FINAL PREBOARDS IN TAXATION

1. The following basic features of the present tax system are true, EXCEPT:
a. It has adopted a comprehensive tax situs by using the nationality, residence and source rules.
b. The individual income tax system is mainly progressive in nature that it provides graduated rates of
income tax.
c. It has retained more schedular than global features with respect to individual taxpayers but has
maintained a more global treatment on corporations.
d. The tax exemption being construed strictissimi juris against the government is adhering to the tax
system.
e. None of the above.

2. The head priest of the religious sect PANANANMPALATAYA , as the corporation sole, rented 5,000 sq. m.
lot registered in its name for use as school site of a school organized for profit. The sect used the rentals

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for the support and upkeep of its priests. The rented lot is
a. Not exempt from real property taxes because the user is organized for profit
b. Exempt from real property taxes since it is actually, directly and exclusively used for religious

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purposes.
c. Not exempt from real property taxes since it is the rent, not the land, that is used for religious purposes
d. Exempt from real property taxes since it is actually, directly, and exclusively used for educational

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purposes

3. They restrict the exercise of the power of taxation although they are not embodied in the constitution
a. Theoretical Justice
b. Legislative in Character
c. Inherent limitations
d. Constitutional limitations
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4. Money collected from taxation shall not be paid to any religious dignitary except when
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a. The religious dignitary is assigned to the Philippine Army
b. It is paid by a local government unit
c. The payment is passed in audit by the COA
d. It is a part of lawmaker’s pork barrel
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5. Diplomatic officials such as heads of states and ambassadors are exempt from taxes and duties because
of
a. International comity
b. Reciprocity provisions
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c. Principle of territoriality
d. Exemption in the tax code

6. It is an official document that empowers a revenue officer to examine and scrutinize a taxpayer's books of
accounts and other accounting records, in order to determine the taxpayer's correct internal revenue tax
liabilities.
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a. Preliminary Assessment Notice

b. Final Assessment Notice
c. Audit engagement letter
d. Letter of Authority

7. This is issued by the BIR (usually after tax audit) informing the taxpayer of the discrepancies in the taxpayer's
tax payments wherein the taxpayer will be given an opportunity to present his side of the case within days
from receipt of the notice.
a. Notice of Informal Conference; 30 days
b. Notice of Discrepancy; 30 days
c. Preliminary Assessment Notice; 15 days
d. Final Assessment Notice; 30 days
8. Peter filed an Income Tax Return for the calendar year 2021 on March 10, 2022. The BIR assessed a
deficiency income tax on April 10, 2024. When is the last day for the BIR to make a Formal Letter of Demand
(FLD)?
a. April 10, 2024
b. April 15, 2024
c. April 10, 2025
d. April 15, 2025

9. Which of the following income derived from within the Philippines by a resident individual is not subject to the
rates in Section 24(A) of the NIRC? (RPCPA)
A. Salary received by a managing partner of a general professional partnership.
B. A passive income in the form of a prize won in a raffle amounting to P4,000.
C. A gain from sale of a motor vehicle as another income of a taxpayer who is a compensation income

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earner.
D. A gain on sale of a real property for private use of the family of the taxpayer.

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Use the following information for the next 3 questions:
Shaina reported following income and expenses in 2022:

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Business income, Philippines P300,000
Business income, United States 250,000
Expenses, Philippines 200,000
Expenses, United States 125,000
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Interest on deposit with Metrobank
Interest on deposit in U.S. ($1 = P50)
Cash prize won in a local contest
3,000
$500
P6,000
Cash prize won in a contest in U.S. 10,000
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Winnings in lotto 20,000
Winnings in lotto in U.S. 50,000
Dividends from SMC, a domestic 25,000
company
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10. The taxable income if Shaina is a resident citizen, single is _.

a. P61,000
b. P66,000
c. P316,000
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d. P331,000

11. The taxable income if Shaina is a non-resident alien ETB, married with five (5) dependent children is _.
a. P56,000
b. P74,000
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c. P106,000
d. None

12. The final tax on Shaina assuming she is a non-resident citizen is-
a. P7,100
b. P7,200
c. P9,600
d. P10,850

13. Optional standard deduction is allowed on _.

a. Resident alien
b. Non-resident alien engaged in trade or business
c. Non-resident alien not engaged in trade or business
 d. Non-resident foreign corporation

Numbers 14 and 15 are based on the following information:

David, married, with two dependent children, had the following income and expenses in 2020:

Salary (October to December), net of WT of P5,000 P155,000

13th month pay 12,900
Gross receipts from profession, net of WT of P1,800 88,200
Rent income, net of withholding tax 57,000
Gross receipts from business 165,000
Professional and business expenses 96,500

14. The income tax payable by David if he availed of the itemized deductions is _.

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a. P15,900
b. P25,700
c. P44,900

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d. P41,360

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15. The income tax payable by David if he availed of the optional standard deductions is _.
a. Exempt
b. P4,500
c. P5,200
d. P15,000
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Spouses Frank and Betty, government employees, had the following data in 2019:
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Frank Betty
13th month pay and other benefits P28,949 P8,605.00
SSS, Philhealth & HDMF contributions 24,549 4,559.75
Basic salary (gross of statutory contributions) 340,438 68,465.25
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RATA 96,000
Personnel Economic Relief Allowance 4,000 6,000.00
Overtime pay 12,450 4,457.04
Holiday pay 3,000 1,783.25
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Hazard pay 6,000.00

Total amount of taxes withheld 17,046

16. The income tax payable on Frank is _.

a. Zero
b. P22
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c. P18,422
d. P19,222

17. In 2019, Benjie sent his sister Nancy $1,000 via a telegraphic transfer through the Bank of Pl. The bank's
remittance clerk made a mistake and credited Nancy with $1,000,000 which she promptly withdrew. The
bank demanded the return of the mistakenly credited excess, but Nancy refused. The BIR entered the picture
and investigated Nancy. Would the BIR be correct if it determines that Nancy earned taxable income under
these facts?
a. No, she had no income because she had no right to the mistakenly credited funds.
b. Yes, income is a taxable income regardless of the source.
c. No, it was a case of solutio indebiti. There is no obligation to return the excess.
d. No, the funds in excess of $1,000 were in effect donated to her.
18. Mr. Juan de la Cruz transferred his commercial land with a cost of P500,000 but with a fair market value of
P750,000 to Velasco Corporation in exchange of the stocks of the corporation with par value of P1,000,000.
As a result of the transfer, he became the major stockholder of the corporation. As a result of the transfer-
a. The recognized gain is the difference between the fair market value of the shares of stocks and the cost
of the land.
b. The recognized gain is the difference between the par value of the stocks and the fair market value of
the land.
c. No recognized gain because the land was in exchange of purely stocks and Mr. de la Cruz became the
majority stockholder.
d. No recognized gain because the land was in exchange of stocks of the corporation.

19. Using the following cases:

2021 Case 1 Case 2 Case 3

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Income before write-off of bad P370,000 P170,000 P370,000
debt
Less: Bad debt written off 40,000 80,000 155,000

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Income after bad debt 330,000 90,000 215,000
2022
Amount recovered P40,000 30,000 150,000

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The taxable amount on the recovery of bad debt previously deducted is

A.
B.
C.
Case 1
P40,000
40,000
30,000
Case 2
P30,000
None
80,000
Case 3
P150,000
115,000
55,000
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D. 30,000 None 150,000

20. Binata Reyes won the International Billard Championship held in Madrid, Spain. The tournament was
sanctioned by a national sports association which is recognized by the Philippine Olympic Committee. He
was awarded U.S. $60,000 by the sponsor of the tournament. He was also given a cash prize of P250,000
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by Sarmiento Corporation. In the same year, he entered into a contract with the same company to advertise
their product for P1,500,000. If the exchange rate of every U.S. $1 is P50, Binata Reyes should report an
income of _.
a. P1,500,000
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b. P1,750,000
c. P3,370,000
d. P4,750,000

21. Miss Cruz had recently joined the MMC as sales executive. She was advised to be retrenched because the
company was losing heavily, but that she would be given a substantial separation pay. The general manager,
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however, suggested to Miss Cruz to file a letter of resignation from the company, instead of having been
involuntarily separated as the latter would have implications of inefficiency on her part. Miss Cruz chose to
resign from the company and received the sum of P100,000 as separation pay. The above amount is _.
a. Exempt from income tax
b. Taxable in full
c. Non-deductible expense on the part of the company
d. Partially taxable

22. ABC Company purchased a residential house and lot with a swimming pool in an upscale subdivision and
required the company president to stay there without paying rent; it reasoned out that the company president
must maintain a certain image and be able to entertain guests at the house to promote the company's
business. The company president declared that because they are childless, he and his wife could very well
live in a smaller house. Was there a taxable fringe benefit?
 a. There was no taxable fringe benefit since it was for the convenience of the employer and was necessary
for its business.
b. There was a taxable fringe benefit since the stay at the house was for free.
c. There was a taxable fringe benefit because the house was very luxurious.
d. There was no taxable fringe benefit because the company president was only required to stay there and
did not demand free housing.

23. XYZ Corporation assigned Mr. Passo one of its employees in the head office in Manila to manage their
branch office in Dagupan. The company provided for the residential house of the manager paying a monthly

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rental of P 34,000. The monthly fringe benefit tax thereon is _.
a. P8,000
b. P9,154

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c. P18,308
d. P26,154

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24. Based on the same data in the preceding item, the deductible expense from the gross income of XYZ
Corporation is _.
a. P26,154
b. P28,166
c. P42,000
d. P43,154

25. Which of the following is subject to income tax?

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a. SSS and GSIS
b. Philippine Health Insurance Corporation (PHIC)
c. Local water districts
d. Philippine Amusement and Gaming Corporation (PAGCOR)
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26. Power Corporation is registered under the laws of Queensland. It has extensive operations in Southeast
Asia. In the Philippines, its products are imported and sold at a mark-up by its exclusive distributor, Solo's
Trading, Inc. The BIR compiled a record of all the imports of Solo from Power and imposed a tax on Power
net income derived from its exports to Solo. Is the BIR correct?
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a. Yes. Power is a non-resident foreign corporation engaged in trade or business in the Philippines.
b. No. The tax should have been computed on the basis of gross revenues and not net income.
c. No. Power is a non-resident foreign corporation not engaged in trade or business in the Philippines.
d. Yes. Power is doing business in the Philippines through its exclusive distributor Solo's Trading. Inc.

27. B&B Corporation is a foreign corporation which is not engaged in trade or business in the Philippines. In
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2022 it had a gross income of P1,500,000 and expenses of P650,000 on its isolated transaction in the
Philippines.

The income tax due is _.

a. P212,500
b. P300,000
c. P375,000
d. P450,000

28. ABC Company, a domestic corporation has the following data:

Income tax for 2022 P1,100,000

 Less: Tax credits 1,250,000
Excess tax credits 150,000

2023 1st quarter

Income net of 1% withholding tax P4,950,000
Deductions 4,600,000

For the 1st quarter of 2023, the corporation will report:

a. Excess tax credit of P100,000

b. Tax payable of P7,000
c. Excess tax credit of P8,000
d. Tax payable of P2,000

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29. The Bicol School of Business and Arts (BSBA), is a private educational institution recognized by the

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government. The following are the financial data for its fiscal year ending June 30, 2022:

Tuition fees P13,800,000

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Miscellaneous fees 2,800,000
Interest on bank deposits 12,300
Rent income of school facilities to outsiders 450,000
Salary and bonuses, all personnel 7,500,000
Other operating expenses
Repayment of loan
Quarterly (three quarters) income tax paid
R 3,500,000
400,000
4,800
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A building was constructed on April 2, 2022 at a cost of P2,000,000 with a depreciable life of 50 years.

Assuming the cost of construction is treated as an expense, the income tax payable by the school for the
fiscal year ended June 30, 2022 is
a. 31,700
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b. 35,700
c. 36,500
d. 40,500
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30. What shall be the tax treatment for dividends received by a domestic corporation from a resident foreign
corporation (RFC)?
a. The dividends shall be subject to regular corporate income tax.
b. If the ratio of the gross income of the RFC within the Philippines to its world gross income for the three-
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year period ending with the close of its taxable year preceding the declaration of such dividends is at
least 50%, the dividends shall be exempt from income tax.
c. The dividends shall be exempt from income tax.
d. The dividends shall be exempt from income tax provided the domestic corporation complies with
certain requirements set by the CREATE law for its exemption.

31. Which of the following statement is wrong?

a. An essentially mortis causa transfer which has been titled as inter vivos shall be subject to donor’s tax
b. Estate tax is more of a revenue tax rather than a special tax
c. If the decedent died September 5 2017, but the actual transfer of possession of the property to the heirs
took place on June 5 2019 the estate tax will be computed based on the prevailing law on September 5,
2017.
 d. Under the Benefit Received Theory in estate taxation, the estate is a partner of the decedent in the
distribution of the latter’s estate.

32. Philip and Ella are married. They have legitimate children Lory and Paul. Philip died, survived by Elle, Lory
and Paul. His estate of P12,000,000 should be divided as follows:
Ella Lory Paul Free
portion
A. P3M P4.5M P4.5M None
B. 3M 3M 3M 3M
C. None 6M 6M None
D. 2.25M 4.5M 4.5M 2.25M

33. Kale died leaving the following properties:

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Stocks of Hamada Corporation (2,000 shares Listed in the PSE (Highest P40; Lowest - P39)
Common stocks of XYZ Corporation (1,500shares) not listed in the stock exchange. Cost - P50 per share;

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Book value –P45 per share
Car (cost - P600,000; book value P350,000; market value - P400,000)
Real properties (zonal Value – P320,000; assessed value at 20% - P72,000)

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The gross estate of Kale is _.
A. 818,500
B. 824,000
C. 906,500
D. 1,067,500
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34. The following transactions and acquisition exempt from transfer tax, except _.
A. Transmission from the heir or donee in favor of another beneficiary in accordance with the desire of the
predecessor
B. All bequests, devisees, legacies or transfers to social welfare, cultural and charitable institutions
C. Transmission or delivery of the inheritance or legacy by the fiduciary heir or legatee to the
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fideicommissary
D. The merger of usufruct in the owner of the naked title

35. What is the tax implication if a corporation condones the debt of a stockholder because of a good thing done
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by the latter to the corporation?

A. The condonation is based on the liberality of the corporation, therefore, it is subject to donor's tax
B. It is tantamount to a declaration of dividend. Therefore, it is an income which is subject to 10% dividend
tax on the stockholder. However, it is not subject to donor's tax on the corporation
C. The condonation is subject to donor's tax on the corporation because it is based on its liberality. Moreover,
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it is equivalent to a payment of dividend to the stockholder which is, therefore, subject to a dividend tax
of 10%
D. It is just a simple case of extinguishment of an obligation which is neither subject to income tax on the
stockholder not subject to donor's tax on the corporation.

36. One of the following is a valid donation.

A. Oral donation of a cellular phone worth P4,500.
B. Oral donation of a passenger jeepney worth P150,000.
C. A parcel of land worth P500,000 in a private document.
D. A house worth P500,000 in a private document
37. Brian wrote a letter to Lamont on December 31, 2017 donating his car worth P350,000. The letter was
received by the latter on January 7, 2018 who accepted the donation. The letter of acceptance was received
only by Brian on January 15, 2018.The donor's tax was not paid until May 22, 2019. The donation was
consummated on _.
A. January 7, 2018
B. January 15, 2018
C. May 22, 2019
D. December 31, 2017

38. Shanee donated a 1,000 square meter land to Mark with a condition that within two (2) years from the date
of donation, Mark will construct a two-storey building thereon, and that failure of the donee to comply with
the condition shall be sufficient ground for the revocation of the donation.

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Statement I: There shall be donor's tax on the donation even if it may be revoked in case of non-
fulfillment of the donation.
Statement II: In case of revocation of the donation, the donor's tax paid to the government may be

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refunded to the donor.

Which of the above statements is correct?

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A. Both statements are correct
B. Both statements are wrong
C. Only statement 1 correct
D. Only statement 2 correct

January 15, 2019

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39. Meriam made the following donations of cash to his son on account of marriage on October 2019 as follows:
P 75,000
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March 10, 2019 50,000
July 15, 2019 50,000
September 10, 2019 100,000

The tax due on September 10, 2019 donation is _.

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A. 780
B. 1,700
C. 1,500
D. Exempt
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40. In value-added taxation, this is not a requirement for taxability of service:

A. In the course of business
B. Consideration received actually or constructively
C. Supply of service is not exempt from VAT
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D. Performed within or outside the Philippines

41. Which statement is FALSE under the VAT law?

A. A VAT-registered person will be subject to VAT for his taxable transactions, regardless of his gross sales
or receipts.
B. A person engaged in trade or business selling taxable goods or services must register as a VAT person,
when his gross sales or receipts for the year 2019 exceed P3,000,000.
C. A person who issued a VAT-registered invoice or receipt for a VAT- exempt transaction is liable to the
12% VAT as a penalty for the wrong issuance thereof.
D. Once a doctor of medicine exercises his profession during the year, he needs to register as a VAT person
and to issue VAT receipts for professional fees received.
42. The following importations are exempt from VAT. Which one is not?
A. Importation of professional instruments and implements, tools of trade, occupation or employment,
wearing apparel, domestic animals, and personal and household effects belonging to persons coming to
settle in the Philippines, in quantities and of the class suitable to the profession, rank or position of the
persons importing said items, for their own use arriving within a reasonable time.
B. Importation of drugs and medicines prescribed for diabetes, high cholesterol and hypertension.
C. Importation of engine equipment of cargo vessels or aircraft for domestic or international transport
operations.
D. Importation of vehicles, vessels, aircrafts, machineries and other similar goods for use in manufacture.

43. Tsukuba Company, a VAT-registered business, had the following data during the quarter:

Zero-rated export sales P 1,815,000

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Domestic sales (tax included) 1,232,000
Purchases of goods for export, gross of tax 672,000
Purchases of goods for domestic sales, tax inclusive 323,120

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Purchases of supplies on domestic sales, net of tax 124,850

Assuming that the input taxes paid on purchases of goods for export are claimed as tax credit, the VAT

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payable by Tsukuba Company is _.
A. 10,398
B. 12,895
C. 84,895
D. 177,895 R
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44. Amie sold goods at a total price of P123,200 to Betty on account. Betty sold the same goods to Candy for
P143,000 (exclusive of tax) on cash. All of them are VAT registered taxpayers. Assuming that Candy is not
subject to VAT while Betty is VAT registered. In the sale of the goods by Betty to Candy _.
A. Betty should debit Cash of P125,840
B. Betty should debit Cash of P143,000 in her books.
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C. Candy should debit Purchases of P125,840 and a debit Input tax of P17,160.
D. Candy should debit Purchases of P 160,160.

45. Input tax is available to a VAT-registered buyer, provided that _.

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A. The seller is a VAT-registered person

B. The goods or service is subject to or exempt from VAT, but the sale is covered by a VAT invoice or receipt
issued by VAT-registered person
C. The seller issues a VAT invoice or official receipt, which separately indicates the VAT component
D. The name and TIN of the buyer is not stated or shown in the VAT invoice or receipt
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46. For 2019, input tax is not available as a credit against the output tax of the buyer of taxable goods or services
during the quarter, if _.
A. The VAT invoice or receipt of the seller does not separately indicate the gross selling price or gross
receipts and the VAT component therein
B. The VAT invoice or receipt of the seller is registered with the BIR
C. The VAT invoice or receipt is issued in the name of the VAT-registered buyer and his TIN is shown in
said invoice or receipt
D. The VAT invoice or receipt issued by the seller shows the Taxpayer Identification Number plus the word
"VAT" or "VAT registered person
47. At the time of retirement, Tyre had 500 pcs of merchandise which was deemed sale at a value of P150,000
with an output tax of P18,000 After retirement, Tyre sold to Rey 100 pieces for P35,000. In the contract of
sale Rey can claim an input tax of _.
A. 3,600
B. 5,000
C. 18,000
D. None

48. Statement 1: Inventories of goods for sale which are exempt from value-added tax may be subject to
transitional input tax when the seller becomes liable to VAT for the first time, or when he voluntarily registers
under the VAT system even if his annual turn-over does not exceed P3,000,000.
Statement 2: When a transitional input tax is created, the taxable person shall make a journal entry
debiting "Transitional input tax and crediting "Merchandise inventory."

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Statement 3: The purchase of fish to be processed into sardines shall entitle the manufacturer of
sardines to a 4% presumptive input tax.
Statement 4: A person who sells his riceland because he needs money for the hospitalization of his

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child is subject to VAT on the sale of real property

Which of the following options is wrong?

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A. Statement 1 is true, while statement 4 is false
B. Statements 2 and 3 are false
C. Statements 1 and 2 are true
D. Statements 3 and 4 are false
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49. Honiko bought five (5) units of Sweet television set with home theatre system from Hubby with a list price of
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P52,500. Trade discount is 10%, purchase discount is 3/10, n/30. Cost of freight as reflected in the bill of
lading of the forwarder is P1,344 per set, FOB shipping point, freight collect. What is/are the entry/entries in
the books of Honiko on the purchase transaction?
A. Purchases P210,937.50
Input tax 25,312.50
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Accounts payable P236,250.00

B. Purchases 234,375.00
Input tax 28,125.00
Cash 262,500.00
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C. Purchases 210,937.50
Input tax 25,312.50
Accounts payable 236,250.00
D. Purchases 210,937.50
Input tax 25,312.50
Accounts payable 236,250.00
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Freight-in 6,000.00
Input tax 720.00
Cash 6,720.00

50. Alexis is a real estate dealer. During the month of November 2022, he sold three (3) lots under the following
terms:

Lot 1 Lot 2 Lot 3

Selling price P 350,000 P 240,000 P300,000
Cost 150,000 130,000 175,000
 Gain/loss 100,000 70,000 125,000
Terms:
Downpayment, November 5 35,000 60,000 40,000
Due -
December 5 25,000 20,000 20,000
Jan. to Dec. 2023 200,000 130,000 240,000

All amounts indicated above do not include the tax.

The value-added tax in November is _.

A. ZERO
B. 16,200
C. 31,800

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D. 37,800

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51. Statement 1: There is a VAT on importation by an importer-merchant even if he does not intend to sell
the imported article.
Statement 2: A person who is exempt from VAT may register under the VAT system.

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A. Both statements are true
B. Both statements are false
C. Only statement 1 is true
D. Only statement 2 is true
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52. A VAT-registered contractor performed services for his customer in 2021 and billed him P11.2 Million, broken
down as follows: P10 Million services, plus P1.2 Million, 12% VAT. Of the contract price of P10 Million, only
P8 Million plus VAT thereon was received from the customer in 2021 and the balance of P2 Million plus VAT
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was received by the contractor in 2022. How much is the taxable gross receipts of the contractor for 2021,
for VAT purposes?
a. P8 Million, the amount received from the customer in 2021.
b. P8 Million plus VAT received from the customer in 2021.
c. P10 Million, the total cost of services performed in 2021.
C

d. P11.2 Million, the total cost of services performed plus 12% VAT.

53. RST Corporation is a VAT Registered dealer of appliances. The following data are for the month of October:
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Sales, total invoice value P 5,800,000

Purchases, net of input taxes 2,820,000
Sales return, gross of tax 200,000
Purchases return, net of input tax 300,000
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Deferred input taxes (carried over from the third quarter) 9,500
The value added tax payable for the month of October by RST Corporation is _.
A. 80,000
B. 288,100
C. 285,500
D. 320,500

54. Taxpayers who became VAT registered persons upon exceeding P3,000,000 in sales/gross receipts in any
12-month period, or who voluntarily registers even if their turnover does not exceed P3,000,000 shall be
entitled to a transitional input tax on the inventory on hand as of the effectivity of their VAT registration on the
following, except _.
A. supplies for use in the course of taxpayer's trade or business.
 B. goods which have been manufactured by the taxpayer.
C. goods in process for sale
D. capital goods being used in the operation of the business.

55. Rapid is a contractor. She entered into a contract on March 1, 2019 which was completed on March 31,
2019. She received the total value of the contract amounting to P550,000 on March 31, 2019. Rapid spent
for the materials used in the contract which she acquired from value-added registered suppliers costing
P150,000. All amounts are exclusive of VAT. The value-added tax payable by Rapid for the month of March
is _.
A. 15,000
B. 40,000
C. 48,000
D. 59,500

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56. Mr. Wang, rents his 12 residential units for P14,800 per month. During taxable year 2022, his accumulated
gross receipts amounted to P2,131,200. He is subject to _.

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VAT 1% percentage tax
A. Yes Yes
B. Yes No

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C. No Yes
D. No No

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57. Converge Company operates two lines of business. Business 1 is subject to VAT, while Business 2 is not.
Data for the month are as follows:
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Sales
VAT business, VAT included P 560,000
Non-VAT business 100,000
Purchases
Merchandise, VAT business, VAT included 154,000
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Merchandise, Non-VAT business 67,100

Capital goods, VAT business, VAT included 34,776
Capital goods, Non-VAT business 27,500
Capital goods, for use in both business, VAT included 56,000
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Rent of store space, VAT business, VAT included 14,560

Rent of warehouse, VAT & Non-VAT business, VAT excluded 6,200
Freight of goods, VAT & Non-VAT business, VAT included 2,576
Telephone and broadband bills, VAT and Non-VAT, VAT included 1,624
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The input tax on Business 1 is _.

A. 18,875
B. 23,267
C. 23,747
D. 27,781

58. All persons subject to internal revenue tax shall, at the point of each sale, transfer of merchandise or for
services rendered issue duly registered receipts or sale or commercial invoice if the amount involved is at
least
A. 25
B. 50
 C. 100
D. 125

59. A residential condominium unit in Makati was sold on March 20, 2022 in a pacto de retro sale for P2,100,000.
Market value in the tax declaration is P2,155,600 while the zonal value is P1,890,200. The documentary
stamp tax due is _.
A. 32,325
B. 32,334
C. 32,340
D. None

60. Don donated a parcel of land to the government for exclusively public use. Market value per tax declaration
is P1 million while the zonal value is P800,000. The documentary stamp tax is _.

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A. 15,000
B. 12,000
C. 45,000

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D. None

61. Exempt from excise tax:

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A. Hybrid vehicles
B. Purely electric vehicles
C. BMW
D. Toyota Innova
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62. To improve her body shape. Miss Annie decided to undergo liposuction procedure and sought the services
of Pampaganda Cosmetics , a clinic operated outside a hospital and owned and operated by Ganda Medical
PA
Group Inc. Dra, Ganda charged Miss Annie an amount of P50,000 (inclusive of 12% VAT, but exclusive of
5% excise tax) for the service rendered Based on the foregoing, the total amount to be collected from Miss
Annie is _.
A. 46,875
B. 50,000
C

C. 50,268
D. 52,500

63. Based on the foregoing, how much is the VAT to be recognized by Pampaganda?
EO

A. 5,357
B. 5,625
C. 6,000
D. 6,300

64. A parcel of land located in a province was assessed as commercial with a fair market value of P4,000,000.
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How much would be the highest possible amount of annual basic real property tax that can be collected from
the owner?
A. 8,000
B. 16,000
C. 20,000
D. 40,000

65. A registered BMBE shall be entitled to the following incentives and benefits, except _.
A. Zero-rated value-added tax
B. Income tax exemption
 C. Exemption from the coverage of the Minimum Wage Law.
D. Priority to a special credit window set up specifically for the financing requirements of BMBES

66. To be entitled to registration under the Investment Priorities Plan, an applicant must satisfy the Board of
Investments that the applicant is, except _.
A. Filipino citizen
B. It if is a partnership or association, that it is organized under the laws of the Philippines and that at least
60% of its capital is owned or controlled by Filipinos.
C. If it is a corporation, it is organized under Philippine laws and that at least sixty 60% of the capital stock
outstanding and entitled to vote is owned and held by Philippine nationals, and at least 60% of the
members of the Board of Directors are citizens of the Philippines.
D. If it is a corporation, it is organized under Philippine laws and that at least 60% of the authorized capital
stock is owned and held by Philippine nationals.

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67. The following are Board of Investments' preferred areas of investment, except _.
A. foreign employment

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B. agriculture
C. business process outsourcing
D. shipbuilding

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68. Special Corporate Income Tax is _.
A. 5% of gross income earned effective July 1, 2020, in lieu of all national and local taxes
B. 5% of taxable income effective July 1, 2020, in lieu of all national and local taxes
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C. 5% of taxable income effective April 11, 2020, in lieu of all national and local taxes
D. 5% of gross income earned effective January 1, 2021, in lieu of all national and local taxes
PA
69. The following types of tax incentives, except one, may be granted to domestic market enterprises.
A. Enhanced Deductions
B. Income Tax Holiday
C. Special Corporate Income Tax
D. Importation of Covid-19 vaccines
C

70. Showie Tym Company, a domestic market enterprise located in a metropolitan area, is engaged in
generation of new knowledge and intellectual property registered in the Philippines (Tier 3). It has been
granted tax incentives by the Fiscal Incentives Review Board.
EO

Assuming the company is no longer on an ITH, the income tax rate on the income of Showie Tym Company
is _.
A. 5%
B. 10%
C. 20%
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D. 25%

INCOME TAX TABLE FOR INDIVIDUALS (2018-2022)