Taxation Bar Questions

TAXATION
Set A
MULTIPLE CHOICE QUESTIONS
1. A
2. B
3. C
4. D
5. D
6. B
7. C
8. A
9. C
10. A
11. A
12. A
13. A but was manually changed t B
14. C
15. B
TRUE OR FALSE
1. !"#$
2. %A&'$
3. %A&'$
4. !"#$
5. %A&'$
ESSAY TYPE QUESTIONS
I
B. (t may cla)m as *e+und the amunt + ,500-000 *e.*esent)ng )ts )ncme ta/ 0e*.ayment +* )1ts ta/able
yea* 2009.
')nce the ta/.aye* has .ted t ca**y20e* the ,13 0e*.a)d )ncme ta/ +* ta/able yea* 2008- sa)d .t)n )s
cns)de*ed )**e0cable and n a..l)cat)n +* cash *e+und shall be allwed +* )t. 4'ec. 76- 5("C6 C(" 0. B,(-
7.". 5. 178490- 8uly 7- 20099
II
5:. !he )ssuance + the ,A5 des nt g)0e *)se t the *)ght + the ta/.aye* t .*test. ;hat can be .*tested
by a ta/.aye* )s the %A5 * that assessment )ssued +llw)ng the ,A5. ')nce the %A5 was t)mely .*tested
4w)th)n 30 days +*m the *ece).t the*e+- the assessment d)d nt becme +)nal and e/ecut* 4'ec. 228- 5("C6
"" 122999
III
5- +* e)the* + tw *easns 419 (n )nstances )n wh)ch the C(" )s 0ested w)th auth*)ty t cm.*m)se- such
auth*)ty shuld be e/e*c)sed )n acc*dance w)th the C("<s d)sc*et)n and cu*ts ha0e n .we*- as a gene*al
*ule- t cm.el h)m t e/e*c)se such d)sc*et)n ne way * anthe*. 4=..el ,h)ls. 0. C("- 19509 429 (+ the C("
abuses h)s d)sc*et)n by nt +llw)ng the .a*amete*s set by law- the C!A- nt the CA- may c**ect such abuse
)+ the matte* )s a..ealed t )t. (n case + a*b)t*a*y * ca.*)c)us e/e*c)se by the C(" + the .we* t
cm.*m)se- the cm.*m)se can be attac1ed and *e0e*sed th*ugh the >ud)c)al .*cess. (t must be nted
hwe0e*- that a cm.*m)se )s cns)de*ed as the* matte*s a*)s)ng unde* the 5("C wh)ch 0ests the C!A w)th
>u*)sd)ct)n- and s)nce the dec)s)n + the C!A )s a..ealable t the 'C- the CA )s de0)d + any .we* + *e0)ew
a cm.*m)se settlement +*ged by the C(" 4,5:C 0. 'a0ellan- 7" 5. 109976- A.*)l 26- 20056 "A 5. 9282
* >u*)sd)ct)n + the C!A9
IV
5:. (n the case + +a)lu*e t +)le a *etu*n- a .*ceed)ng )n cu*t +* the cllect)n + ta/ may be +)led w)thut an
assessment 4'ec. 2224a96 5("C9 !he ta/ can be cllected by +)l)ng a c*)m)nal act)n w)th the "!C because a
c*)m)nal act)n )s a mde + cllect)ng the ta/ l)ab)l)ty. 4'ec. 2056 5("C9 Bes)des- a C(" )s em.we*ed t
.*e.a*e a *etu*n n the bas)s + h)s wn 1nwledge- and u.n such )n+*mat)n as he can bta)n +*m
test)mny * the*w)se- wh)ch shall be .*)ma +ac)e c**ect and su++)c)ent +* legal .u*.ses 4'ec. 64b96 5("C9.
!he )ssuance + a +*mal de+)c)ency ta/ assessment- the*e+*e- )s nt *e?u)*ed.
V
!he C!A may sus.end the cllect)n + )nte*nal *e0enue ta/es )+ the +llw)ng cnd)t)ns a*e met@
1. !he case )s .end)ng a..eal the C!A6
2. (n the .)n)n + the Cu*t- the cllect)n w)ll >e.a*d)Ae the 70e*nment andB* the ta/.aye*6 and
3. !he ta/.aye* )s w)ll)ng t de.s)t )n Cu*t the amunt be)ng cllected * t +)le a su*ety bnd +* nt
m*e than duble the amunt + the ta/ 4'ec. 11 "A 5. 1125- as amended by "A 92829.
VI
Dec)s)ns + the Cllect* + Custms )n .*test and se)Au*e a*e a..ealable t the Cmm)ss)ne* + Custms
w)th)n 15 days +*m the *ece).t + nt)ce + the w*)tten dec)s)n.
As a *ule- the dec)s)n + the Cllect* + Custms a*e nt a..ealable t the C!A. (+ the Cllect* + Custms-
hwe0e*- des nt dec)de a .*test +* a lng .e*)d + t)me- the )nact)n may cns)de*ed as an ad0e*se
dec)s)n by the Cllect* + Custms and the agg*)e0ed ta/.aye* may a..eal t the C!A e0en w)thut the
Cllect*<s and Cmm)ss)ne*<s actual dec)s)n 4Cmm)ss)ne* + Custms 0. ,lante*s ,*ducts- (nc.- 7" 5.
82018- 3a*ch 16- 19899.
VII
a9 !he .*test was +)led n t)me. !he ta/.aye* has the *)ght t .*test an assessment w)th)n 60 days +*m
*ece).t the*e+ 4'ec. 195- &7C9.
b9 !he a..eal was nt +)led n t)me. ;hen an assessment )s .*tested- the t*easu*e* has 60 days w)th)n
wh)ch t dec)de. !a/.aye* has 30 days +*m *ece).t + the den)al + the .*test * +*m the la.se + the
602day .e*)d t dec)de- wh)che0e* cmes +)*st- the*w)se the assessment becmes cnclus)0e and
una..ealable. ')nce n dec)s)n n the .*test was made- the ta/.aye* shuld ha0e a..ealed t the
"!C w)th)n 30 days +*m the la.se + the .e*)d t dec)de the .*test 4'ec. 195- &7C9.
VIII
a9 !he t*ansact)n )s sub>ect t CA! at the *ate + Ae* .e*cent 40D9. ADB )s e/em.t +*m d)*ect and
)nd)*ect ta/es unde* a s.ec)al law- the*eby ma1)ng the sale + se*0)ces t )t by a CA!2*eg)ste*ed
cnst*uct)n cm.any- e++ect)0ely Ae*2*ated 4'ec. 108 4B9439- 5("C9.
b9 !he sale + se*0)ces )s sub>ect t CA! at Ae* .e*cent 40D9. Ee* *ated sale + se*0)ces )ncludes
se*0)ces *ende*ed t a .e*sn engaged )n bus)ness uts)de the ,h)l)..)nes and the cns)de*at)n )s
.a)d )n acce.table +*e)gn cu**ency duly accunted +* by the B', 4'ec. 108 4B9429- 5("C9.
c9 !he sale + *ch)ds )s sub>ect t CA! at 12D. !h)s )s a sale + ag*)cultu*al nn2+d .*duct )n )ts *)g)nal
state wh)ch )s n lnge* ne + the e/em.t t*ansact)ns 4'ec. 109- 5("C- as amended by "A 5.
93379.
IX
25D + ttal sales * ,2.53 shall be ta/ed )n Cebu and 15D + ttal sales * ,1.53 shall be ta/ed )n Da0a.
%* the *ema)n)ng 60D sales amunt)ng t ,63 wh)ch a*e *ec*ded )n the .*)nc).al ++)ce- 30D the*e+ *
,1.83 )s ta/able )n FC whe*e the .*)nc).al ++)ce )s lcated and 70D * ,4.23 )s ta/able )n 3a*)1)na C)ty
whe*e the +act*y )s lcated.
#nde* the law- manu+actu*e*s ma)nta)n)ng a b*anch * sales utlet shall *ec*d the sale )n the b*anch * sales
utlet ma1)ng the sale and .ay the ta/ )n the c)ty * mun)c).al)ty whe*e the b*anch * sales utlet )s lcated.
')nce %e**ema*- (nc. ma)nta)ns ne +act*y- the sales *ec*ded )n the .*)nc).al ++)ce shall be allcated and
30D + sa)d sales a*e ta/able )n the .lace whe*e the .*)nc).al ++)ce )s lcated wh)le 70D )s ta/able )n the .lace
whe*e the +act*y )s lcated 4'ec. 150- &7C9.
X
5:. 3an)la cannt legally le0y the 2D 7*ss "ece).ts ta/ n the sh)..)ng l)ne- because ta/es n the g*ss
*ece).ts + t*ans.*tat)n cnt*act*s and .e*sns engaged )n the t*ans.*tat)n + .assenge*s * +*e)ght by
h)*e and cmmn ca**)e*s by a)*- land * wate* )s a l)m)tat)n n the e/e*c)se + ta/)ng .we*s by lcal
g0e*nment un)ts 4'ec. 130 4>9. &7C9.
XI
5:. !he .*.e*ty )s e/em.t +*m ",! by 0)*tue + the bene+)c)al use the*e+ by the !)betan mn1s +* the)*
*el)g)us *)tuals and ce*emn)es. A .*.e*ty that )s actually- d)*ectly and e/clus)0ely used +* *el)g)us .u*.ses
)s e/em.t +*m ",! 4'ec. 234- &7C6 'ec. 28439- A*t)cle 4- Cnst)tut)n9. !he test + e/em.t)n +*m the ta/ )s
nt wne*sh). but the bene+)c)al use + the .*.e*ty 4C)ty + Bagu) 0. Busueg- &229772- 'e.t. 18- 19809.
XII
A )s nt ent)tled t cla)m a casualty lss because all + h)s )ncme .a*ta1e the natu*e + cm.ensat)n )ncme.
!a/.aye*s ea*n)ng cm.ensat)n )ncme a*)s)ng +*m .e*snal se*0)ces unde* an em.lye*2em.lyee
*elat)nsh). a*e nt allwed t cla)m deduct)n e/ce.t that allwed unde* 'ec. 34 439 *e+e**)ng nly t the
,2400 health andB* hs.)tal)Aat)n )nsu*ance .*em)um6 .e*+*ce- the cla)m + casualty lss has n legal bas)s
4'ec. 34- 5("C9.
XIII
a9 Ca*us has the .t)n e)the* t cla)m the amunt + )ncme ta/ w)thheld )n #' as a deduct)n +*m h)s
g*ss )ncme )n the ,h)l)..)nes- * t cla)m )t as ta/ c*ed)t 4'ec. 34 4C94194b9- 5("C9.
b9 5. !he )ncme +*m ab*ad + a nn2*es)dent c)t)Aen )s e/em.t +*m the ,h)l)..)ne )ncme ta/6 hence-
the*e )s n )nte*nat)nal ta/at)n n sa)d )ncme 4'ec. 23- 5("C9.
XIV
!he amunt .ayable unde* the ag*eement )s )n the natu*e + a *yalty. !he te*m *yalty )s b*ad enugh t
)nclude cm.ensat)n +* the use + an )ntellectual .*.e*ty and su..ly + techn)cal 1nw2hw as a means +
enabl)ng the a..l)cat)n * en>yment + any such .*.e*ty * *)ght 4'ec. 42449- 5("C9. !he *yalt)es .a)d t the
nn2*es)dent #' c*.*at)n- e?u)0alent t 5D + the *e0enues de*)0ed by ABC +* the use + the .*g*am )n
the ,h)l)..)nes- )s sub>ect t a 30D +)nal w)thhld)ng ta/- unless a lwe* ta/ *ate )s .*esc*)bed unde* an e/)st)ng
ta/ t*eaty 4'ec. 284B9419- 5("C9.
XV
a9 Ges. (ncme t be decla*ed@ ,600-000 4"ental (ncme ,300-000 H 'ala*y ,300-00096 ,e*snal and
Add)t)nal $/em.t)n ,75-000 4Bas)c + ,50-000 H ,25-000 +* ne m)n* ch)ld9.
b9 Ges. "ental )ncme ,600-000 4,300-000 sha*e +* 8anua*y t 8une 2010 H ,300-000 *e.*esent)ng h)s
)nte*est )n the )ncme +*m the .*.e*t)es cm.*)s)ng the estate +* the .e*)d 8uly t Decembe*9. !he
sha*e + the m)n* ch)ld )n the *ental )ncme 4,300-0009 ea*ned a+te* death )s nt )ncluded )n the *etu*n
+ the .a*ent .u*suant t 'ect)n 514$9 + the !a/ Cde.
c9 5. (t has ac?u)*ed n ta/ .e*snal)ty because the estate )s nt unde* >ud)c)al settlement. !he )ncme
+ the .*.e*t)es )s ta/able t the he)*s )n the)* )nd)0)dual ca.ac)ty )n acc*dance w)th the)* *es.ect)0e
)nte*est )n the )nhe*)tance.

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