Review School of ‘WTel, No. 735-9807 & 734-3989 TAXATION April 15, 2018 (Sunday) Final Pre-Board Examination 8:00 AM to 11:00 A.M. MULTIPLE CHOICE INSTRUCTIONS: Select the correct answer for each of the following uestions. Mark only one answer for each item by shading the box corresponding to the letter of your choice on the sheet provided. STRICTLY NO ERASURES ARE ALLOWED. Use pencil no. 2 only. The power to impose a tax, fee, or charge or t Code shall be exercised by the: a. Sanggunian of the locel government unit concerned through an appropriate ordinance. b. Provincial Governor of the local government unit concerned through an appropriate executive order. ©. Provincial Assessor of the local government unit concerned through an appropriate issuance 4. Provincial Engineer of the local government unit concerned through an appropriate plan. generate revenue under this Which of the following taxes enall act be imposed on eale real property Classified as capital asset in the Philippines? a. Capital gains tax B. Docurentary stamp tax ©. Tax on Transfer of Real Property Ownership 4. Value-Added Tax Unless otherwise provided in the Local Government Code, eli local taxes, fees, and charges shall be paid within: a. the first twenty (20) days of January or of each subsequent quart: the case may be. b. the fire ewenty (20) days of, January only. ce: the first fifteen (15) days of Janupry'or of each subsequent quarter, as the case may. be. E 4, the first ton (10) days of January or of oach subsequent quarter, as tho case may be. A senior citizen transferred property inter vivosvelued at 500,000 to his child who is getting married. For Philippine tax purposes: a. he will be exempt from donor's tax. by he will be subject donor's tex. 1 he will be subject to incone tax d. he will be exempt from all taxss 5. The 208 discount on sales of goods and services to senjor citizens and PADs shall be: a, Deducted from grose sales for incone tax purpose: Db. Deducted from gross income for income tax purposes. c. Shali be claimed as input tax credit for VAT purposes 4. Shall either deducted from gross sales for income tax purposes or Claimed as input tax for VAT purposes. ‘The Income Tax Holiday (ITH) of nowly recistered ploneer firms shall bet a. six (6) years from comercial operaricns: Bl four (4) years trom commercial operations. ; €: three (3) years. from commercial operat: 4. two (2) Six (6) years fron commercial operations. - Subject to the Regulations to be issued by the Secretary of Finance, upon the Fecomtendation of the Commissioner of the Bureau of Internal Revenue, the 5t special incone tax on gross income earned, in liew of all taxes (except real property tak on land owned by developer}, purauant to Section 26 Of R.A. Now 4916, a8 amended, shail be directly paid and remitted by registered ECOZONE enterprises as follows: I= 38 to the national aovernnent15. As a general rule, campaign vontributions to candidates or political parties ‘a. not included in, the taxable income of the candidates. 1B. included in the taxable incone of the candidates. ©, subject to donor's tax. G! either subject to income tax or donor's tax. 16. an individual citizen of the Philippines who is working and deriving income from abroad ae an overseas contract. worker (OCW) 1s considered as 9 nonresident citizen and taxable ont aah) incone derived from sources within and without the Philippines BL all income derived from all sources within the, Philippines: el all income derived from all sources outside the Philippines. $1 neither incone within nor income without the Philippines. 1). Tf a BoI-registored enterprise has a “registered” and an “unregistered” Activity, the Minimum Corporate Incone Tax (WCIT) shall apply tot a. both registered and unregistered activities. bl registered activity only. ©. unregistered acrivity only G. neither registered sor unregistered activity. 18._A domestic corporation has the following data for three (3) years: Year ‘Normal income t5x Winimun comporate incone tax 2016 75,000 50,000, 2017 P60; 000. 400,000 2018 (P00, 000 60,000 How much is the amount of tax payable for the year 2018: ‘2+ P10, 000 e+ PAS, 000 b. P60, 000 a. P35,000 19, Emirates Airlines, an international air carrior, lifted passengers;~excess Baggage, cargo and/or mail from Manila. Tt had a stopover in Dubai. Tho passengers were transferred to another plane belonging to Stinad which Brought the passengers Eo Rome. ia computing the Gross Philippine billings, [.- shall include the gzos# of revenue on its flight from Manila té Rome. I~ shall include the gross of revenue on its flight from Manila to Dubai a. Only 3 is correct b. Only if is correct a Both I and TT are correct. | Either I or 17 is correct. 20. Intornational’ carriers that do not have flight to and from the Philippines but nonetheless earn ancone from other activities in the country: will be subject to 2% 2 special rate. Will be subject to 30¢ regular cate. Gil be subject to both 2% & special rate and 30t regular rate. will not be gubject to Philippine income tax. 21. A non-stock, non-profit organization that enjoys exenption from income tax is required: FI ‘a te file and annual information return under oath on or before April 15. b. to file quarterly and annual ceturn just Like any other corporations. ©. not to file any return whatsoever. 4. te file annual return only. 22. In which of the following cases shall the monetary value be the entire value of the benefit? T -1f the employer purchase: a residential property and transfers ownership of the eaid property in the name of the employee TE-TE the employer purchases 2 resadential property and transfers ownership fof the sold property to his employee for the latter's residential use, St a price greater than the employer's acquisition cost a. Both T and TI fe. Neither I nor 1 b. T only 4. TE only ‘23. Interest income from long-term deposit or investment certificate shall be subject to final withhoiding income tax if received by: ‘a. Resident, citizen. b. Resident alien. : Cl Resident foreign corporation.32. 33 aa. 36 37 ae. on October 15, 2016, Gonma “Baby” Cruz anvested vsuu,wuy in Samson Corporation ‘common shares. The following year, on July 15, 2017, Sanson Corporation common shares became worthless. How mach was the capital less to be recogaized by Gamma “Paby" Cruz? ‘a. P300,000 ce. P15,000 b. P150,000 dl None of the choices Which of the following statements is incorrect? 'b. For incone tax purposes, the accounting period of a taxpayer is a period of 12 months. b. Calendar year is a period of 12 wonths starting from January 1 and ending on December 31. ce, Fiscal year is a period of 12 months ending on the last day of any mont other than Decenber d. A taxpayer may not have a taxable period of lese than 12 months. The accrual of income and cxpence ia permitted when the ail-events test has been met. The all-events roar Poquires? T=. fixing of a right to incone or liability to pay TT “the availability of the reaconable accurate determination of such income for Liabilicy a. Only I is corcect ¢. Both I and IT are correct bl only Ir is correct 9. Neither Inor II is correct ‘The following individuals shall not be required to file an income tex return except: 3. An individual whose gross income does not exceed his total personal and additional exeaptions for dependents b. A minimum wage earner (MAE) or an individual who te exempt from income tax pursuant ro the provisions of the Tax Code c. A marginal income earner the gross sales or gross receipts of whom de not exceed 100,000 during any i2-nonth period. . Rn individual earning gurely ccxpensation income but who is coscurrently employed by two ur more employers at any time during the taxable year. LY2A sold her eaidential land in Teabela for 5,000,000 (FWY was 6,000,000). ‘The proceeds “were used to build a principal. residence in Yanila, She informed the BIR within 30 days from the date of sale that she intended to use the proceeds to build 2 new principal residence. What was che tax consequence of ths sale? a. Lyga would be exempt from capital gain tax. b. Lyza should pay a capital gains tax of 300,000, €. Lyzashould pay a capital gaina tax of 7360, 000. 4. Lyza should deposit (> ascrow the amount of P360,000. In 2017, Cheietian Macariola, a self-employed resident citizen, paid the following national and local taxes Philippine income tax for 2017 . Pi, 000, 000 Surcharge for late payment of 2016 income tax 128,000 Interest for late paytent of 2018 incone tax 100, 000 Professional tax 300 Gravel and vend tax 20,000 U.S.A income tax for 2017 500, 000 Real property tax on his house r 3,000 Road user’ s tax on his oalivery vans 50,000: Local annual fixed tax foc nia delivery. vans 10,000 If Christian Macariola nad signified in his return to claimforeign incone tax paidas tax credit, how much deduction for taxes may he claim on his 2017 a. P1,583, 300 cc. P880,300 bl Pp’ 583,300 dl P 86,300 The transfer for insut except which one? 3. Transfer in contemplation of cleath b. Revocable transfer Tronafer of property paczing » general power of appointmer 4. Transfer with retention or reservation of certain rights cient considecation falls under any of the following Mr. Tongpaki Tongkitong, a Thai citizen, met an accident and died while visiting the Philippines. Which among the following properties are to bo excluded from his gross estate for Philippine tax purposes? a. Hig house and lot in Thailand B.A condominium unit in California, OSA 7 ©. Accident insurance iscued by a Philippine insurance company payable to his wite