protest. A condominium unit in Makati c. non-profit educational institution run by the Archdiocese of BP City. Which of the following item(s) is included in its Income Tax Return? a. b. while vacationing in Orlando.000 attorney’s fees of his counsel in lot which he bought in 1990 for P5. b. Shares of stock in San Miguel Corporation and PLDT. The exemption covers only the southern side and middle part occupied by the Church and a convent and the eastern side by a school run by the church. e. an American Citizen. Which of the following remedies can the taxpayer avail? a.2 Million from the BIR demanding payment within 10 days. c. d. d. Frank Sinatra. he suffered a heart attack and died. in particular the northwestern side. None of the above 151. was a top executive of a US company in the Philippines until he retired in 1999. the BIR sent a Final Notice before Seizure to the taxpayer. Which of the following is correct? a. Instead of resolving the request for reconsideration. The southeastern side by some commercial establishments. c. he decided to spend the rest of his life in the country. He applied for and was granted a permanent resident status the following year. Shares of stock in Disney World in Florida f. He came to like the Philippines so much that following his retirement. Florida. The Church may claim tax exemption on the entire land. None of the above 155. b.
Income tax b. Waiver is a taxpayer’s concession to the state. One of these has no time limit within which to assess: a. the state need not express its acceptance. Waiver being unilateral. Transfer taxes (donor or estate) c. One of these is not the correct period within which internal revenue taxes shall be assessed: a. The client-transferor is not subject to final capital gains tax d.000 b. acceptance by the state need not observe the level of authority of the officials empowered to accept. The waiver by the taxpayer must be accepted by the commissioner or his duly authorized deputy. The client-transferor is subject to final capital gains tax based on P50. 157. b. the taxpayer need not be notified. The waiver is a waiver by the taxpayer of his right to invoke the defense of prescription. the books and records of a taxpayer shall be subject to examination and inspection only once in a taxable year: a. Waiver of prescriptive period to last until the completion of investigation is valid. a. The client-transferor is subject to final capital gains tax based on P60. 161. The client-transferor is subject to income tax for the difference between P50. 159. Within 3 years from the date the return was filed c. d. When the excise tax due has not been paid c. Transfer by an exempt person of articles to non-exempt person d. None of the above 156. One of these is not an exception to the rule that for income tax purposes. d. it must be construed strictly against the state c.000 and P5. The government may issue jeopardy assessment b. b.a. Which of the following cases is pre-assessment notice required? a. Value Added Tax 22 . irregularity or mistake Verification of compliance with withholding tax laws When taxpayers requests reinvestigation Verification of capital gains tax liabilities 158. within 10 years from date of discovery of the falsity or fraud. One of these is true: a. To pre-empt the lapse of prescriptive period within which the government can assess and/or collect in court without assessment. When the taxpayer is outside the Philippines When there is fraud.000 c. Within 3 days after the last day prescribed by law for the filing of the return b. e. e. If return is false or fraudulent. b. thus. and when accepted. c. c and d only 160. When the commissioner or his duly authorized representative finds that proper tax should be assessed. d.000 e. within 10 years from date of discovery of failure to file return d. If no return was filed. The government may require waiver of prescriptive period c. In a discrepancy between the tax withheld and the amount actually remitted by the withholding agent b. Waiver being unilateral.
d. Local water district Public power – generating company Hospitals Schools 166. d. Transfer tax on sale or transfer 23 . you do not pay – a. Privilege tax 162. d. Capital gains tax Documentary stamp tax Local transfer tax Income tax 164. Which is not a levy on real property – a. the local government of one of these is prohibited to collect – a. factory site b. Municipal taxes on business & occupations Municipal fees & service charges Real property taxes Taxes on gross receipts of transportation businesses For casual sale of real property. b. c. d. c. Special assessment d. b. Special education fund b. b. Principal office c. none of the above 165. In local business taxes. Special classes of real property do not include – a. places thru which sales trucks pass d. c. Ad valorem tax on idle land c. One of these is not a type of local tax and other impositions – a. 163.
C 121. B 100 . D 46. D 76. D 79. E 134. B 40. D 57. E 98. D 32. B 63. D 5. B 67. A 4. B 20. B 117. D 56. C 107. E 160. D 36. C 31. C 68. E 74. D 23. A 137. D 91. D 78. D 159. A 120. D 66. D 83. C 113. D 69. E 147. C 154. D 116. B 49. E 135. B 25. C 93. D 90. A 15. C 112. A 133. B 110. D 106. A 10 . A 73.D 11. C 55. E 51. D 16. B 94. C 64. D 2. D 136. D 33. B 3. D 24 . C 54. B 75. D 21. D 162. C 143. C 29. C 122. B 35. B 71. B 142. B 153. B 9. B 152. B 26. B 86. A 144. A 39. D 104. D 60. D 41. E 128. D 88. D 50. D 119. D 47. C 130. C 118. C 92. D 52. D 12. A 125. D 115. A 30. D 163. B 166. C 165. D 123. D 140.A 101. C 151. C 158. B 132. B 70. C 22. B 161.A 108. D 61. A 8. C 58.ANSWER KEY TAXATION 1. A 145. B 43. C 7. C 80. C 149. D 28. E 42. F 155 A 156. E 65. A 84. D 129. D 148. B 37. D 87. D 34. C 14. A 157. D 13. D 103. B 150. B 126. D 114. D 18. C 59. C 77. B 111. A 82. C 99. C 105. B 85. B 72. D 96. D 97. B 62. D 81. A 141. D 19. A 139. C 109. D 44. D 17. B 124. A 102. E 89. A 24. C 131. B 53. A 27. A 95.C 127. D 48. A 6. B 138. D 45. E 148. D 164. D 38.
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