Tax1 4compi

GENERAL PRINCIPLES OF TAXATION Dela Cruz/De Vera/Lopez/Llamado
1.The principal purpose of taxation is

a. To encourage the growth of home industries
through the power of tax exemptions and tax
incentives.
b. To implement the police power of the state
c. The reduce excessive inequalities of wealth
d. To raise revenues for governmental needs
2. The aspects of taxation are

a. Legislative in character
b. Executive in character
c. Shared by the legislative and executive departments
d. Judicial in character
3. Taxation as distinguished from police power and power of eminent domain

a. Property is taken to promote the general welfare
b. May be exercised only by the government
c. Operates upon the whole citizenry
d. There is generally no limit as to the amount that may be imposed
4. Which of the inherent powers may be exercised even by public service corporations
and public entities
a. Power of taxation c. Power of eminent domain
b. Police power d. A and C
5. Which of the following statements is correct?

a. Income tax is an indirect tax.
b. Our National Internal Revenue Laws are criminal in nature.
c. The theory of taxation states that the power of taxation is supreme, plenary,
unlimited, and comprehensive.
d. Taxation is subject to inherent and constitutional limitations.
6. This is an inherent limitation on the power of taxation

a. Rule on uniformity and equity in taxation
b. Due process of law and equal protection of the laws
c. Non-impairment of the jurisdiction of the Supreme Court in tax cases
d. Tax must be for public purpose
7. This is a constitutional limitation on the power of taxation

a. Tax laws must be applied within the territorial jurisdiction of the state
b. Exemption of government agencies and instrumentalities from taxation
c. No appropriation of public money for religious purposes
d. Power to tax cannot be delegated to private persons or entities
8. The power to acquire private property upon payment of just compensation for public
purpose
a. Power of taxation c. Power of eminent domain
b. Police power d. Power of love
9. The power to regulate liberty and property to promote the general welfare
a. Police power c. Power of eminent domain
b. Power of taxation d. Super power rangers
Tax R7-01
10. The tax imposed should be proportionate to the taxpayer's ability to pay
a. Fiscal adequacy c. Administrative feasibility
b. Equality or theoretical justice d. Economic consistency
11. The sources of revenue as a whole, should be sufficient to

meet the demands of public expenditures -
b. Equality or theoretical justice d. Revenue generation
12. The tax laws must be capable of convenient, just and effective administration
b. Equality or theoretical justiced. Psychological compatibility
13. Statement 1 — The point on which a tax is originally imposed is

impact of taxation Statement 2 — Police power is superior to the non-
impairment clause of the constitution Statement 3 — As a rule, taxes
are subject to set-off or compensation
Statement 4 — Asa rule, provisions on the validity of tax exemptions are
resolved liberally in favor of the taxpayer
Statement Statement 2 Statement 3 Statement
a. 4
True False False False
b. True Tru False True
e
c. True True False False
d. False True False False
14. Enforced proportional contributions from persons and property levied by the
state by virtue of its sovereignty for the support of the government and for
all public needs
a. Toll c. Taxes
b. License fee d. Assessment
15. Persons or things belonging to the same class shall be taxed at the same rate
a. Simplicity in taxation c. Equality in taxation
b. Reciprocity in taxation d. Uniformity in taxation
16. Which is not an essential characteristic of a tax?

a. It is unlimited as to amount c. It is proportionate in character
b. It is payable in money d. It is an enforced contribution
17. Special assessment is an enforced proportional contribution from owners of land

especially benefited by the public improvement. Which one of the following is
not considered as one of its characteristics?
a. It is levied on land
b. It is based on the government's need of money to support its legitimate
objectives
c. It is not a personal liability of the persons assessed
d. It is based solely on the benefit derived by the owners of the land
18. It is the privilege of not being imposed a financial obligation to which others
are subject
a. Tax incentive c. Tax amnesty
b. Tax exemption d. Tax credit
19. As to scope of the legislative power to tax, which is not correct?
a. Where there are no constitutional restrictions, and provided the subjects
are within the territorial jurisdiction of the state, Congress has unlimited
discretion as to the persons, property or occupations to be taxed.
b. In the absence of any constitutional prohibition, the House of Representatives
has the right to levy a tax of any amount it sees fit.
Tax 87-01
c. The discretion of Congress in imposing taxes extends to the mode,
method or kind of tax, if not restricted by the constitution.
d. T he s o l e arbiter o f t h e Purpose for which taxes shall be levied is the
Commissioner of Internal Revenue Internal Revenue (CIR), provided the purpose
is public. However, the courts may review the levy of the tax to determine
whether or not the purpose is public.
20. Which of the following is a nature of taxation?
a. The power is exercised by legislative action c. It is generally payable in
money
b. It is essentially an administrative function d. The state can exist without it
21. The use of illegal or fraudulent means t o avoid or defeat the payment of tax
a. S h i f t i n g c. Avoidance
b. E x e m p t i o n * d. Evasion
22. The use of legal or permissible means to minimize or avoid taxes

a. Shifting c. Avoidance
b. E x e m p t i o n d. Evasion
23. Synonymous to tax evasion

a. T a x d o d g i n g c. Tax exemption
b. T a x t n i n i m i z a t i o n d. Tax shield
24. Synonymous to tax avoidance

a. T a x d o d g i n g c. Tax exemption
b. T a x m i n i m i z a t i o n d. Tax evasion
25. In case of doubt, tax statutes are construed

a. Str ic tly' a ga inst the gover nme nt and the taxpaye r
b. L iber a lly in fa vor of the gove rnme nt a nd the ta xpayer
c. Strictly against the government and liberally in favor of the taxpayer
d. Liberally in favor of the government and strictly against the taxpayer
26. In case of doubt, tax exemptions are construed

a. Strictly against the government and the taxpayer
b. Liberally in favor of the government and the taxpayer
c. Strictly against the government and liberally in favor of the taxpayer
d. Liberally in favor of the government and strictly against the taxpayer
27. In case of conflict between the Tax Code and the Philippine Accounting
Standards (PAS)
a. P A S s ha l l pr e v a i l o ve r t he T a x Co de
b. Tax Code shall prevail over MS
c. PAS and Tax Code shall be both disregarded
d. The ta xpa ye r ma y c hoose be twee n the MS or the Ta x Code
28. Tax of a fixed amount imposed upon all persons residing within a specified
territory without regard to their property, income, or occupation they
may be engaged in
a. Personal, poll or capitation c. Excise
b. P r o p e r t y d. Regressive
Tax 87-01
29.Tax imposed on personal or real property in proportion to its value or on
some other reasonable method of apportionment
b. Property d. Regressive
30. Tax imposed upon the performance of an act, the enjoyment of
privilege or the engaging in an occupation.
b. P r o p e r t y d. Progressive
Tax 87-01
31. Tax which is demanded from the person whom the law intends
or desires to pay it
a. Direct b. Indirect c. Excise d. Income
32. Tax which is demanded from one person in the expectation and
intention that he shall indemnify himself at the expense of another
a. Direct b. Indirect c. Propertyd. Income
33. Tax which imposes a specific sum by the head or number or by some
standard of weight or measurement and which requires no
assessment other than a listing or classification of the
objects to be taxed
a. Specific b. Ad-valorem c. Excise d. Income
34. Tax of a fixed proportion of the amount or value of the property with
respect to which the tax is assessed
a. Specific c. Excise
b. Ad-valorem d. Percentage
35. Tax based on a fixed percentage of the amount of property, income or

other basis to be taxed
a. Proportional c. Regressive
b. Progressive d. Indirect
36. Tax where the rate decreases as the tax base increases
a. Proportional b. Progressive c. Regressive d.
Indirect
37. Tax where the rate increases as the tax base increases
a. Proportional b. Progressive c. Regressive d.
Indirect
38. Which of the following statements is not correct?
a. Tax burdens shall neither be imposed nor presumed to be imposed
beyond what the statute expressly and clearly states because tax
statutes should be construed strictly against the government.
b. Tax exemptions, tax amnesty, tax condonations and their equivalent
provisions are not presumed and, when granted, are strictly
construed against the taxpayer because such provisions are highly
disfavored by the government.
c. Exemptions from taxation arc highly disfavored in law and he who
claims tax exemption must be able to justify his claim or right.
d. The Bureau of Internal Revenue has the duty and the exclusive
power of enacting, implementing and interpreting tax laws.
39. The strongest of all inherent powers of the state because without it, the
government can neither survive nor dispense any of its other powers
and functions effectively.
a. Police Power c. Power of Taxation
b. Power of Eminent Domain d. Power of Greystone
40. This power is superior to the non-impairment clause and is broader in

application because it is the power to make and implement the laws.
a. Power of Taxation c. Power of Eminent Domain
b. Power of Recall d. Police Power

a. An inherent limitation of taxation may be disregarded by the
application of a constitutional limitation.
b. Income tax liabilities shall be paid by the inhabitants even if foreign
invaders occupy our country.
c. Taxes may be imposed retroactively by law, but unless so expressed
by such law, these taxes must only be imposed prospectively.
d. Tax laws are either political or penal in nature.
42. Which of the following is not a
constitutional limitation on the Power of
Taxation?
a. No person shall be deprived of life,
liberty or property without due process of
law.
b. No person shall be denied the equal
protection of the law.
c. No person shall be imprisoned for debt
or non-payment of tax.
d. No law granting any tax exemption
shall be passed without the concurrence of
a majority of all the members of Congress.
43. The distinction of a tax from permit or
license fee is that a tax is:
a. Imposed for regulation.
b. One which involves an exercise of
police power.
c. One in which there is generally no limit
on the amount that may be imposed.
d. Limited to the cost of regulation.
44. Police power as distinguished from the
power of eminent domain:
a. Just compensation is received by the
owner of the property.
b. May be exercised by private
individuals.
c.May regulate both liberty and property
d. Property is taken by the government for
public purpose.
45. A tax wherein both the impact of or the

liability for the payment of the tax as well as
the burden of the tax falls on the same
person.
a. Direct tax b. VAT c. indirect
tax d. Percentage tax
46. Which one of the following is not a

characteristic or element of a tax?
a. It is an enforced contribution.
b. It is legislative in character.
c. It is based on the ability to pay.
d. It is payable in money or in kind.
47. Tax as distinguished from license fees:

a. Limited to cover cost of regulation.
b. A regulatory measure.
c. Non-payment does not necessarily
render the business illegal
d. Imposed in the exercise of police power
48. The power to impose taxes is exercised

by the
a.President b.
Supreme Court
c. BIR d.
Congress
49. One of the

characteristics of internal
revenue laws is that they
are:
a. Criminal in
nature c. Political in
nature
b. Penal in nature
d. Generally. prospective in d.
application Incom
e tax
50. Which of the following is

not an example of excise
tax:
a. Transfer tax; b.
Sales tax c. Real property
tax
51. The following are similarities of the

inherent power of taxation, eminent
domain, and police power, except one:
a. Arc necessary attributes of
sovereignty;
b. Superior to the non-impairment clause
of the constitution
c. Compensation/benefit is received;
d. Are legislative in character.
Tax 87-01
CPA REVIEW SCHOOL OF THE PHILIPPINES
FOR PSBA INTEGRATED REVIEW
INDIVIDUAL TAXPAYER
1. Annakin, a French citizen permanently residing in the Philippines, received several items
during the taxable year. Which among the following is NOT subject to Philippine income
taxation?
a. Consultancy fees received for designing a computer program and installing
the same in the Shanghai facility of a Chinese firm.
b. Interest from his deposits in a local bank of foreign currency earned abroad
converted to Philippine pesos.
c. 60% of the dividends received from an American corporation which derived 60%
of its annual gross receipts from the Philippine sources for the past 3 years.
d. Gains derived from the sale of his condominium unit located in The Fort, Taguig
City to another resident alien
2. Noah Reed, a Canadian, arrived in the Philippines on January 1, 2018 and continued to
live and engage in business in the Philippines. He went on a tour of India and Pakistan
from April 1 to November 5, 2018. He returned to the Philippines on November 6, 2018
and stayed until April 15, 2019 when he returned to Quebec, Canada. From his
investments in the Philippines, he earned a gross income of P2.5 million. For the year
2018, Noah's taxable status is that of
a. A non-resident alien not engaged in trade or business in the Philippines.
b. A non-resident alien engaged in trade or business in the Philippines.
c. A resident alien not engaged in trade or business in the Philippines
d. A resident alien engaged in trade or business in the Philippines.
3. Which of the following is not correct? A non-resident citizen means, a citizen of the
Philippines
a. Who establishes to the satisfaction of the Commissioner the fact of his physical
presence abroad with a definite intention to reside therein.
b. Who leaves the Philippines during the taxable year to reside abroad, either as an
immigrant or for employment on a permanent basis.
c. Who works and derives income from abroad and whose employment thereat
requires him to be physically present abroad most of the time during the taxable
year.
d. Who has been previously considered a non-resident citizen and who arrives in the
Philippines at any time during the taxable year to reside permanently in the
Philippines and who is treated as a non-resident citizen with respect to his income
derived from sources abroad for the entire taxable year.

a. An individual citizen of the Philippines who is working and deriving income from
abroad as an overseas contract worker is taxable only on income from sources
within the Philippines.
b. 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 engaged
exclusively in international trade shall be treated as a non-resident citizen.
c. A non-resident citizen who is not engaged in business in the Philippines is treated
as a non- resident alien who is not engaged in business in the Philippines.
d. An alien individual, whether a resident or not of the Philippines, is taxable only
on income derived from sources within the Philippines.
5. A citizen of the Philippines who works and derives income from abroad is a resident
citizen if he stayed outside the Philippines
a. For less than 180 days c. For 183 days or more
b. For more than 180 days d. For less than 183 days
6. A citizen of a foreign country 1s considered a non-resident alien engaged in
business
Philippines if he stayed inside the Philippines
a. For 183 days or more
b. For less than 183 days
c. For more than 180 days
d. For less than 180 days
7. A resident citizen is taxable on all income derived from sources

a. Within the Philippines only
b. Without the Philippines only
c. Partly within and partly without
d. Within and without the Philippines
8. A non-resident citizen (NRC), resident alien (RA), and non-resident alien (NRA) are
taxable on all income derived from sources
a. Within the Philippines
b. Without the Philippines
c. Partly within and partly without
d. Within and without the Philippines
9. A citizen of the Philippines who works abroad and whose employment requires him to be
physically present abroad most of the time during the taxable year is
a. Taxable on income within and without the Philippines
b. Taxable income from without the Philippines
c. Exempt from the income tax
d. Taxable on income from within the Philippines.
10. A non-resident alien is deemed doing business in the Philippines if he

a. Is an individual whose residence is within the Philippines.
b. Is an individual whose father or mother is an alien who is engaged in business in
the Philippines.
c. Is an individual who is naturalized in accordance with law.
d. Shall come to the Philippines and stay therein for an aggregate period of more than
180 days during a calendar year.
11. In his first year of business, Manny Durugas did not derive any income nor any gain as he
had not yet started operations of his on-line store. However, he was assessed a deficiency
tax by the BIR. The BIR found that he overstated its pre-operating expenses, some of
which were unsubstantiated. Should such disallowed expenses give rise to income tax?
a. Yes, he should not have overstated his expenses in the first place increasing his
deductions in the process.
b. No. In order for income tax to be imposed, 3 elements should be present: (1) there
must be gain or profit; (2) the gain or profit is realized or received, actually or
constructively; and (3) such gain or profit is not exempted by law or treaty from
income tax. In this case, no income tax shall be imposed in the absence of the first
2 elements above.
c. All of the above.
d. None of the above.
12. In 2018, Nelia Gomez, an MWE, received from her employer an annual minimum wage
salary of P99,702. Aside from this, she also received P8,000 for holiday pay, overtime
pay, and night shift differential pay. Furthermore, she received P8,303 as her 13 month
pay. What amounts shall she be taxable on?
a. P8,000.
b. P107,702.
c. P8,303.
d. None
13. Nelia in the immediately preceding number was promoted in June 2018, and starting the
same month was given a raise in salary which was more than the statutory minimum
wage. Will her entire compensation during 2018 be taxable and subject to withholding
tax?
a. Yes. Her entire earnings shall be taxable.
b. No. Her entire earnings shall not be taxable
c. Only her earnings from June 2018 to December 2018 shall be taxable and subject
to withholding tax
d. None of the above
14. Virginia Pecson is an MWE working in Quezon City. As such, her employer did
not withhold any tax from her compensation. In addition to her Statutory Minimum
Wage (SMW), she also camed a one- time commission from her employer in September
of the taxable year 2018.
In what months of the taxable year shall her employer withhold income tax from her
SMW?
a. When she received the commission in September, she ceased to be an MWE. Her
employer shall withhold income taxes from her compensation (which includes the
SMW) received in the months of September thru December 2018,
b. None. Her employer may not withhold income taxes from the SMW she received
in all the 12 months of 2018. Her employer shall withhold the CWT only from the
commission she received in September 2018
c. In all the months of 2018
15. Mario is a minimum wage earner C-MWE") employed in a fast food restaurant in Metro
Manila. Aside from this, he also earns income from the operation of a small "barbeque
stand" in front of his house. What should be included in his taxable income for the year?
a. His taxable income shall include his entire salary earned from the fast food
restaurant, and the income from his barbeque stand.
b. His taxable income shall include only his income from the barbeque stand. As far
as his minimum wage is concerned, Mario is still an MWE who is entitled to
exemption as such
c. Both his minimum wages and his income from his business shall be exempt from
tax.
16. Angelo Bato is an MWE employed with the Philippine National Police. He was assigned
in the National Capital Region from January 1, 2018 to April 30, 2018, earning the SMW
of P492 per day. Beginning May 1, 2018, he was transferred to PNP-Region V, receiving
the same rate of P492 per day. The SMW in Region V for the period May 2018
to December 2018 was just P450 per day.
Should PNP-Region V withhold tax from the salary of Angelo?
a. I don't know.
b. No. He is considered an MWE for the entire year.
c. Yes. His daily wage rate is above the prevailing SMW in Region V which makes it
taxable and subject to withholding.
17. Mr. Gigolo (resident citizen) appoints the Trust Department of Tyra Bank to manage his
money pursuant to a trust agreement. The Trust Department proceeds to invest the money
in a 5-year corporate bond.
lf Mr. Gigolo withdraws his money from the trust account after 8 years, the interest
income from the corporate bond is:
a. Exempt from income tax s
b. Subject to the 20% final tax
c. All of the above
18. If instead, the bank in the immediately preceding number, in the name of Mr.
Gigolo, invests the money in a 20-year long-term investment certificate issued by Bank of
Ruptcy, will the interest income therefrom be exempt from income tax?
a. Yes, regardless of the holding periods of Mr. Gigolo and the trust.
b. Yes, provided the holding period of Mr. Gigolo and the holding period of the trust
in the LT investment certificate are both at least 5 years.
c. All of the above.
19. Kaino sold his principal residence located in Manila on January 5, 2018 for P8,000,000.
The property was purchased in 2005 for P3,000,000. The current market value of
the property at the time of sale was:
BIR Commissioner's zonal valuation - P 9,000,000

City Assessor's schędule of values - 6,000,000
What is the capital gains tax on the sale?

a. P300,000
b. P360,000
c. P480,000
d. P540,000
20. If Kaino in the preceding number, within 6 months after the sale, purchases
another residence for P8,000,000, what will be the capital gains tax on the sale and what
would be the cost (basis) of the new residence for income tax purposes?
a. P540,000; P8,000,000
b. P 0; P6,000,000
c. P540,000; P9,000,000
d. PO; P3,000,000
21. Suppose Kaino in number 19, within the 18-month reglementary period, instead
purchases a new principal residence at a cost of Pl0,000,000. What will be the capital
gains tax on the sale and what would be the cost (adjusted basis) of the new residence for
income tax purposes?
a. P0; P3,000,000
b. P0; P10,000,000
c. P0; P9,000,000
d. P0; P5,000, 000
22. Suppose Kaino in number 19, within the 18-month reglementary period instead purchases
a new residence at a cost of P5,000,000. What will be the capital gains tax on the sale?
a. P202,500
b. P300,000
c. P480,000
d. P337,500
23. In number 22, what would be the cost (adjusted basis) of the new residence for income
tax purposes?
a. P3,000.000
b. P1,875,000
c. P0
d. P5,000,000
24. Alma sold her principal residence to Bobby as evidenced by a notarized Deed of
Absolute Sale executed on September 10, 2019, Alma also acquired a new principal
residence from Carlo which was evidenced by another notarized Deed of Sale executed
on September 9, 2019. Is the sale of Alma's principal residence exempt from the 6%
capital gains tax
a. Yes. Alma bought a new principal residence even before selling her old principal
residence.
b. Yes. Alma utilized the proceeds from the sale of her old principal residence in
buying a new principal residence within 18 months from the sale of her old
residence.
c. No. The sale of the old principal residence must precede the acquisition of the
new principal residence
25. Upon retirement, Kaitlynn Gabriel planned to sell a parcel of idle land (capital asset) in
Calamba, Laguna which she inherited from her father 20 years ago. Before selling, she
hired a professional appraiser who estimated the value of her land at P3.0 M. She
consulted with her bank which told her that the "mortgage value of the land is P3.5 M.
She eventually sold the parcel of idle land to her friend for P2.4 M. The zonal value at the
time of sale was P2.6 M, and the assessor's value was P2.7 M. What is the capital gains
tax ("CGT") on the sale?
a. 6% of P3.0 M c.6% of P2.4 M
b. 6% of P3.5 M d. None of the above.
26. The following are taxed at a final rate of 20% except:
a. Cash or property dividend payment by a domestic corporation to a NRAETB.
b. Share of a NRAETB in the distributable after-tax net income of a business
partnership where he is a partner, or share in the after-tax net income of
an association or joint venture taxable as a corporation of which he is a member.
c. Royalty payments (except royalties on books, literary works and
musical compositions) to citizens, RAs, and NRAETB, and prizes exceeding
P10,000 paid to the same persons
d. Interest and other payments upon tax-free covenant bonds, mortgages, deeds
of trust, or other obligations under Section 57(C) of the Tax Code.
27. A Corporation declared and distributed to its stockholder shares of B Corporation. One of
its stockholders, W, received 100 shares of B Corporation shares as dividends. At the
date of dividend declaration, the fair market value of B Corporation shares was P120 per
share and by the time received the dividend, the fair market value per share was P180.
Which of the following is correct? The dividend is
a. A stock dividend, hence exempt from tax
b. A property dividend, hence part of taxable income of W
c. A property dividend, hence subject to final tax based on its fair market value of
P120 per share at the time of declaration.
d. A property dividend, hence subject to final tax based on its fair market value of
P180 per share
28. All of the following statements are correct, except one. Which is the exception?
a. The source of interest income is the country where the debtor resides.
b. The source of dividend income is the country where the corporation was
incorporated.
c. Rents are considered derived from the country where the property is located
d. Income from personal services is considered derived from the country where the
services were rendered.
29. Statement 1 - A gain from sale of shares of a domestic corporation shall be considered
derived from the Philippines regardless of where the shares were sold.
Statement 2- A gain from sale of shares of a foreign corporation shall be considered
derived from the country where the corporation was created or organized.
a. True, True c. False, True
b. True, False d. False, False.
30-34. Allan Reyes, married, VAT-registered, had the following data for the taxable year:
Gross sales, Phils. P2,000,000

Cost of sales, Phils. 1,600,000
Gross sales, USA 1,500,000

Cost of sales, USA 1,200,000
Operating expenses, Phils. 10,000

Operating expenses, USA 35,000
30. (a) If the taxpayer is a resident citizen, his tax due is:
a. P93,750
b. P158,600
c. P81,250
(b) If the taxpayer is a resident citizen, not VAT-registered, can he avail of the 8% income
tax rate on gross sales plus non-operating income? NO
31. If the taxpayer is a non-resident citizen, VAT-registered, his tax due is:
a. P15,000
b. P77,000
c. P28,000
32. If the taxpayer is a resident alien, VAT-registered, his tax due is:
a. P14,000
b. P77,000
c. P28,000
33. (a) If the taxpayer is a non-resident alien engaged in business in the Philippines, married,
VAT- registered and his country allows reciprocity of P30,000 as personal exemption for
married individuals, his tax due is:
a. P22,000
b. P28,000
c. P83,000
(b) If the taxpayer in numbers 31, 32, and 33(A) was not VAT-registered, can he avail of
the 8% income tax rate option? YES
34. If the taxpayer is a non-resident alien not engaged in business in the Philippines, married,
and his country grants P35,000 as personal exemption for married individuals, his tax due
is:
a. P100,000
b. P93,750
c. P400,000
35. Sally Rafa, an MWE, works for McDonny's, Inc. She has no other source of income. For
the taxable year, her total regular compensation income, inclusive of the 13th month pay,
amounted to P180.000 During the year, she received a 13th month pay equivalent to
P10,000, and contributed to SSS, Philhealth, and Pag-ibig a total amount of P3,000.
In addition to the abovementioned amounts, she received the following amounts: P90,000
for overtime pay, P10,000 for night shift differential pay, P25,000 for hazard pay, and
P35,000 for holiday pay. The tax due from her compensation income is:
a. P10,000
b. P13,200
c. P14,200
36-39) Taxpayer earning income purely from self-employment/practice of profession.
36. Elena Putito, a part-time exercise trainer, also operates a shoe store while offering
her services to clients living in Metro Manila. In 2018, the gross sales of her shoe
store amounted to P1,100,000 while her receipts from her training services
amounted to P400.000. Her total cost of sales and operating expenses amounted to
P150,000 and P35,000, respectively.
She signified in her 1" Quarterly ITR her intention to be taxed at the 8% income tax rate.
Compute her income tax due for 2018.
a. P100,000
b. P120,000
c. P 68,000
37. If Elena Putito, in number 36, failed to signify her intention to be taxed at the 8% income
tax rate, what will be her income tax due in 2018?
a. P566,879
b. P369,800
c. P284,500
Rules for Filling the 3 Quarterly ITR of Individual Taxpayers:
1.) Cumulative Filing.
2.) Compensation income from being an employee is included only in

the Annual ITR. Business income, gain from sale of ordinary
assets, net capital gains from sale of “other capital assets”, and other
taxable income not subject to FT, Shall be included in all 3 quarterly
ITRs and in the annual ITR.
3.) An individual taxpayer shall be filling on a calendar year basis. The
deadlines for filing the ITRs are as follows:
1st Quarter May 15 of the Current Taxable Year

2nd Quarter August 15 of the Current Taxable Year
3rd Quarter November 15 of the Current Taxable Year
Annual ITR April 15 of the Next Year
38. Amyjo Perez owns a pet store specializing in reptiles which is her only source of income.
She signified her intention to be taxed at 8% of gross sales in her 1 st quarter ITR of the
taxable year. Her sales, cost of sales, and operating expense for the 4 quarters are
as follows:
1st Quarter 2nd Quarter 3rd Quarter 4th Quarter

Sales 400,000 600,000 2,000,000 3,500,000
Cost of Sales (100,000) (200,000) (600,000) (800,000)
Gross Income 300,000 400,000 1,400,000 2,700,000
Operating expenses (170,000) (190,000) (500,000) 820,000
Net Income 130,000 210,000 900,000 1,880,000
Compute her income tax payable in her 1st, 2nd , 3rd Quarterly ITRs and in
her
Annual ITR
1st Quarter ITR 2nd Quarter ITR 3rd Quarter ITR Annual
ITR a) P12,000 P48,000 P160,000
P628,400 b) 12,000 48,000 150,000
638,400 c) 12,000 60,000 78,000
638,560 d) None of the above
39. Mr. Rolly Gomez operates a small night club in which he employs dancers to dance with
the patrons of his night club. In 2018, his gross receipts, cost of services, and operating
expenses amounted P2,800,000, P100,000, and P35,000, respectively. The night club also
earned other non-operating income of P150,000 in 2018.
Can he avail of the 8% income tax rate option? What is his income tax due for 2018?
a. Yes, because his gross receipts plus non-operating income do not
exceed
P3,000,000; Tax due is P216,000 under the 8% tax regime.
b. No, because his business is subject to the 18% OPT under Section 125 and not to
the 3% OPT under Section 116. Tax due is P750,800 under the graduated rates.34
c. Yes and No. He can avail of the 8% income tax rate option if he chooses this in
his
Quarterly ITR. Otherwise, he will be taxed under the graduated rates.
40-43. Taxpayer earning income from Employment and from Self-Employment (business
or practice of profession) – Mixed Income Earner
40. In 2018. Maginoo M. Henyo, the CEO of the Philippine Nuclear Fusion
Corporation, earned compensation income of P4,000.500. This amount is inclusive of his
13month pay and other benefits of P250,000, but net of the mandatory contributions
to SSS and Philhealth.
Aside from his employment, he also owns a cafeteria. In 2018, the cafeteria had gross
sales of profession P1,500,000, cost of sales of P500,000, and operating expenses of
P300,000. It also had non-operating income of P700,000
Compute his income tax due for 2018 if he avails of the 8% income tax rate option on his
gross sales plus non-operating income arising from his cafeteria business.
a. P1,101,360
b. P1,277,360
c. P1,257,360
41. In the previous number, what would be Maginoo's total income tax due if he did not avail
of the 8% income tax rate on gross sales plus non-operating income arising from
his business?
a. P 696.969
b. P1,650,920
c. P1,349.360
42. Maginoo in number 40 resigned from Philippine Nuclear Fusion in the first week
of
January 2019 to concentrate in his cafeteria business. His total compensation income in
2019 amounted to P180,000 inclusive of other benefits (productivity bonus) of P30,000.
In 2019, the bakery had gross sales of P2,300,000, cost of sales of P750,000, and
operating expenses of P450,000. It also had non-operating income of P235,000.
What is his income tax due for 2019 if he avails of the 8% income tax rate option on his
gross sales plus non-operating income arising from his business?
a. P 202.800
b. P194,800
c. P182,800
43. Pong Pagong is the CEO of Sesame Zoo Corpora tion. In 2018, he received total
compensation of P10,000,000 inclusive of 13th month pay and other benefits in the
amount of P800,000.
He also owns a poultry farm which supplies the wet market in his province. Its gross
sales total P5,000,000. The farm's cost of sales and operating expenses amounted
P2,300,000 and P580,000, respectively. Its non-operating income amounted to P230,000.
Compute his income tax due in 2018.

a. P3,910,000
b. P3,874.760
c. P3,901,000
44. Sally, the MWE in number 12, also has a small business with the following data sales of
P500,000, cost of goods sold of P100.000, operating expenses of P60.000, and
non- operating income of P10,000. What would be the income tax due under the
graduated rates, and under the 8% income tax rate 10 option?
a. P23,600; P54,564
b. P18.000; P42,350
c. P20,000; P40.800
Withholding
45. First Statement: All income payments which are required to be subjected to
withholding tax shall be subject to the corresponding withholding tax rate to be withheld
by the person having control over the payment and who, at the same time claims the
expenses.
Second Statement: The obligation to withhold is imposed upon the buyer-payor
of income although the burden of tax is really upon the seller-income earner.
Hence, unjustifiable refusal of the latter to be subjected to withholding shall be a ground
for the mandatory audit of all internal revenue tax liabilities, as well as the imposition of
penalties under the Tax Code, upon verified complaint of the buyer-payor.
a. True. True c. False, True
b. True, False d. False, False
46. First Statement: All income payments received by a Minimum Wage Earner (MWE) are
exempt from withholding.
Second Statement: An individual payee shall not be subjected to withholding if the total
of the income payments he receives is not more than P250,000.
a. True, True
b. False. True
c. True, False
d. False, False
47. Statement 1: If the tax has actually been withheld at source, a credit or a refund shall be
made to the recipient of the income (e.g., the employee) even though such withheld tax
has not been paid to the government by the employer.
Statement 2: Any income subject to income tax may be subject to withholding tax.
However, income exempt from income tax is consequently exempt from withholding tax.
Further, income not subject to withholding tax does not necessarily mean that it is not
subject to income tax
a. True, True
b. False, True
c. True, False
d. False, False
Illustration of Computations in Quarterly ITRs:

48. For taxable year 2019, Chris, single, Filipino with 1 dependent child, received the
following professional fees as an Independent consultant to Acne Philippines
Corporation.
Monthly Fees Less 5% CWT =Net Monthly Fees Received
P250,000 P12,500 =P237,500
His only business expense consist of rental expenses which amounted to the following:
Monthly Rental Fees Less 1% CWT Monthly Rental Expense

P50,000 P500 P49,500
He is not VAT-registered and instead paid 3%OPT on his gross receipts under Section
116 of the Tax Code.
Aside from his CPA/ consultancy business, he is a faculty member of Belt University
from which he received the following employment income for the same year:
Gross pay Less CWT Less SSS Premiums Net Pay

and union dues
Belt University P900,000 P75,000 P5,600 P819,400
The amount he received from Belt University is inclusive of 13th month pay and other
benefits of P65,000.
During the year he also received P3,000 interest income from his BPI deposit, and
P250,000 in royalties from the publication of his book entitled “The Hungry Eyes”
He has excess tax credits from the prior year of P15,000

(a) Calculate his tax payable in the Quarterly and Annual ITRs if he does not avail of the
8% income tax option, and itemize deduction. (See BIR Forms Nos. 1701Q and
1701).
1st Quarterly ITR 2nd Quarterly ITR 3rd Quarterly ITR Annual
ITR a) P27,000 P132,500 P142,500
P340,908 b) (P10,500) P59,000 P28,000
P186,408 c) P10,500 P80,000 P7,500
P63,817
d) None of the above
(b) Calculate his tax payable in the Quarterly and Annual ITRs if he avails of the 8%
income tax option. (See attached BIR Form Nos. 1701Q and 1701).
1st Quarterly ITR 2nd Quarterly ITR 3rd Quarterly ITR 4th Quarterly ITR
a) P7,000 P22,500 P22,500 P86,320
b) P0 P23,595 P24,343 P86,483
c) P10,434 P80,348 P7,534
P234,455 d) None of the above
49. Mr. Al Dabog elected the 8% income tax rate option in his First Quarterly ITR for
taxable year 2019. Later, a month before the due date for filing his Annual ITR for
taxable year 2019. he decided that it would be better for him to be taxed at the graduated
rates
Can he signify his decision to be taxed under the graduated rates in his Annual ITR for
2019?
a. Yes, that is his right under the Tax Code.

b. No. The election made in the First Quarterly ITR is irrevocable. No amendment of the
option would be better for him to be taxed at the graduated rates. shall be made for
taxable year 2019. Beginning 2020, he shall be automatically subjected to the
graduated rates unless he opts to avail the 8% income tax rate by signifying his
intention in his 1" Quarter Income Tax Return, or in his 1" Quarter Percentage Tax
Return
c. It depends if the first Form No. 1905 has already been processed by the BIR.
Graduated Tax Rates before January 1, 2018
On citizens, residents, non-resident aliens engaged in business in the Philippines on

compensation, business and other income
Over But not over Of Excess Over
P10,000 --------------- 5%
P10,000 30,000 P 500 + 10% P10,000
30,000 70,000 2,500 + 15% 30,000
70,000 140,000 8,500 + 20% 70,000
140,000 250,000 22.500 + 25% 140,000
250,000 500,000 50,000 + 30% 250,000
500,000 125,000 + 32% 500,000
Graduated Tax Rates: Effective January 1, 2018 to December 31, 2020:

compensation, business and other income.
Over Not Over Basic Amount Additional Rate Of Excess Over

(a) (b) (c)
- 250,000 - -
250,000 400,000 - 20% 250,000
400,000 800,000 30,000 25% 400,000
800,000 2,000,000 130,000 30% 800,000
2,000,000 8,000.000 450,000 32% 2,000,000
8,000,000 2,410,000 35% 8,000,000
Graduated Tax Rates: Effective January 1, 2023 onwards:

compensation, business and other income.
Over Not Over Basic Amount Additional Of Excess

(a) Rate Over
(b) (c)
- 250,000 - -
250,000 400,000 - 15% 250,000
400,000 800,000 22,500 20% 400,000
800,000 2,000,000 102,500 25% 800,000
2,000,000 8,000.000 402,500 30% 2,000,000
8,000,000 2,202,500 35% 8,000,000
CPA REVIEW SCHOOL OF THE PHILIPPINES
For PSBA Integrated Review
CORPORATION
1. ABC, a corporation registered in Norway, has a 50MW electric power plant in San Jose,
Batangas. Aside from ABC's income from its power plant, which among the following is
NOT considered as part of its income from sources within the Philippines?
a. Gains from the sale to an Ilocos Norte power plant of generator bought from the
United States.
b. Interests earned on its dollar deposits in a Philippine bank under the
Expanded
Foreign Currency Deposit System.
c. Gain from the sale, in London, of shares of stock and other securities of San
Miguel Corporation, a domestic corporation.
d. Royalties from the use in Brazil of generator sets designed in the Philippines by its
engineers.
2. Aplets Corporation is registered under the laws of the Virgin Islands. It has extensive
operations in Southeast Asia. In the Philippines, its products are imported and sold at a
mark-up by its exclusive distributor, Kim's Trading, Inc. The BIR compiled a record of
all the imports of Kim from Aplets and imposed a tax on Aplets's net income derived
from its exports to Kim. Is the BIR correct?
a. Yes. Aplets 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. Aplets is a non-resident foreign corporation not engaged in trade or business
in the Philippines.
d. Yes, Aplets is doing business in the Philippines through its exclusive distributor
Kim's Trading Inc.
3. ABC Inc., a corporation registered and holding office in Australia, not operating in the
Philippines, may be subject to Philippine income taxation on
a. Gains it derived from sale in Australia of an ore crusher it bought from the
Philippines with the proceeds converted to pesos.
b. Gains it derived from sale in Australia of shares of stock of Philex Mining
Corporation, a Philippine corporation.
c. Dividends earned from investment in a foreign corporation that derived 40% of its
gross income from Philippine sources.
d. Interest derived from its dollar deposits in a Philippine bank under the Expanded
Foreign Currency Deposit System
4. . A corporation organized and created under the laws of a foreign country and is
authorized to do business/trade in the Philippines is:
a. Domestic corporation
b. Resident foreign corporation
c. Government owned and controlled corporation
d. Non-profit hospital
5. A domestic corporation may employ, as a basis for filing its annual corporate income tax
return the:
a. Calendar year only c. Either calendar or fiscal year
b. Fiscal year only d. Neither calendar or fiscal year
6. A corporation files a quarterly return within
a. 30 days after the end of each of the first 3 quarters
b. 60 days after the end of each of the first 3 quarters
c. 30 days, after the end of each of the first 4 quarters
d. 60 days after the end of each of the first 4 quarters
7. A final or annual return is filed on or before the 15th day of the

a. Month following the close of the taxable year
b. 2 month following the close of the taxable year.
c. 3rd month following the close of the taxable year
d. 4th month following the close of the taxable year
8. One of the general principles of income taxation:

a. A foreign corporation engaged in business in the Philippines is taxable on
all income derived from sources within and without the Philippines.
b. A foreign corporation engaged in business in the Philippines is taxable on
all income derived from sources within the Philippines only
c. A domestic corporation is taxable on income derived from sources within the
Philippines only.
d. A domestic corporation is taxable on income derived from sources without
the
Philippines only.
9. One of the following does not fall under the definition of a "corporation" for income tax
purpose:
a. General partnership
b. Joint stock company
c. Insurance company
d. Sole proprietorship
10. Which of the following is subject to the income tax?
a. A non-stock and non-profit educational institution
b. Public educational institution
c. Civic league or organization not organized for profit and operated exclusively for
the promotion of social welfare
d. Mutual savings bank and cooperative bank having a capital stock represented by
shares organized and operated for mutual purposes and profit.
11. The Philippine Health Insurance Corporation (Philhealth), a government-owned

corporation is:
a. Exempt from the corporate income tax.
b. Subject to the preferential corporate income tax for special corporations.
c. Subject to the basic corporate income tax
d. Subject to final tax
12. Public educational institutions, like the University of the Philippines is deemed by law:
a. Subject to the preferential corporate income tax for special corporations.
b. Subject to the basic corporate income tax.
c. Subject to both the preferential income tax and the basic corporate income tax.
d. Exempt from the corporate income tax
13. Which is not correct? The following are exempt from the corporate income tax:
a. Local water districts
b. Bureau of Internal Revenue
c. Government owned or controlled corporation
d. Social Security System
14. Which of the following may be subject to the corporate income tax?
b. A public educational institution
c. A private educational institution
d. Government Service Insurance System
15. The improperly accumulated earnings tax shall apply to
a. Publicly held corporation
b. Banks and other non-bank financial intermediaries
c. Insurance companies
d. Closely held domestic corporations

a. MCIT is not applicable to resident foreign corporations.
b. The corporate quarterly return shall be filed within 60 days following the close of
each of the first three quarters of the taxable year.
c. Resident foreign corporations would be taxed on net income from within the
Philippines only.
d. Non-resident foreign corporations are taxed on gross income from within the
Philippines only.
17. The following income are subject to final tax, except

a. Royalty income received by a domestic corporation from a domestic corporation.
b. Cash dividends received by a non-resident foreign corporation from a domestic
corporation
c. Cash dividends received by a domestic corporation from a domestic corporation.
d. Interest income from a Peso deposit received by resident foreign corporation from
a Philippine bank.
e. Branch profit remitted by a branch to the head office of a resident foreign
corporation.
18. The MCIT shall not apply to the following resident foreign corporations, except
a. RFC engaged in business as international carrier subject to 2 1/2 % of their Gross
Philippine Billings
b. RFC engaged in business as Offshore Banking Units on their income from foreign
currency transactions with local commercial banks
c. RFC engaged in business as regional operating headquarters
d. RFC engaged in hotel, motel and resort operations
19. The president, upon recommendation of the Secretary of Finance, may allow corporations
the option to be taxed at 15% of gross income, after the following conditions, except one,
have been satisfied. Which is the exception?
a. A tax effort ratio of 20% of Gross National Product (GNP)
b. A ratio of 20% of income tax collection to total tax revenue
c. A vat tax effort of 4% of GNP
d. A 0.9% ratio of consolidated public sector financial position to GNP
20. Which of the following is not correct? The 15% gross income tax
a. Is optional to a qualified corporation
b. Is available if the ratio of cost of sales to gross sales or receipts from all sources
does not exceed 55%
c. Shall be irrevocable for three consecutive taxable years that the corporation
is qualified under the scheme
d. Is compared with the normal income tax and minimum corporate income tax, and
whichever is the highest shall be paid.
21. If the gross income from unrelated activity exceeds 50% of the total gross income derived
by any private educational institution, the tax rate shall be the regular 30% based on the
entire taxable income. This is known as the
a. Constructive receipt
b. Tax benefit rule
c. End trust doctrine
d. Predominance test
22. For income taxation purposes, the term “corporation" excludes one of the following:
a. Ordinary partnership
b. An incorporated business organization
c. General professional partnership
d. Business partnership
23. A domestic corporation's record show:

Quarter Excess
Withholding
Tax Prior Year
First P100,000 P80,000 P20,000 P30,000 P10,000
Second 120,000 250,000 30,000
Third 250,000 100,000 40,000
Fourth 200,000 100,000 35,000
The income tax due and income tax payable, respectively, for the first quarter are
a. P100,000; P100,000
b. P100,000; P80,000
c. P100,000; P50,000
d. P100,000; P40,000
24. The income tax due and income tax payable, respectively, for the second quarter are
a. P330,000; P 120,000
b. P330,000; P 250,000
c. P330,000; P 150,000
d. P330,000; P 230,000
25. The income tax due and income tax payable, respectively, for the third quarter are
a. P470,000; P 250,000
b. P470,000; P 100,000
c. P470,000; P 140,000
d. P470,000; P 70,000
26. The income tax due and income tax payable, respectively, for the year are
a. P670,000; P 200,000
b. P670,000; P 100,000
c. P670,000; P 135,000
d. P670,000; P 165,000
27. Using the preceding problem except that the normal income tax for the fourth quarter is
P50,000 (instead of P200,000), the income tax still due for the year is
a. P 120,000
b. P 55,000
c. P 45,000
d. P 75,000
28. CPA University, a proprietary educational institution organized in 2006, had the
following data for 2018. Tuition Fees P 850,000 Rental Income (net of 5% cwt) 142,500
School related expenses 820,000 The income tax still due for 2018 is
a. P 54,000
b. P 10,500
c. P 18.000
d. P 46,500
29. CPA College, a proprietary educational institution organized in 2006, had the following
data for 2018. P 480,000 494,000 945,000 Tuition Fees Rental Income (net of 5% cwt)
School related expenses The income tax still due for 2018 is
a. P 16,500
b. (P 9,500)
c. (P6,000)
d. P20,000
30. CPA Airlines, a resident foreign international carrier has the following records of income
for the period. (The income represents gross billings.)
a. Continuous flight from Manila to Tokyo = 1,000 tickets at P2,000 per ticket
b. Flight from Manila to Taipei; transfer flight (on CPAR Airlines) from Taipei to
Tokyo = 2,000 tickets at P2,000 per ticket
c. Continuous flight from Manila to Taipei = 3,000 tickets at P1,000 per ticket The
income tax due is
a. P225,000
b. P 125,000
c. P 100,000
d. P 175,000
31-40. The A Corporation provided the following data for the calendar year ending
December 31, 2018 (S 1 = P50)
Philippines U.S.A.
Gross Income P4,000,000 $40,000
Deductions P2,500,000 $15,000
Income Tax Paid $ 3,000
31. If it is a domestic corporation, its income tax after tax credit is
a. P 812,500
b. P 675,000
c. P 962,500
d. P 480,000
32. If it is a resident foreign corporation, its income tax is
a. P 730,000
b. P 450,000
c. P 480,000
d. P 525,000
33. If it is a non-resident foreign corporation, its income tax is

a. P730,000
b. P 1,280,000
c. P1,200,000
d. P 1,400,000
34. Under No. 31, but it opts to claim the tax paid abroad as deduction from gross income, its
income tax is
a. P910,000 c. P237,000
b. P832,000 d. P780,000
35. If it is a resident international carrier, its income tax is

a. P100,000 c. P 37,000
b. P 10,000 d. P125,000
36. If it is a non-resident cinematographic film owner/lessor, its income tax is

a. P1,000,000 c. P300,000
b. P 100,000 d. P128,000
37. If it is a non-resident lessor of vessels, its income tax is

a. P100,000 c. P300,000
b. P180,000 d. P128,000
38. If it is a non-resident lessor of aircrafts, machineries and equipment, its income tax is
a. P100,000 c. P300,000
b. P180,000 d. P128,000
39. If it is a resident foreign corporation but its expenses within and outside the Philippines is
P3m, unallocated (disregard original data on expense) its income tax is
a. P640,000
b. P700,000
c. P480,000
d. P600,000
40. If it is a resident foreign corporation and it remitted 60% of its net profit to its head office
abroad, its total income tax liability is (Original data)
a. P480,000
b. P571,800
c. P544,500
d. P612,750
41. A Corporation, a resident foreign corporation, provided the following data for taxable
year 2018:
Philippines USA
Gross Income P40M P20M
Dividend from:
Domestic corporation 4M
Foreign corporation (100%
of its business is in the Phils.) 5M
Business expenses 12M 8M
The corporation remitted to its head office the PSM dividend income and 40% of its net
profit to its head office in USA. The corporation's total tax liability including the tax on
the profit remitted is
a. P10,240,000 c. P12,960,000
b. P12,448.000 d. P10,944,000
42. A Corporation has the following data for the year 2018:
Gross Income, Philippines P1,000,000

Gross income, USA 500,000
Gross income, Japan 500,000
Expenses, Philippines 300,000
Expenses, USA 200,000
Expenses, Japan 100,000
Other Income:
Dividend from San Miguel Corp. 700,000
Dividend from Ford Motors, USA 120,000
Gain, sale of San Miguel shares directly to buyer 150,000
Royalties, Philippines 50,000
Royalties, USA 100,000
Interest income (other than from bank deposit) 60,000
Rent, land in USA 250,000
Other rental income (Phils.) 100,000
Prize, contest in Manila 200,000
Interest income (S deposit in BDO 50,000
The total tax liability as a domestic corporation is:

a. P709,000 c. P679,750
b. P692,750 d. None of the above
.
43. Based on the above problem, its total tax liability if it is resident foreign corporation is
a. P318,000 c. P328,750
b. P341,750 d. None of the above.
44. And if it is a non-resident foreign corporation, its total tax liability is

a. P433,500 c. P338,500
45. Any income from transactions with depository banks under the expanded foreign
currency deposit system shall be exempt from income tax if derived by a
c. Non-resident foreign corporation
d. Resident alien
46. Selected cumulative balances were taken from the record of ABC Co., a domestic
corporation, in its fifth year of operations in 2018, which had an income tax refundable of
P10,000 for the preceding year for which there is a tax credit:
Q1 Q2 Q3 Q4
Gross profit from sale P800,000 P1,600,000 P3,100,000 P3,000,000
Capital gain on sale directly to buyer of shares of domain 50,000
Dividend from domestic corporation 50,000
Interest income on 100,000
Philippine Peso bank 100,000
10,000
10,000
20,000
20,000
5,000
10,000
20,000
20,000
Business expenses 600,000 1,200,000 2,100,000 2,100,000
Income tax withheld 15,000 35,000 115,000 115,000
The income tax due and the income tax payable, respectively, at the end of first quarter
a. P16,000; P35,000
b. P60.000; P60,000
c. P60,000; P35,000
d. P16.000; P16,000
47. The income tax due and income tax payable, respectively, at the end of second quarter
a. P120,000; P75,000
b. P120,000; P85.000
c. P120,000; P40,000
d. P85,000; P85,000
48. The income tax due and income tax payable, respectively, at the end of third quarter
a. P210,000; P135,000
b. P210,000; P60,000
c. P48,000; (P102,000)
d. P48,000; (P38,000)
49. The income tax due and income tax payable, respectively, at the end of the year
a. P300,000; P52,000
b. P300,000; P30,000
c. P300,000; P260,000
d. P300,000; P40,000
50. A domestic corporation has the following data for 2018:
Excess MCIT 2017 - P10,000
Q1 Q2
Income, net of 1% withholding tax P495,000 P792,000
Deductions 480,000 700,000
How much is the income tax still due and payable in the second quarterly return?
a. P 4,000
b. P8,000
c. P9,000
d. P13,000
51. The record of a closely-held domestic corporation show the following data for 2018:
Gross income P1,500,000

Business expenses 600,000
Gain on sale of business asset 60,000
Interest on deposits with Metrobank, net of tax 5,000
Sale of shares of stocks, not listed and traded:
Selling price 150,000
Cost 115,000
Dividends from Victory Corporation, domestic 35,000
Dividends paid during the year 120,000
Reserved for building acquisition 300,000
In 2017, the corporation suffered an operating loss of P130,000. This amount was carried
forward and claimed as deduction from gross income 2018. The income tax due in 2018
is
a. P234.375
b. P249,000
c. P273,937
d. P288,000
52. The improperly accumulated earnings tax

a. P36,075
b. P34,765
c. P35,640
e.
53-57. The records of a domestic corporation organized in 2000 show:
2016 2017 2018
Gross Income P2,000,000 P3,000,000 P4,000,000
Other Income:
Capital gain from sale of commercial land 400,000
Interest income from bank deposit 500,000
Capital gain from sale of shares of stock- not listed
80,000
96,000
60,000
70,000
Allowance deduction 1,940,000 3,100,000 3,500,000
53. The income tax payable in 2016 is
a. P138,000
b. P 40,000
c. P 42,000
d. P 18,000
54. What is the accounting entry for the excess MCIT in 2016?
a) Provision for income tax Deferred charges - MCIT (2016) Income tax payable
P18,000 22,000 P40,000
b) MCIT (2016) Income tax payable P18,000 P18,000
c) Income tax payable Excess MCIT (2016) Cash P40,000 P22,000 18,000
55. The taxable income in 2018 is

a. P400,000
b. P900,000
c. P1,000,000
d. P500,000

a. P150,000
b. P120.000
c. P38,000
d. P68,000
57. What are the accounting entries to properly record the income tax payable in 2018?
a. Provision for income tax P120,000
Deferred charges - MCIT (2016, 2017) P82,000
Income tax payable 38,000
b. Provision for income tax P38,000
Income tax payable P38,000
c. Income tax payable P120,000
Cash P120,000
58. A calendar-year BOI-registered enterprise has the following data from its registered
activity for 2018:
Total sales for year P90,000,000

Cost of sales 45,000,000
Other business expenses 30,000,000
Taxable income for the year 15,000,000
Regular corporate tax rate 30%
1. If the enterprise is under the Income Tax Holiday (ITH) regime, compute the tax
covered by the ITH for the entire taxable year 2018
a.
b. P 4,500,000
c. P27,000,000
d. P13,500,000
e. None of the above.
2. If the enterprise is a PEZA-registered and under the 5% GIT, compute the tax
payable. a. P2,250,000
b.
P2,700,000
c.
P1,350,000
59. James Lustre is the manager of a PEZA-registered enterprise availing of the

preferential
5% GIT in lieu of all other taxes, national or local. Besides his salary, he also
receives fringe benefits which are normally subject to the fringe benefits tax
(FBT).
Statement 1: The manager's salary is also subject to the 5% GIT.
Statement 2: The PEZA-registered enterprise is exempt from remitting the CWT on
the manager's salary, and from payment of the FBT.
a. Both statements are
true. b. Both statements
are false. c. Only
Statement 1 is true. d.
Only Statement 2 is true.
60. Statement 1: Once the profit has been subjected to IAET, the same shall no longer
be subjected to IAET in later years even if not declared as dividend.
Statement 2: Notwithstanding the imposition of IAET, profits which have been

subjected to IAET, when finally declared as dividends, shall nevertheless be subject to
tax on dividends imposed under the Tax Code except in those instances where the
recipient is not subject thereto.
Statement 3: A corporation that declared dividends within the 1-year period from the
end of the taxable year being assessed is no longer liable for the IAET.
a. All statements are
true. b. All statements
are false. c. One
statement is true.
61. Income payments were made by Superman Corporation (domestic) to Darna

Corporation, a PEZA- registered entity under the 5% GIT Regime. The payments
made were related to Darna's registered activities. Superman withheld CWT from its
payments. Darna claims that no tax should have been withheld. Superman claims that
withholding is proper because Darna is not under the ITH regime. Who is correct?
(a) Superman is correct. Only those PEZA-registered entities under the ITH are
exempt from withholding on their receipt of income.
(b) Darna is correct. Under the 5% GIT regime, it is exempt from all local and
national taxes (including withholding taxes on its income) and in lieu thereof, is
only subject to the 5% special tax on gross income.
(c) Superman loves Wonder
Woman. (d) No comment.
CPA REVIEW SCHOOL OF THE
PHILIPPINES For PSBA Integrated
Review
CORPORATION
1. ABC, a corporation registered in Norway, has a 50MW electric power plant in San
Jose, Batangas. Aside from ABC's income from its power plant, which among the
following is NOT considered as part of its income from sources within the
Philippines?
a. Gains from the sale to an Ilocos Norte power plant of generator bought from the
United States.
b. Interests earned on its dollar deposits in a Philippine bank under the
Expanded
Foreign Currency Deposit System.
c. Gain from the sale, in London, of shares of stock and other securities of San
Miguel Corporation, a domestic corporation.
d. Royalties from the use in Brazil of generator sets designed in the Philippines by
its engineers.
2. Aplets Corporation is registered under the laws of the Virgin Islands. It has
extensive operations in Southeast Asia. In the Philippines, its products are imported
and sold at a mark-up by its exclusive distributor, Kim's Trading, Inc. The BIR
compiled a record of all the imports of Kim from Aplets and imposed a tax on
Aplets's net income derived from its exports to Kim. Is the BIR correct?
a. Yes. Aplets 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. Aplets is a non-resident foreign corporation not engaged in trade or
business
in the Philippines.
d. Yes, Aplets is doing business in the Philippines through its exclusive distributor
Kim's Trading Inc.
3. ABC Inc., a corporation registered and holding office in Australia, not operating in the
Philippines, may be subject to Philippine income taxation on
a. Gains it derived from sale in Australia of an ore crusher it bought from the
Philippines with the proceeds converted to pesos.
b. Gains it derived from sale in Australia of shares of stock of Philex Mining
Corporation, a Philippine corporation.
c. Dividends earned from investment in a foreign corporation that derived 40% of
its gross income from Philippine sources.
d. Interest derived from its dollar deposits in a Philippine bank under the
Expanded
Foreign Currency Deposit System
4. . A corporation organized and created under the laws of a foreign country

and is authorized to do business/trade in the Philippines is:
c. Government owned and controlled
corporation d. Non-profit hospital
5. A domestic corporation may employ, as a basis for filing its annual corporate income
tax return the:
a. Calendar year only c. Either calendar or fiscal year
b. Fiscal year only d. Neither calendar or fiscal year
6. A corporation files a quarterly return within
a. 30 days after the end of each of the first 3 quarters
b. 60 days after the end of each of the first 3 quarters
c. 30 days, after the end of each of the first 4 quarters
d. 60 days after the end of each of the first 4 quarters
7. A final or annual return is filed on or before the 15th day of the

a. Month following the close of the taxable year
b. 2 month following the close of the taxable year.
c. 3rd month following the close of the taxable year
d. 4th month following the close of the taxable year
8. One of the general principles of income taxation:

a. A foreign corporation engaged in business in the Philippines is taxable on
all income derived from sources within and without the Philippines.
b. A foreign corporation engaged in business in the Philippines is taxable on
all income derived from sources within the Philippines only
c. A domestic corporation is taxable on income derived from sources within the
Philippines only.
d. A domestic corporation is taxable on income derived from sources without
the
Philippines only.
9. One of the following does not fall under the definition of a "corporation" for income tax
purpose:
a. General partnership
b. Joint stock company
c. Insurance company
d. Sole proprietorship
10. Which of the following is subject to the income tax?
b. Public educational institution
c. Civic league or organization not organized for profit and operated exclusively for
the promotion of social welfare
d. Mutual savings bank and cooperative bank having a capital stock represented by
shares organized and operated for mutual purposes and profit.
11. The Philippine Health Insurance Corporation (Philhealth), a government-owned

corporation is:
a. Exempt from the corporate income tax.
b. Subject to the preferential corporate income tax for special corporations.
c. Subject to the basic corporate income tax
d. Subject to final tax
12. Public educational institutions, like the University of the Philippines is deemed by law:
a. Subject to the preferential corporate income tax for special corporations.
b. Subject to the basic corporate income tax.
c. Subject to both the preferential income tax and the basic corporate income tax.
d. Exempt from the corporate income tax
13. Which is not correct? The following are exempt from the corporate income tax:
a. Local water districts
b. Bureau of Internal Revenue
c. Government owned or controlled corporation
d. Social Security System
14. Which of the following may be subject to the corporate income tax?
b. A public educational institution
c. A private educational institution
d. Government Service Insurance System
15. The improperly accumulated earnings tax shall apply to
a. Publicly held corporation
b. Banks and other non-bank financial intermediaries
c. Insurance companies
d. Closely held domestic corporations

a. MCIT is not applicable to resident foreign corporations.
b. The corporate quarterly return shall be filed within 60 days following the close of
each of the first three quarters of the taxable year.
c. Resident foreign corporations would be taxed on net income from within the
Philippines only.
d. Non-resident foreign corporations are taxed on gross income from within the
Philippines only.
17. The following income are subject to final tax, except

a. Royalty income received by a domestic corporation from a domestic corporation.
b. Cash dividends received by a non-resident foreign corporation from a domestic
corporation
c. Cash dividends received by a domestic corporation from a domestic corporation.
d. Interest income from a Peso deposit received by resident foreign corporation from
a Philippine bank.
e. Branch profit remitted by a branch to the head office of a resident foreign
corporation.
18. The MCIT shall not apply to the following resident foreign corporations, except
a. RFC engaged in business as international carrier subject to 2 1/2 % of their Gross
Philippine Billings
b. RFC engaged in business as Offshore Banking Units on their income from foreign
currency transactions with local commercial banks
c. RFC engaged in business as regional operating headquarters
d. RFC engaged in hotel, motel and resort operations
19. The president, upon recommendation of the Secretary of Finance, may allow corporations
the option to be taxed at 15% of gross income, after the following conditions, except one,
have been satisfied. Which is the exception?
a. A tax effort ratio of 20% of Gross National Product (GNP)
b. A ratio of 20% of income tax collection to total tax revenue
c. A vat tax effort of 4% of GNP
d. A 0.9% ratio of consolidated public sector financial position to GNP
20. Which of the following is not correct? The 15% gross income tax
a. Is optional to a qualified corporation
b. Is available if the ratio of cost of sales to gross sales or receipts from all sources
does not exceed 55%
c. Shall be irrevocable for three consecutive taxable years that the corporation
is qualified under the scheme
d. Is compared with the normal income tax and minimum corporate income tax, and
whichever is the highest shall be paid.
21. If the gross income from unrelated activity exceeds 50% of the total gross income derived
by any private educational institution, the tax rate shall be the regular 30% based on the
entire taxable income. This is known as the
a. Constructive receipt
b. Tax benefit rule
c. End trust doctrine
d. Predominance test
22. For income taxation purposes, the term “corporation" excludes one of the following:
a. Ordinary partnership
b. An incorporated business organization
c. General professional partnership
d. Business partnership
23. A domestic corporation's record show:

Quarter Excess
Withholding
Tax Prior Year
First P100,000 P80,000 P20,000 P30,000 P10,000
Second 120,000 250,000 30,000
Third 250,000 100,000 40,000
Fourth 200,000 100,000 35,000
The income tax due and income tax payable, respectively, for the first quarter are
a. P100,000; P100,000
b. P100,000; P80,000
c. P100,000; P50,000
d. P100,000; P40,000
24. The income tax due and income tax payable, respectively, for the second quarter are
a. P330,000; P 120,000
b. P330,000; P 250,000
c. P330,000; P 150,000
d. P330,000; P 230,000
25. The income tax due and income tax payable, respectively, for the third quarter are
a. P470,000; P 250,000
b. P470,000; P 100,000
c. P470,000; P 140,000
d. P470,000; P 70,000
26. The income tax due and income tax payable, respectively, for the year are
a. P670,000; P 200,000
b. P670,000; P 100,000
c. P670,000; P 135,000
d. P670,000; P 165,000
27. Using the preceding problem except that the normal income tax for the fourth quarter is
P50,000 (instead of P200,000), the income tax still due for the year is
a. P 120,000
b. P 55,000
c. P 45,000
d. P 75,000
28. CPA University, a proprietary educational institution organized in 2006, had the
following data for 2018. Tuition Fees P 850,000 Rental Income (net of 5% cwt) 142,500
School related expenses 820,000 The income tax still due for 2018 is
a. P 54,000
b. P 10,500
c. P 18.000
d. P 46,500
29. CPA College, a proprietary educational institution organized in 2006, had the following
data for 2018. P 480,000 494,000 945,000 Tuition Fees Rental Income (net of 5% cwt)
School related expenses The income tax still due for 2018 is
a. P 16,500
b. (P 9,500)
c. (P6,000)
d. P20,000
30. CPA Airlines, a resident foreign international carrier has the following records of income
for the period. (The income represents gross billings.)
a. Continuous flight from Manila to Tokyo = 1,000 tickets at P2,000 per ticket
b. Flight from Manila to Taipei; transfer flight (on CPAR Airlines) from Taipei to
Tokyo = 2,000 tickets at P2,000 per ticket
c. Continuous flight from Manila to Taipei = 3,000 tickets at P1,000 per ticket The
income tax due is
a. P225,000
b. P 125,000
c. P 100,000
d. P 175,000
31-40. The A Corporation provided the following data for the calendar year ending
December 31, 2018 (S 1 = P50)
Philippines U.S.A.
Gross Income P4,000,000 $40,000
Deductions P2,500,000 $15,000
Income Tax Paid $ 3,000
31. If it is a domestic corporation, its income tax after tax credit is
a. P 812,500
b. P 675,000
c. P 962,500
d. P 480,000
32. If it is a resident foreign corporation, its income tax is
a. P 730,000
b. P 450,000
c. P 480,000
d. P 525,000
33. If it is a non-resident foreign corporation, its income tax is

a. P730,000
b. P 1,280,000
c. P1,200,000
d. P 1,400,000
34. Under No. 31, but it opts to claim the tax paid abroad as deduction from gross income, its
income tax is
a. P910,000 c. P237,000
b. P832,000 d. P780,000
35. If it is a resident international carrier, its income tax is

a. P100,000 c. P 37,000
b. P 10,000 d. P125,000
36. If it is a non-resident cinematographic film owner/lessor, its income tax is

a. P1,000,000 c. P300,000
b. P 100,000 d. P128,000
37. If it is a non-resident lessor of vessels, its income tax is

a. P100,000 c. P300,000
b. P180,000 d. P128,000
38. If it is a non-resident lessor of aircrafts, machineries and equipment, its income tax is
a. P100,000 c. P300,000
b. P180,000 d. P128,000
39. If it is a resident foreign corporation but its expenses within and outside the Philippines is
P3m, unallocated (disregard original data on expense) its income tax is
a. P640,000
b. P700,000
c. P480,000
d. P600,000
40. If it is a resident foreign corporation and it remitted 60% of its net profit to its head office
abroad, its total income tax liability is (Original data)
a. P480,000
b. P571,800
c. P544,500
d. P612,750
41. A Corporation, a resident foreign corporation, provided the following data for taxable
year 2018:
Philippines USA
Gross Income P40M P20M
Dividend from:
Domestic corporation 4M
Foreign corporation (100%
of its business is in the Phils.) 5M
Business expenses 12M 8M
The corporation remitted to its head office the PSM dividend income and 40% of its net
profit to its head office in USA. The corporation's total tax liability including the tax on
the profit remitted is
a. P10,240,000 c. P12,960,000
b. P12,448.000 d. P10,944,000
42. A Corporation has the following data for the year 2018:
Gross Income, Philippines P1,000,000

Gross income, USA 500,000
Gross income, Japan 500,000
Expenses, Philippines 300,000
Expenses, USA 200,000
Expenses, Japan 100,000
Other Income:
Dividend from San Miguel Corp. 700,000
Dividend from Ford Motors, USA 120,000
Gain, sale of San Miguel shares directly to buyer 150,000
Royalties, Philippines 50,000
Royalties, USA 100,000
Interest income (other than from bank deposit) 60,000
Rent, land in USA 250,000
Other rental income (Phils.) 100,000
Prize, contest in Manila 200,000
Interest income (S deposit in BDO 50,000
The total tax liability as a domestic corporation is:

a. P709,000 c. P679,750
.
43. Based on the above problem, its total tax liability if it is resident foreign corporation is
a. P318,000 c. P328,750
b. P341,750 d. None of the above.
44. And if it is a non-resident foreign corporation, its total tax liability is

a. P433,500 c. P338,500
45. Any income from transactions with depository banks under the expanded foreign
currency deposit system shall be exempt from income tax if derived by a
c. Non-resident foreign corporation
d. Resident alien
46. Selected cumulative balances were taken from the record of ABC Co., a domestic
corporation, in its fifth year of operations in 2018, which had an income tax refundable of
P10,000 for the preceding year for which there is a tax credit:
Q1 Q2 Q3 Q4
Gross profit from sale P800,000 P1,600,000 P3,100,000 P3,000,000
Capital gain on sale directly to buyer of shares of domain 50,000
Dividend from domestic corporation 50,000
Interest income on 100,000
Philippine Peso bank 100,000
10,000
10,000
20,000
20,000
5,000
10,000
20,000
20,000
Business expenses 600,000 1,200,000 2,100,000 2,100,000
Income tax withheld 15,000 35,000 115,000 115,000
The income tax due and the income tax payable, respectively, at the end of first quarter
a. P16,000; P35,000
b. P60.000; P60,000
c. P60,000; P35,000
d. P16.000; P16,000
47. The income tax due and income tax payable, respectively, at the end of second quarter
a. P120,000; P75,000
b. P120,000; P85.000
c. P120,000; P40,000
d. P85,000; P85,000
48. The income tax due and income tax payable, respectively, at the end of third quarter
a. P210,000; P135,000
b. P210,000; P60,000
c. P48,000; (P102,000)
d. P48,000; (P38,000)
49. The income tax due and income tax payable, respectively, at the end of the year
a. P300,000; P52,000
b. P300,000; P30,000
c. P300,000; P260,000
d. P300,000; P40,000
50. A domestic corporation has the following data for 2018:
Excess MCIT 2017 - P10,000
Q1 Q2
Income, net of 1% withholding tax P495,000 P792,000
Deductions 480,000 700,000
How much is the income tax still due and payable in the second quarterly return?
a. P 4,000
b. P8,000
c. P9,000
d. P13,000
51. The record of a closely-held domestic corporation show the following data for 2018:
Gross income P1,500,000

Business expenses 600,000
Gain on sale of business asset 60,000
Interest on deposits with Metrobank, net of tax 5,000
Sale of shares of stocks, not listed and traded:
Selling price 150,000
Cost 115,000
Dividends from Victory Corporation, domestic 35,000
Dividends paid during the year 120,000
Reserved for building acquisition 300,000
In 2017, the corporation suffered an operating loss of P130,000. This amount was carried
forward and claimed as deduction from gross income 2018. The income tax due in 2018
is
a. P234.375
b. P249,000
c. P273,937
d. P288,000
52. The improperly accumulated earnings tax

a. P36,075
b. P34,765
c. P35,640
e.
53-57. The records of a domestic corporation organized in 2000 show:
2016 2017 2018
Gross Income P2,000,000 P3,000,000 P4,000,000
Other Income:
Capital gain from sale of commercial land 400,000
Interest income from bank deposit 500,000
Capital gain from sale of shares of stock- not listed
80,000
96,000
60,000
70,000
Allowance deduction 1,940,000 3,100,000 3,500,000
a. P138,000
b. P 40,000
c. P 42,000
d. P 18,000
54. What is the accounting entry for the excess MCIT in 2016?
a) Provision for income tax Deferred charges - MCIT (2016) Income tax payable
P18,000 22,000 P40,000
b) MCIT (2016) Income tax payable P18,000 P18,000
c) Income tax payable Excess MCIT (2016) Cash P40,000 P22,000 18,000
55. The taxable income in 2018 is

a. P400,000
b. P900,000
c. P1,000,000
d. P500,000

a. P150,000
b. P120.000
c. P38,000
d. P68,000
57. What are the accounting entries to properly record the income tax payable in 2018?
a. Provision for income tax P120,000
Deferred charges - MCIT (2016, 2017) P82,000
Income tax payable 38,000
b. Provision for income tax P38,000
Income tax payable P38,000
c. Income tax payable P120,000
Cash P120,000
58. A calendar-year BOI-registered enterprise has the following data from its registered
activity for 2018:
Total sales for year P90,000,000

Cost of sales 45,000,000
Other business expenses 30,000,000
Taxable income for the year 15,000,000
Regular corporate tax rate 30%
2. If the enterprise is under the Income Tax Holiday (ITH) regime, compute the tax
covered by the ITH for the entire taxable year 2018
a.
b. P 4,500,000
c. P27,000,000
d. P13,500,000
e. None of the above.
2. If the enterprise is a PEZA-registered and under the 5% GIT, compute the tax
payable. a. P2,250,000
b.
P2,700,000
c.
P1,350,000
59. James Lustre is the manager of a PEZA-registered enterprise availing of the

preferential
5% GIT in lieu of all other taxes, national or local. Besides his salary, he also
receives fringe benefits which are normally subject to the fringe benefits tax
(FBT).
Statement 1: The manager's salary is also subject to the 5% GIT.
Statement 2: The PEZA-registered enterprise is exempt from remitting the CWT on
the manager's salary, and from payment of the FBT.
a. Both statements are
true. b. Both statements
are false. c. Only
Statement 1 is true. d.
Only Statement 2 is true.
60. Statement 1: Once the profit has been subjected to IAET, the same shall no longer
be subjected to IAET in later years even if not declared as dividend.
Statement 2: Notwithstanding the imposition of IAET, profits which have been

subjected to IAET, when finally declared as dividends, shall nevertheless be subject to
tax on dividends imposed under the Tax Code except in those instances where the
recipient is not subject thereto.
Statement 3: A corporation that declared dividends within the 1-year period from the
end of the taxable year being assessed is no longer liable for the IAET.
a. All statements are
true. b. All statements
are false. c. One
statement is true.
61. Income payments were made by Superman Corporation (domestic) to Darna

Corporation, a PEZA- registered entity under the 5% GIT Regime. The payments
made were related to Darna's registered activities. Superman withheld CWT from its
payments. Darna claims that no tax should have been withheld. Superman claims that
withholding is proper because Darna is not under the ITH regime. Who is correct?
(a) Superman is correct. Only those PEZA-registered entities under the ITH are
exempt from withholding on their receipt of income.
(b) Darna is correct. Under the 5% GIT regime, it is exempt from all local and
national taxes (including withholding taxes on its income) and in lieu thereof, is
only subject to the 5% special tax on gross income.
(c) Superman loves Wonder
Woman. (d) No comment.

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GENERAL PRINCIPLES OF TAXATION Dela Cruz/De Vera/Lopez/Llamado

1.The principal purpose of taxation is

2. The aspects of taxation are

3. Taxation as distinguished from police power and power of eminent domain

5. Which of the following statements is correct?

6. This is an inherent limitation on the power of taxation

7. This is a constitutional limitation on the power of taxation

11. The sources of revenue as a whole, should be sufficient to

13. Statement 1 — The point on which a tax is originally imposed is

16. Which is not an essential characteristic of a tax?

17. Special assessment is an enforced proportional contribution from owners of land

22. The use of legal or permissible means to minimize or avoid taxes

23. Synonymous to tax evasion

24. Synonymous to tax avoidance

25. In case of doubt, tax statutes are construed

26. In case of doubt, tax exemptions are construed

35. Tax based on a fixed percentage of the amount of property, income or

40. This power is superior to the non-impairment clause and is broader in

41. Which of the following statements is not correct?

45. A tax wherein both the impact of or the

46. Which one of the following is not a

47. Tax as distinguished from license fees:

48. The power to impose taxes is exercised

49. One of the

50. Which of the following is

51. The following are similarities of the

4. Which of the following statements is not correct?

7. A resident citizen is taxable on all income derived from sources

10. A non-resident alien is deemed doing business in the Philippines if he

BIR Commissioner's zonal valuation - P 9,000,000

What is the capital gains tax on the sale?

Gross sales, Phils. P2,000,000

Gross sales, USA 1,500,000

Operating expenses, Phils. 10,000

1.) Cumulative Filing.

2.) Compensation income from being an employee is included only in

1st Quarter May 15 of the Current Taxable Year

1st Quarter 2nd Quarter 3rd Quarter 4th Quarter

Compute his income tax due in 2018.

Illustration of Computations in Quarterly ITRs:

Monthly Rental Fees Less 1% CWT Monthly Rental Expense

Gross pay Less CWT Less SSS Premiums Net Pay

He has excess tax credits from the prior year of P15,000

a. Yes, that is his right under the Tax Code.

On citizens, residents, non-resident aliens engaged in business in the Philippines on

Graduated Tax Rates: Effective January 1, 2018 to December 31, 2020:

On citizens, residents, non-resident aliens engaged in business in the Philippines on

Over Not Over Basic Amount Additional Rate Of Excess Over

Graduated Tax Rates: Effective January 1, 2023 onwards:

On citizens, residents, non-resident aliens engaged in business in the Philippines on

Over Not Over Basic Amount Additional Of Excess

7. A final or annual return is filed on or before the 15th day of the

8. One of the general principles of income taxation:

11. The Philippine Health Insurance Corporation (Philhealth), a government-owned

16. Which of the following statements is not correct?

17. The following income are subject to final tax, except

23. A domestic corporation's record show:

33. If it is a non-resident foreign corporation, its income tax is

35. If it is a resident international carrier, its income tax is

36. If it is a non-resident cinematographic film owner/lessor, its income tax is

37. If it is a non-resident lessor of vessels, its income tax is

Gross Income, Philippines P1,000,000

The total tax liability as a domestic corporation is: