Taxation Sir Salva

1.
Among the nature of taxation is that it is an inherent power that is an attribute of

sovereignty. Which among the following is not among its manifestation as such an
inherent power?
a. Courts cannot issue an injunction to enjoin the collection of taxes.

b. There should be no improper delegation or the power to tax.
c. Taxes may be imposed even without a constitutional grant.
d. The state has the right to select the subjects and objects of taxation.
2. The President of the Philippines and the Prime Minister of Japan entered into an
executive agreement in respect of a loan facility to the Philippines from Japan
whereby it was stipulated that interest on loans granted by private Japanese
financial institutions in the Philippines shall not be subject to Philippine income tax
laws. What basic characteristics of taxation has been violated by this agreement?
a. Inherent limitation c. Legislative in character

b. Theoretical justice d. Administrative feasibility
3. A fundamental rule in taxation is that, the property of one country may not be taxed
by another country. This is known as:
a. international law. c. reciprocity.

b. international comity. d. international
inhibition.
4. A law was passed by Congress which granted tax amnesty to those who have not
paid income taxes for a certain year without at the same time providing for the
refund of taxes to those who have already paid them. The law is:
a. valid because there is a proper classification.

b. not valid because those who did not pay their taxes are favored over those
who have paid their taxes.
c. valid because it was Congress which passed the law and it did not
improperly delegate the power to tax.
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d. not valid because only the President with the approval of Congress may
grant amnesty.
5. Public money or property may be appropriated:

a. for the use, benefit or support of any sect, church, denomination, sectarian
institution, or system of religion.
b. for the use, benefit or support of any priest, preacher, minister or other
religious teachers, or dignitary as such.
c. for the use, benefit or support of any priest, preacher, minister or dignitary
assigned to the armed forces, or to any penal institution, or government
orphanage or leprosarium.
d. none of the choices.
6. A taxpayer gives the following reasons for refusing to pay a tax. Which of his reasons
is not acceptable for legally refusing to pay the tax?
a. That he has been deprived of due process of law.

b. That there is lack of territorial jurisdiction
c. That the prescriptive period for the tax has elapsed.
d. That he will derive no benefit from the tax.
7. In case of ambiguity, tax laws shall be interpreted:
a. strictly against the taxpayer.

b. liberally against the government.
c. liberally in favor of the taxpayer.
d. liberally in favor of the government.
8. The City of Masbate passed an ordinance imposing a license fee on all motor
vehicles entering the city between the hours of 9:00 a.m and 5:00 p.m. Owners of
motor vehicles assailed the validity of the law. Is the law valid?
a. Yes, because it was issued as a source of revenue.

b. Yes, because it is a legitimate exercise of police power.
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c. No, because it discriminate against those who are not able to pay the
license fee, particularly, the low- salaried employees, and is, therefore,
class legislation.
d. No, because it is not imposed by any other municipality.
9. Which of the following prescriptive period of assessment and collection fails under
normal or regular prescriptive period?
a.Taxpayer filed a return and the return filed is not false or fraudulent. b.
Taxpayer failed to file a return.
c. Taxpayer filed a false return with intent to evade tax.
d. Taxpayer filed a fraudulent return with intent to evade tax.
10. What is the prescribed minimum percentage of compromise in case of doubtful

validity of the assessment?
a. 40% of basic assessed tax c. 30% of the basic assessed tax

b. 30% of the basic assessed tax d. 10% of the basic assessed tax
11. An internal Revenue Officer is allowed only how many days from the date of receipt
of an LA by the taxpayer to conduct the audit and submit the required report of
investigation?
a. 30 days c. 120 days
b. 60 days d 180 days
12. Which tax cases need not be covered by an LA?
I- Cases involving civil or criminal tax fraud which fall under the jurisdiction of
the National Investigation Division (NID) under the Enforcement and
Advocacy Service (EAS) of the BIP.
II- Policy cases under audit by the special teams in the National Office.
a. Both I and II c. I only

b. Neither I nor II d. II only
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13. If the protest is denied, in whole or in part, by the Commissioner’s duly authorized
representative, the taxpayer may:
I- Appeal to the Court of Tax Appeals (CTA) within thirty (30) days from
date of receipt of the said decision.
II- Elevate his protest through request for reconsideration to the
Commissioner’s within thirty (30) days from date of receipt of the said decision
a. Either I or II c. I only
b. Neither I nor II d. II only
14. If the protest is not acted upon by the Commissioner’s duly authorized
representative within one hundred eighty (180) days counted from the date of filing
of the protest in case of a request for reconsideration; or from date of submission by
the taxpayer of the required documents within sixty (60) days from the date of filing
or the protest in case of a request for reinvestigation, the taxpayer may:
I – Appeal to the CTA within thirty (30) days after the expiration of the one hundred
eighty (180) day period.
II- Await the final decision of the Commissioner’s duly authorized representative on
the disputed assessment.
a. Either I or II c. I only
b. Neither I or II d. II only
15. A taxpayer paid excessive tax on April 15, 2000. On December 20, 2001, she filed a
written claim for refund. Her claim was denied by the BIR and she received the
denial on March 2002. She filed a motion for reconsideration with the BIR on March
31, 2002. On April 18, 2002, She received the final denial of the BIR. What will be the
taxpayer’s remedy?
a. File another motion for reconsideration with the BIR within 30 days after
the receipt of the final denial.
b. File an appeal with the court of Tax Appeals within 30 days after the receipt
of the final denial.
c. File an appeal with the Court of Tax Appeals within 15 days after the receipt
of the final denial.
d. The taxpayer has no more remedy against the final denial.
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16. First statement: within three (3) years from the date of filing or any return,
statement of declaration, the same may be modified, changed, or amended.
Second statement: The modification, change or amendment to any return,
statement of declaration filed is allowed if no notice for audit or investigation of such
return, statement or declaration has in the meantime been actually served upon the
taxpayer.
a. Both statements are correct
b. Both statements are incorrect
c. Only the first statement is correct
d. Only the second statement is correct
17. First statement: The CTA may sit en banc or in three (3) Divisions, each division
consisting of three (3) Justices.
Second statement: Five (5) Justices shall constitute a quorum for sessions en banc and
two (2) Justices for session of a Division.

18. The seizure by the Government of personal property to be sold in a public sale to
enforce payment of taxes that are not voluntarily paid is called:
a. Distraint c. forfeiture
b. levy d. lien
19. The taxpayer is a married nonresident alien engaged in business in the Philippine
with two (2) qualified dependent children. His country gives a nonresident Filipino
with income therefrom a basic personal exemption to total personal exemptions of:
a. P 100,000 c. P50, 000
b. P 70,000 d. None of the choices
20. Using the same data in the preceding number except that the data are for 2018, how
much are the total personal exemptions?
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a. P100,000 c.P50,000
b. P70,000 . d. None of the choices
21. In 2017, Juancho procures Health Insurance Policy for his married brother, Jericho,
paying a total amount of P6,000.00 for the year. Juancho’s gross business income
for the same year is P250,000. When he files his income tax return, Juancho deducts
P2,400.00 fromhis gross income representing the premium payment he made for
the Health insurance policy of his brother. Is the deduction for premium payment
made by Juancho proper?
a. Yes, because his gross income does not exceed P250,000 making him
qualified to claim such deduction.
b. No, because premium on health and/or hospitalization insurance is
deductible if taken by the taxpayer for himself, including his family and
paid for during the taxable year.
c. Yes, because the amount deducted does not exceed the allowable
deduction for premium on health and/or hospitalization insurance.
d. No, because Juancho’s civil status is not mentioned.
22.An international carrier doing business in the Philippines shall pay an income tax of:
a. three percent (3%) on its gross receipts.
b. two and one-half percent (2½ %) on its Gross Philippine Billings.
c. two percent (2%) on its Gross Philippine Billings.
d. one and one-half percent (1½%) on its gross receipts.
The following data were provided by an international air carrier:
Freight and cargo fees (cargo originating from the

Philippines in a continuous and uninterrupted flight to
Japan, passage documents sold in Japan) P5,000,0
00
Mail fees (mail originating from Japan in a continuous and
uninterrupted flight to the Philippines, passage documents 4,000,00
sold in the Philippines) 0
Advance payments for cargo originating from the
Philippines in a continuous and uninterrupted flight to
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Singapore (passage documents sold in Singapore) 3,000,00
0
Receipts from sales of tickets passengers originating from
the Philippines in a continuous and uninterrupted flight to
Hongkong (tickets sold in the Philippines) 2,000,00
0
Expenses, Philippines 1,500,00
0
23. How much is the income tax due from the international air carrier doing business in
the Philippines?
a. P250,000 c. P200,000
b. P240,000 d. None of the
choices
24. How much is the common carrier’s tax due from the international air carrier?
a. P250,000 c. P200,000
choice
25. Which of the following statements is incorrect?

a. Resident foreign corporations are subject to income tax based
on net income from sources within the Philippines.
b. Domestic corporations are subject to income tax based on net
income from
all sources.
c. Nonresident foreign corporations are subject to income tax
based on the net from sources within the Philippines.
d. Private educational corporations are subject to income tax
based on the net
income from sources within the Philippines at the tax rate of 10%.
26. Which of the following will constitute a taxable income?

a. Prize won in an essay contest the recipient joined
b. The Nobel Peace Prize
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c. Prize won as most valuable amateur player in an international
sports competition
d. Award not exceeding the amount set by law for being a model
employee
27. During an unusually strong typhoon in 2012, a warehouse was destroyed. The
owner filed a claim of P1,000,000, the book value of the warehouse, against the
insurance company. The insurance company was willing to pay P600,000. Finally,
the claim was settled in 2014 for P750,000, the insurance company paying that
amount in the same year.
When would the loss of P250,000 be deductible?
a. 2012 c. 2014
b. 2013 d. None of the choices
28. In 2018, Mr. Kenneth Lim owns a nightclub and videoke bar, with gross
sales/receipts of P2,500,000.00. His cost of sales and operating expenses are
P1,000,000.00 and P600,000.00, respectively, and with non-operating income of
P100,000.00.
Question 1 – Can Mr. Lim have an option to avail of the 8% income tax rate?
a. Yes, because his gross sales/receipts do not exceed the VAT threshold.
b. No, because his business income is subject to Other Percentage Tax under
Section 125 of the Tax Code, as amended.
c. Yes, because individual taxpayers are always given the option to be taxed at 8%
income tax rate.
d. No, because he is not VAT-registered.
29. How much is the income tax due?

a. P200,000 c. P120,000
b. P190,000 d. None of the choices
30. Using the same data in the preceding number, how much is the Other Percentage
Tax?
a. P450,000 c. P75,000
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31. Under the TRAIN Law, the income tax due from compensation income is:
a. based on graduated income tax rates under Section 24 (A)
b. 8% income tax rate on gross sales/receipts and other non-operating
income in excess of P250,000
c. either graduated income tax rate of 8% income tax rate on gross
sales/receipts and other non-operating income in excess of P250,000
d. Based on taxable income after deducting expenses and exemptions
32. Under the TRAIN Law, Philippine Charity Sweepstakes and Lotto winnings received
by residents or citizens shall be: exempt from income tax.
a. subject to 20% final tax except Ten thousand pesos (10,000) or less from
Philippine Charity Sweepstakes and Lotto which shall be exempt. b. subject to
20% final tax without exception
c. subject to 20% final tax if less than Ten thousand pesos (P10,000)
33. Under the TRAIN Law, the number of pages of Corporate Income Tax Return (ITR)
shall be:
a. six c. four
b. five d. two
34. Under the TRAIN, the books of accounts shall be audited and examined yearly by
independent Certified Public Accountants and their income tax returns
accompanied with a duly accomplished Account Information Form (AIF) which shall
contain, among others, information lifted from certified balance sheets, profit and
loss statements, schedule listing income-producing properties and the
corresponding income therefrom and other relevant statements if the:
a. gross annual sales, earnings, receipts or output exceed Three million

pesos
(P3,000,000)
b. gross quarterly sales, earnings, receipts or output exceed Three million
pesos
(P3,000,000)
c. gross annual sales, earnings, receipts or output amount to Three million
pesos (P3,000,000) ormore.
d. gross quarterly sales, earnings, receipts or output exceed One Hundred
Fifty Thousand (P150,000)
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35. First statement: On or before the end of the calendar year but prior to the payment
of the compensation for the last payroll period, the employer shall determine the
tax due from each employee on taxable compensation income for the entire taxable
year in accordance with Section 24 (A).
Second statement: The difference between the tax due from the employee for the entire
year and the sum of taxes withheld from January to November shall either be withheld
from his salary in December of the current calendar year or refunded to the employee
not later than January 25 of the succeeding year.
a. Both statements are correct.

36. Which of the following statements is incorrect?

a. Considering that taxes withheld by the withholding agents are held in trust for
the government and its availability is an imperious necessity to ensure sufficient
cash inflow to the National Treasury, withholding agents shall file BIR Monthly
Remittance Form (BIR Form No. 0619E and/or 0619F) every tenth (10 th) day of
the following month when the withholding is made, regardless of the amount
withheld.
b. For withholding agents using EFPS facility, the due date is on the fifteenth (15 th)
day of the following month.
c. Withholding agents with zero remittance are not required to use and file the
same Monthly Remittance Form.
d. None of the choices.
37. The books of account are required to be audited and examined yearly by an
independent CPA if the gross quarterly sales, earnings, receipts or output exceed:
a. P5,000,000 c. P2,500,000
b. P3,000,000 d. P1,500,000
38. for income tax purposes, the examination and inspection of the books of account
and records shall be made only once in a taxable year except when:
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a. Fraud, irregularity or mistakes, as determined by the Commissioner b The
taxpayer requests reinvestigation
c Verification of compliance with withholding tax laws and regulations d
All of the choices
39. Receipt or invoice is issued, at least in duplicate, at the time the transaction is
effected for each sale or transfer of merchandise or for services rendered valued at:
a. P50 or more c. P200 or more
b. P100 or more d. P250 or more
40. Mr Emilio Nario contributed campaign fund money to OtsoDiretso. OtsoDiretso duly
reported to the COMELEC the campaign contributions and were fully utilized during
the campaign.
First statement: The campaign contribution of the donor is not subject to donor’s rax.
Second statement: The campaign contribution is not taxable to OtsoDiretso.
b. Both statements are incorrect c Only the first statement is correct
d Only the second statement is correct
41. Mr. Octavio Paz transferred his properties to his relatives due to his poor health
thinking that he is going to die soon. This is an example of: a transfer with retention
or reservation of certain rights. b transfer passing under general power of
appointment. c transfer for insufficient consideration d transfer in contemplation of
death
42. Mr. X died. He was survived by his wife and children. The couple had exclusive and
common properties. The gross estate of Mr. X would include:
a. common and capital properties b common and paraphernal properties c
common, capital and paraphernal properties
d common properties only
43. In the absence of a marriage settlement, or when the regime agreed upon is void,
the property relations of the spouses who married before August 3, 1988 shall be
governed by:
a. conjugal partnership of gains b absolute community of properties c
complete separation of properties d none of the above
44. The following are the requisites for varnishing deduction to be allowable, except
one.
a. The estate tax of the prior succession must have been finally determined and
paid
b. The present decedent died within five (5) years from date of death of the prior
decedent
c. The property with respect to which deduction is sought can be identified as
having been received by the present decedent from the prior decedent.
d. The property must have formed part of the gross estate situated outside the
Philippines of the prior decedent.
45. A resident citizen had a family home in the Philippines. He worked abroad and was
temporarily absent from his family home when he died in 2018. The executor of the
estate inquired from you whether or not to claim finally home deduction from the
gross estate for Philippines estate tax purposes. What would you tell him?
a. The estate would not be allowed family home deduction because he was abroad
when he died.
b. The estate would not be allowed family home deduction because he was a
nonresident citizen when he died.
c. The estate would be allowed finally home deduction of P10,000,000 because
actual occupancy of the family home was not interrupted or abandoned
because of his temporary absence.
d. The estate would be allowed family home deduction of P1,000,000 because all
decedents were allowed family home deduction.
46.Under the TRAIN Law, the estate tax rate is:

a 6% based on net estate with P250,000 exemption
b 6% based on net estate with no exempt amount c
8% based on gross estate.
d graduated tax rates with P200,000 exemption.
47. The net fruits as well as the income received during the marriage from the
exclusive properties of the spouses are classified as:
I – Conjugal properties under conjugal partnership of gains.
II – Community properties under absolute community of properties.
a. Only I is correct
b. Only II is correct
c. Both I and II are correct
d. Both I and II are incorrect
48. The following date for 2017 are presented to enable you to compute the deductible
funeral expenses:
Gross estate P1,000,000
Actual funeral expenses 70,000
The deductible funeral expense is:

a. P200,000 c. P70,000
b. P100,000 d. P50,000
49. A decedent dies on January 15, 2013. The interment is on January 31, 2013. The
gross estate of the decedent is P2,500,000. The following expenses are presented
to you:
Accountant’s fee in gathering the assets of the decedent
incurred on February 15, 2013 50,000
Lawyer’s fee in representing the estate in case filed on August 70,000 15,
2013
Executor’s fee:
January 15, 2013 to July 15, 2013 120,000
July 16, 2013 to December 31, 2013 120,000
The deductible judicial expenses are:

a. P360,000 c. P170,000
b. P240,000 d. none of the choices
50. Under the TRAIN Law, the estate tax return shall be supported with statement duly
certified to by a Certified Public Accountant is the it shows a gross value:
a. of P5,000,000 or more c. exceeding P2,000,000
b. exceeding P5,000,000 d. exceeding P200,000
51. In case the available cash of the estate is insufficient to pay the total estate tax due,
payment by installment shall be allowed:
a within two (2) years from the statutory date for its payment without civil penalty
and interest. b within two (2) years from the statutory date for its payment without
civil penalty and interest
c within one (1) year form the statutory date for its payment without civil penalty
and interest
d within six (6) months from the statutory date for its payment without civil
penalty and interest.
52. Under the TRAIN Law, the donor’s tax rate is:
a six percent (6%) computed on the basis of the total gifts in excess of Two
hundred fifty thousand pesos (P250,000) exempt gift made during the calendar
year whether the donee is a relative or a stranger.
b six percent (6%) computed on the basis of the total gifts in excess of Two
hundred fifty thousand pesos (P250,000) exempt gift made during the calendar
year where the donee is a relative.
c six percent (6%) computed on the basis of the total gifts without exemption
made during the calendar year when the donee is a stranger
d six percent (6%) computed on the basis of the total gifts in excess of One
hundred thousand pesos (P100,000) exempt gift made during the calendar year
whether the donee is a relative or a stranger
53. A sale, exchange, or other transfer of property made in the ordinary course of
business (a transaction which is a bona fide, at arm’s length, and free from any
donative intent), will be considered as made for an adequate and full consideration
in money or money’s worth and therefore:
a. subject to donor’s tax
b. not subject to donor’s tax
c. subject to estate tax
d. choice not given
54. Under the TRAIN Law, dowries or gifts made on account of marriage and before its
celebration or within one year thereafter by parents to each of their legitimate,
recognized natural, or adopted children to the extent of the first Ten thousand
pesos (P10,000) shall:
a be exempt from donor’s tax
b not be allowed as deduction from gross gifts when the donor is a resident or
citizen
c not be allowed as deduction from gross gifts when the donor is a non-resident
alien
d not be allowed as deduction from gross gifts whether the donor is a resident or
citizen or non-resident alien.
e each parent to each child (P10,000)
55. When an indebtedness is cancelled without any service rendered by the debtor in
favor of the creditor, the forgiveness of debt will result to:
a. taxable income
b. distribution of dividend
c. taxable indirect donation
d. taxable estate
56. A client asked you whether or not to add the gifts made in the previous year to the
gifts made in the current year. What would your answer be?
a The gifts made in the previous year should not be added to the gifts made in the
current year because the computation of the taxable net gifts is cumulative
basis over a period of one calendar year
b The gifts made in the previous year should be added to the gifts made in the
current year because the computation of the taxable net gifts is cumulative
basis over several calendar years
c The gifts made in the previous year should not be added to the gifts made in the
current year because the BIR would have no way of knowing them anyway.
57. Mr. Gerardo Ireneo transfers inter vivosa personal property to his son on March 15,
2016. His son who lives in another province let his father know that he is accepting
the gift on March 31, 2016. The personal property was delivered and received on
April 15, 2016. When shall be the last day to file the donor’s tax?
a. April 14, 2016 c. May 15, 2016
b. April 30, 2016 d. None of the choices
58. A resident citizen has a property situated in Quezon City. His legal residence is in
Masbate City. While in Cebu City on a business trip, he donated his property
situated in Quezon City to a relative who is a long-time resident of Cebu City.
Where will the donor file the donor’s tax return?
a. Quezon City c. Masbate City

b. Cebu City d. Any of the three
cities
59. The decedent is a married man with a surviving spouse with the following data dies
on January 1, 2018:
Conjugal real and personal properties P14,000,000
Conjugal family home 9,000,000
Exclusive properties 5,000,000
Conjugal ordinary deductions (including P200,000 funeral 2,300,000 expenses
and P100,000 judicial expenses)
Medical expenses 500,000
The taxable net estate is:

a. P26,000,000 c. P6,000,000
b. P16,500,000 d. P500,000
60. Using the same data in the preceding number except that the decedent dies on
December 20, 2017, how much is the taxable net estate?
a. P23,200,000 c. P13,150,000
b. P13,350,000 d. P12,850,000
61. Jose made the following gifts:

On June 1, 2017, P150,000 to Anton, his son, on account of his marriage celebrated May
1, 2017
On July 10, 2017, a parcel of land worth P180,000 to his father, subject to the condition
that this father would assume the mortgage indebtedness of Jose in the amount of
P40,000
On September 30, 2018, P250,000 dowry to his daughter Dana, on account of her
scheduled marriage on October 25, 2018, and another wedding gift worth P120,000 on
November 23, 2018.
How much were the total taxable net gifts as of July 10, 2017?
a. P290,000 c. P140,000
62. This refers to any person who is required to register under the provisions of the Tax
Code but failed to register.
a. VAT-registered person c. VAT-exempt person
b. VAT-registrable person d. None of the choices
63. In which of the following cases shall the selling price be deemed inclusive of VAT? I
– If the gross selling price is based on the zonal value or market value of the
property
II – If the VAT is not billed separately
a. I only c. Both I and II
b. II only d. Neither I and II
64. (Business Taxes) Ms. Consuelo Dimagulo receives a package of goods from her
sister who lives in California, United States of America. Ms. Consuelo will use the
goods for personal purposes. She is not VAT-registered. Which of the following
statements is correct in connection with the receipt of a package?
a Ms. Consuelo shall be subject to VAT on importation
b Ms. Consuelo shall not be subject to VAT on importation because she is not
VAT-regsitered c Ms. Consuelo shall not be subject to VAT on importation
but shall be subject to
VAT on sales d
None of the choices
65. Marine food products which include fish and crustaceans are exempt from VAT.
Which of the following is not exempt from VAT?
a. Eels c. Prawns
b. Trout d. Aquarium fish
66. Any person who elects to optionally register under the VAT system, other than
franchise grantees of radio and/or television broadcasting, shall not be allowed to
cancel for the next
a. 5 years c. 2
b. 3 d. 1
67. Which of the following transactions in the course of trade or business requires
actual payment of VAT before an input tax is allowed as tax credit from the output
tax?
a Purchase of services b
Transactions deemed sale
c Domestic purchase of goods for use as raw materials supplied in the sale of
services
d Domestic purchase of goods for use in trade or business for which deduction for
depreciation or amortization is allowed under the Tax Code
68. A VAT-registered domestic carrier operating air, land and sea transport equipment
acquired vehicles for use in its operation to transport goods and cargoes. The
domestic carrier:
a can claim input taxes on the said acquisitions b
cannot claim input taxes on the said acquisitions
c can claim input taxes only on the acquisitions of air and sea transport vehicles d
can claim input taxes only on the acquisition of land transport vehicles
69. Starting January 1, 2018, in proper cases, the Commissioner of Internal Revenue
shall grant a tax credit certificate or refund for creditable input taxes within how
many days from the date of submission of complete documents in support of the
application filed?
a. 130 days . . c. 120 days
b. 125 days d. 90 days
70. Which of the following sale of goods shall be subject to 12% VAT when certain
conditions are met?
Sale of gold to the Bangko Sentral ngPilipinas (BSP)
Sale of raw materials or packaging materials to a nonresident buyer for delivery to a
resident local export-oriented enterprise to be used in manufacturing, processing,
packing or repacking in the Philippines of the said buyer’s goods and paid for in
acceptable foreign currency and accounted for in accordance with the rules and
regulations of the Bangko Sentral ngPilipinas (BSP)
Sale of raw materials or packaging materials to export-oriented enterprise whose export
sales exceed seventy percent (70%) of total annual production
Those considered export sales under Executive Order No. 226, otherwise known as the
Omnibus Investment Code of 1987, and other special laws
a. All of the above c. II and III only
b. II, III and IV only d. III and IV only
71. Which of the following sale of services shall be subject to 12% VAT when certain
conditions are met?
Processing, manufacturing or repacking goods for other persons doing business outside
the Philippines which goods are subsequently exported, where the services are paid for
in acceptable foreign currency and accounted for in accordance with the rules and
regulations of the Bangko Sentral ngPilipinas (BSP)
Services performed by subcontractors and/or contractors in processing, converting, of
manufacturing goods for an enterprise whose export sales exceed seventy percent
(70%) of total annual production
a. I and II c. II only
b. I only d. Neither I nor II
72. If the input tax inclusive of input tax carried over from the previous quarter
exceeds the output tax, the excess input tax shall be:
a credited in every quarter but not to exceed seventy percent (70%) of the output
tax
b carried over to the succeeding quarter or quarters
c disregarded because carry over is no longer allowed under the new regulations
d deducted from income tax due
73. An export sale of orchids and other ornamental plants of a VAT-registered person
is:
a. subject to 12% VAT c. exempt from VAT
b. subject to 0% VAT d. none of the choices
74. Ihaw-Ihawsa Kanto sells roasted chicken to customers who eat inside its restaurant
and to those who take out the roasted chicken.
First statement: The sale of roasted chicken to customers who eat in its restaurant is
subject to VAT.
Second statement: The sale of roasted chicken to customers who take them out is
exempt from VAT.
a Only the first statement is correct b

Only the second statement is correct c
Both statements are incorrect
d Both statements are correct
75. Who of the following is not subject to tax on winnings under Section 126?
a Person who wins in horse races
b Winners from double, forecast/quinella and trifecta bets c
Winners in cockfighting
d Owners of winning race horses
76. Stringing Bee Tony is a Filipino world boxing champion. He will defend his crown in
Manila against the Thai challenger, FerminBuntonghininga. The boxing exhibition is
promoted by Nginateng Promotions wholly owned by Filipinos. You are asked by
the promoters whether or not the boxing exhibition shall be subject to amusement
tax in the Philippines. What will your answer be?
a The boxing exhibition is subject to Philippine amusement tax because only one
of the contenders is a Filipino
b The boxing exhibition is subject to Philippine VAT because boxing involves
professional boxers rendering service using physical faculty.
c The boxing exhibition is not subject to Philippine amusement tax because one of
the contenders is a Filipino, involves world championship and is promoted by a
corporation wholly owned by Filipinos.
d The boxing exhibition is not subject to Philippine amusement tax if a special law
is passed exempting such exhibition from the tax.
77. An individual taxpayer holds shares of stock as investment which he bought from a
publicly-listed company for P500,000. The shares are listed and traded in the local
stock exchange but the corporation is not compliant with the mandatory minimum
public ownership. He sold them for P750,000. To what tax shall the gain be subject?
a ½ od 1% percentage tax
b Capital gains tax c
Value-added tax
d Not subject to any tax
78. Which of the following is incorrect? The percentage tax is:

a a tax on a sale of sale of services b
imposed on a sale of goods c imposed
together with the value-added tax d imposed
together with the excise tax
79. It shall be the duty of every stock broker who effected the sale subject to the tax
imposed under Section 127 (A) to collect the tax and remit the same within:
a twenty (20) days after the end of the quarter b
ten (10) working days after the end of the month c
five (5) days from the date of collection d five (5)
banking days from the date of collection
80. In 2018, Hope, a dealer in securities, sells P1,500,000 worth of shares she holds as
investment. The shares sold are acquired for P1,400,000 and are listed and traded
in the local stock exchange. How much is the business tax due on the sale?
a. P12,000 c. P7,500
b. P9,000 d. None
81-83 A domestic common carrier with Certificate of Public Convenience (CPC) has the
following data for the year 2018:
Gross receipts P3,000,000
Cost of services 1,000,000
Operating expenses 500,000
81. Assuming the domestic common carrier is by land, how much is the common
carrier’s tax?
a. P90,000 c. P45,000
82. Assuming the domestic common carrier is by air, VAT-registered, how much is the
Value-Added Tax?
a. P360,000 c. Not subject to VAT
83. Assuming the entity is allowed to transport passenger but does not have a CPC,
how much is the percentage tax, if any?
a. P90,000 c. P45,000
84. Mr. A has been assessed deficiency income tax of P1,000,000, exclusive of interest
and surcharge, for taxable year 2018. The tax liability has remained unpaid despite
the lapse of June 30, 2020, the deadline for payment stated in the notice and
demand issued by the Commissioner. Payment was made by the taxpayer on
February 10, 2021.
How much is the total amount due on February 10, 2021?
a. P1,498,530.15 c. P1,103,215.08
b. P1,395,315.07 d. None of the choices
85. Company has been assessed deficiency income tax of P1,000,000, exclusive of
interest and surcharge, for taxable year 2015. The tax liability has remained unpaid
despite the lapse of June 30, 2017, the deadline for payment stated in the notice
and demand issued by the Commissioner. payment was made by the taxpayer only
on February 10, 2018. How much is the total amount due on February 10, 2018?
a. P1,762,962.67 c. P1,491,643.83
b. P1,662,140.76 d. None of the choices
86. From the following data, compute the income tax still due from a domestic
corporation engaged in merchandising business. For the calendar year 2018, the
net income per books (after tax) is P850,000, after considering among others:
Interest income from bank deposit P(5,50
0)
Inter-corporate dividends (5,000
)
Gain from sale of shares in a domestic corporation (7,000
)
Net capital loss 2,500
Bad debts written off (6,500
)
Write-off of inventories lost due to spoilage or expiry 12,50
0
Depreciation on appraised value of property 15,00
0
Surcharge and compromise paid in relation to the late filing of 80,00
ITR 0
Contribution to a government exclusively for public purpose 50,00
0
Contribution to Government’s priority program in education 10,50
0
Quarterly income tax payments 65,00
0
Provision for bad debts 8,000
The net income per books should be reconciled with the provisions of the Tax Code,
meaning, items which are not taxable must be excluded, and items which are not
deductible are to be added back.
How much is the next tax due and payable?

a. P231,700 c. P213,550
choices
87. The following are similarities of the inherent power of taxation, eminent domain,
and police power, except one:
a. Each presuppose an equivalent compensation.
b. Affect all persons and property.
c. Interface with private rights and property.
d. Are necessary attributes of sovereignty.
88. Statement 1. The proceeds from the additional two percent (2%) tax on real
property accruing to the Special Education Fund (SEF) shall be automatically
released to the local school boards.
Statement 2. The proceeds of the additional real property tax on idle lands shall accrue
to the respective general fund of the province or city where the land is located.
A. True, true C. False, true
B. True, false D. False, false
89. Which of the following is not correct?

a. Taxes may be imposed to raise revenues or to provide
disincentives to certain activities within the state
b. The state can have the power of taxation even if the
Constitution does not expressly give it the power to tax
c. For the exercise of the power of taxation, the state can tax
anything at any time
d.The provisions of taxation in the Philippine Constitution are grants of power
and not limitations on taxing powers
90. Which of the following statement is incorrect?
a. For the exercise of the power of taxation the state can tax
anything at any time and at any amount.
b. The provisions of taxation in the Philippine constitution are not
grants (directly or indirectly) of the power but rather function as
limitations in the exercise of the taxing power.
c. The state cannot have the power of taxation unless expressly
conferred to it by the Philippine constitution.
d. Taxes may be imposed to raise revenues or to provide
disincentives to certain
activities within the state.
91. The share of each Barangay shall be released, without need of any further action,
directly action, directly to the Barangay treasurer on a quarterly basis within after
the end of each quarter and shall not be subject to any lien or hold back for
whatever purpose.
a. 6 days c. 4 days
b. 5 days d. 7 days
92. A religious order, a lessee of a piece of land, constructed a seminary and church on
a portion of the land. On the portion of the land not used as seminary and church,
it constructed a one-story building that it sub-leased to private individuals selling
religious materials, foods and refreshments. The rent income is used to finance
teaching at the seminary.
Statement 1.The rent income of the religious order is subject to income tax
Statement 2. The exemption from taxation provided in the Philippine Constitution
prohibits the imposition of any tax on the religious order
a. True, true c. True, false

b. False, false d.False,true
93. One of the characteristics of our internal revenue laws is that they are:
a Penal in nature b
Criminal in nature c
Political in nature
d Generally prospective in application although the tax statute may nevertheless
operate retrospectively provided it is clearly the legislative intent.
94. Jose Josue qualified as head of a household for 2015 tax purposes. Mr. Josue’s 2016
taxable income was P200,000 exclusive of capital gains and losses. Mr. Josue had a
net long-term loss of P8,000 in 2016. What amount of this capital loss could Mr.
Josue offset against the 2016 ordinary income?
a Zero c P4,000
b P3,000 d P8,000
95. Under the Philippine Constitution, a non-profit, non-stock educational institution is

exempt from income tax
Statement 1.This exemption from tax applies whether the educational institution is ran
by a religious order or not
Statement 2.The policy consideration for the tax exemption is to encourage the
establishment of educational institutions which is public service oriented and not
profitmotivated
a True, true c True, false b False, false d False, true
96. Which of the following is not an example of excise tax?

a Income tax
b Transfer tax (Estate or Donor’s) c Real property
tax
d Percentage tax (VAT or OPT)
97. Statement 1. AA province, city or municipality within MMA, may levy and collect
an annual tax of one percent (1%) on the assess value of property, which shall be in
addition to the real property tax
Statement 2. The proceeds shall exclusively accrue to the special education fund
a True, true c False, true
b True, false d False, false
98. A non-profit, non-stock educational corporation earned interest on its bank

deposits, on which its information return filed with the Bureau of Internal Revenue
carried the item, there is a certification from the depository bank of the amount of
the interest on which there was no withholding income tax; and there is a
certification from the corporation on the utilization of the income, or the use to
which it is intended.
Statement 1.If is a compliance with the documentation for the exemption, hence, there
is no income tax on the interest income
Statement 2.Even without the documentation, the income is still exempt from income
tax pursuant to the provision of the Philippine Constitution, if it can be shown that
the income was used actually, directly and exclusively for the purpose for which the
corporation was organized a True, true c. True, false
b False, false d. False, true
99. The enforced contributions levied by the state by virtue of its sovereignty on
persons and property within its jurisdiction for the purpose of raising revenues for
the support of the Government and all public needs are referred to as: a Toll c.
License fees
b Taxes d. Special assessment
100. Who among the following has the authority to condone or reduce real property tax
and interest?
a The provincial, City or Municipal Assessor b
President of the Philippines c
SangguniangPanglalawigan d None of the
above
101. One of the characteristics of internal revenue laws is that they are a
Criminal in nature b Penal in nature c Political in nature
d Generally prospective in application
102. One of the characteristics of a tax is that:

a. It is generally limited
b. It is generally assignable
c. It is generally payable in money
d. It is generally based on contract
103. Should there be general failure of crops or substantial decrease in the price of
agricultural or agribased products, or calamity in any province, city, or municipality,
when will the condonation or reduction of real property taxes and interest take
effect?
a. Within 6 months of such incident
b. Within 3 months of such incident
c. For the succeeding year or years
d. No condonation or reduction allowed
104. One of the characteristics of our internal revenue laws is that they are a. Political in
nature
b. Penal in nature
c. Generally prospective in operation although the tax statute may nevertheless
operate retrospectively provided it is clearly the legislative intent
d. Answer not given
105. Pioneer enterprises are exempt from certain taxes for a certain period of time, that
are otherwise not applicable to other enterprises. Which of the following
statement is wrong?
a. This will provide employment opportunities.
b. This is a sound tax incentive for development of the national economy.
c. This violates the constitutional requirement of rule of uniformity and equity in
taxation.
d. This will not involve unconstitutional delegation of the power of taxation even
as certain government agencies, other than the congress of the Philippines, will
determine who qualify as pioneer enterprises.
106. Whose duty is it to furnish the provincial, city or municipal assessor with copies of
all contracts selling, transferring, or otherwise conveying leasing or mortgaging real
property received by or acknowledged before them?
a. Registrar of Deeds & Notaries Public
b. Court and sheriff’s fee
c. Documentary stamp tax and Registration fees
d. None of the above
107. In case of conflict between tax laws and generally accepted accounting principles
(GAAP)
a. Both tax laws and GAAP shall be enforced
b. GAAP shall prevail over tax laws
c. Tax laws shall prevail over GAAP
d. The issue shall be resolved by the courts
Pepe and daughter Mocha died in an accident, Judith, the wife and mother died one day
after the death of Pepe and daughter Mocha. The following were their properties in the
Philippines:
Judith exclusive properties of P5,000,000

Pepe and Judith, community properties of P19,300,000; and Mocha
exclusive properties of P1,200,000.
108. If your answer to No.8 is in the affirmative, the gross estate of Mocha was: a.
P1,200,000
b. P4,825,000
c. P6,025,000
d. P9,650,000
109.The taxable net estate of Mocha was:

a. P4,650,000 c. P4,325,000
b. P1,025,000 d. P700,000
Makasalanan Corporation had the following data during the month of February:
Net income during the month P 40,000

Collections during the month:
From services rendered in January 50,000
From services rendered in February 300,000
From services to be performed in March (advances) 10,000
110. The business tax payable if Makasalanan Corporation is a bus company

a P 12,000 b. 22,800 c. 10,800 d. 21,000
111. Balatan Telephone Company (BATELCO) had the following collections from its
customers during the quarter:
Regular monthly bills P 770,000

Domestic calls 501,600
Overseas calls (outgoing) 533,500
The percentage tax to be remitted by BATELCO during the quarter is –

a P 73,600 b. 48,500 c. 53,350 d. 80,960
112. One of the following is subject to percentage tax – a Long distance call by a
son from Sta. Cruz, Manila to his father in Iloilo City. b Monthly telephone bill from
PLDT.
c Telephone bill on a call by a mother in the Philippines to her son in the
United States.
d Telephone call by Magda in Hongkong to her friend in Manila.
113. Which of the following are valid grounds for the condonation and reduction of real
property taxes?
When there is no bidder in a public auction for delinquent properties
When the highest bid does not suffice the amount of tax delinquencies on the property
for sale
When the President of the Philippines allows such condonation or reduction for public
interest
In case of a general failure of crops or substantial decrease in the price of agricultural or
agribased products, or calamity in any province, city, or municipality
a I, II, III and IV

b I and II only
c III and IV only
d None of the above
114. The following are the similarities of inherent power of taxation, eminent domain
and police power, except one:
a Are necessary attributes of sovereignty
b Interfere with private rights and property
c Affect all persons or the public
d Are legislative in implementation
115. What are the fundamental principles that shall guide real property taxation?
a Real property shall be appraised at its current and fair market value
b Real property shall be classified for assessment purpose on the basis of its actual
use
c Real property shall be assessed on the basis of a uniform classification within
each local government unit
d The appraisal and assessment of real property shall be equitable
e All of the above
116. Tax as distinguished from license fee

a Non-payment does not necessarily render the business illegal
b A regulatory measure
c Imposed in the exercise of police power
d Limited to cover cost of regulation
117. Transformers, electric posts, transmission lines, insulators and electric meters used
by a distributor of electricity (Meralco) should be considered as machinery subject
to real property tax
a True, because these are actually, directly and exclusively used to meet the
needs of the particular industry
b False, because these are not immovable under the Civil Code Article 415 (5)
imposed additional requirements or machinery to be considered immovable
c True, because it is permanently attached to land and buildings
d False, because it is not permanently attached to land and buildings
e None of the above
118. Which statement refers to police power as distinguished from taxation?

a It can only be imposed on specific property or properties
b The amount imposed depends on whether the activity is useful or not
c It involves the taking of property by the government
d The amount imposed has no limit
119. MERALCO installed two oil storage tanks on a lot in Batangas, which it leased from
Caltex. They are used for storing fuel oil for MERALCO’s power plants. Are the
storage tanks real property for purpose of real property tax?
a Yes, because the tanks are permanently attached to the land and it is leased
b Yes, because the tanks are essential and principal element of the industry, work
or activity
c No, because the tanks are not permanently attached to the land
d No, because the tanks are not essential nor principal element of the industry,
work or activity
e None of the above
120. 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 Answer not given
121. Which of the following is not considered as an immovable property subject to real
property tax?
a Land, buildings, roads and constructions of all kinds adhered to the soil
b Trees, plants, and growing fruits no longer attached to the land but still from an
integral part of an immovable
c Mines, quarries, and slag damps, while the matter thereof forms part of the bed,
and waters are running
d None of the above
122. Which of the following is not an example of excise tax

a Transfer tax c. Real property tax
b Sales tax d. Income tax
123. At the time of his death, Palito was a resident of the United States. He left, among
others, shares of stock of a Philippine corporation. The estate tax of the United
States was paid on this property. The Bureau of Internal Revenue (BIR) of the
Philippines seeks to impose the Philippines estate tax on the same property. If the
decedent was a citizen of the Philippines, is the Philippine BIR correct in what it
seeks?
Statement 1. The BIR is correct because the decedent’s estate subject to Philippine
estate tax would include all properties regardless of location.
Statement 2. The BIR cannot allow an exclusion of such properly from the decedent’s
gross estate but can allow tax credit against the Philippine estate tax for the foreign tax
paid.
a Both statement are true
b Both statement are false
c Only statement 1 is true, but not statement 2.
d Only statement 2 is true, but not statement 1.
124. Which of the following is false?

a Machinery that is permanently attached to land and buildings is subject to real
property tax, except those actually, directly and exclusively use for religious,
charitable or educational purposes
b Machinery is not subject to real property tax if it is actually, directly and
exclusively used for educational purposes by a non-stock, non-profit educational
institution
c If the machinery is not permanently attached to the land and building, it is not
subject to real property tax provided that it is not an essential and principal
element of the industry, work or activity
d If the machinery is not permanently attached to the land and building, it is
subject to real property tax provided that it is an essential and principal element
of the industry, work or activity
125. One of the following is not a remedy against double taxation

a. Estate tax credit
b. Vanishing deduction
c. Delivery of property from fiduciary heir to fideicommissary in a
fideicommissary substitution
d. Transfer for public purpose
126. Using the same situation in the preceding number, except that Palito was a
nonresident alien decedent, and adopting the same Statement 1 and 2 is the
Philippine BIR correct in what it seeks?
b Both statement are false
c Only statement 1 is true, but not statement 2
d Only statement 2 is true, but not statement 1
127. Which of the following is not a duty of provincial, city, municipal assessors?
Undertake a general revision of real property assessments within 2 years after the
effectivity of this code and every 3 years there after
a Give written notice of such a new or revised assessment to the person in whose
name the property is declared within 30 days when the real property is assessed
for the first time or when an existing assessment is increased or decreased
b Summon the witnesses administer oaths, conduct ocular inspection, take
desposition and issue subpoena ducestecum
c Summon the owners of the properties to be affected or persons having legal
interest therein and witnesses, administer oaths, and take disposition
concerning the property, its ownership, amount nature and value.
128. Statement 1. The power of taxation is inherent in sovereignty being essential to

the existence of every government. Hence, even if not mentioned in the
Constitution the state can still exercise the power
Statement 2. It is essentially a legislative function. Even in the absence of any
constitutional provision, taxation power falls to Congress as part of the general power of
law-making.
a.True,true c.True,false
b. False, false d. False, true
129. The following are requisites for vanishing deduction, except one. Which is it? a
The property with respect to which deduction is sought can be identified. b The
estate tax of the prior succession must have been finally determined.
c The present decedent died within five (5) years from date of death of the prior
decedent.
d The property must have formed part of the gross estate situated in the
Philippines of the prior decent.
130. Which of the following statements is true?

a All types of local government units have the power to impose real property tax
b Only provinces and cities within Metro Manila may impose real property taxes
c Only provinces, cities as well as municipalities and barangays within Metro
Manila may impose real property taxes
d Only provinces, cities as well as municipalities and barangays within Metro
Manila may impose real property taxes
131. Which of the following is not a scheme of shifting the incidence of taxation?
a The manufacturer transfers the tax to the consumer by adding the tax to the
selling price of the goods sold
b The purchaser asks for a discount or refuses to buy at regular prices unless it is
reduced by the amount equal to the tax he will pay
c Changing the terms of the sale like FOB shipping point in the Philippines to FOB
destination abroad, so that the title passes abroad instead of in the Philippines
d The manufacturer transfers the sales tax to the distributor, then in turn to the
wholesaler, in turn to the retailer and finally to the consumer
132. Which of the following statement is wrong?

a The standard deduction is against the total of exclusive and community estate.
b If the family home is community property, the deduction for family home is ½ of
its value and against the total of exclusive and community estate.
c If the family home is community property, the deduction for family have is ½ of
its value and against gross community estate to arrive at net community estate.
d. None of the above.
133. Choose the best answer

On the rates of basic real property taxes, a province can exceed 1% of the assessed value
of the real property
A province, city or municipality within Metropolitan Manila may levy an annual ad
valorem tax on real property such as land, building machinery and other improvements
not hereinafter specifically exempted
a. True, true c. False, true
b. True, false d. False, false
134. Bongo, single, died in the Philippines leaving a net estate in the Philippines of
P1,200,000 and P1,800,000 in the United States. His estate in the United States
paid an estate tax of P25,000 in that country. The Philippine estate tax due after tax
credit for the estate tax paid to United States is –
a. P 220,000 b.147,000 c. 98,000 d. 110,000
135. Decedent was a citizen of the Philippines.

Exclusive properties P 4,000,000
Conjugal properties including P200,000 GSIS retirement benefit 6,200,000
Funeral expenses 350,000
Judicial expenses within one year from death 300,000
Claims against the estate 400,000
Judicial expenses beyond one year from death 250,000
The estate tax due and payable is:

a. P108,000 c. P276,000
b.P114,000 d. P408,000
136. Which of the following statements regarding the grounds for suspension of
prescriptive period for real property tax is false?
a. The treasurer is legally prevented from the assessment or collection of the tax
b. The taxpayer request for reconsideration and executes a waiver in writing after
the expiration of the period within which to assess or collect
c. The taxpayer is out of the country
d. The taxpayer cannot be located
137. One of the characteristic of a tax is that

a. It is generally based on contract
b. It is generally payable in money
c. It is generally assignable
d. Answer not given
138. Statement 1. In case there is no bidder for the real property advertised for sale,
the local treasurer concerned must sell the real property at a lower amount to
encourage buyers.
Statement 2. At any time provided that it will not exceed 10 years from the date
of forfeiture, the taxpayer or his representative may redeem the property by paying the
full amount of real property tax plus interest and costs of sale
Statement 3. Failure to redeem the property within the prescribe period,
ownership of such property will be fully vested on the local government unit concerned
Statement 4. The full amount of the real property tax, including the interest of
the cost of the sale must be paid before the expiration of the prescribed period to
redeem the property
a. I and III are correct

b. II and IV are correct
c. III and IV are correct
d. I, II, III, and IV are correct
139. Statement 1.The income tax expense in the books of accounts is always the normal
tax
Statement 2.The year-end excess of minimum corporate income tax over the
normal income tax will be in the books of accounts as a deferred charge
a.True, true c.True,false
140. Statement 1. When a property, other than real property in the Philippines classified
as capital asset. is sold, exchanged, transferred for less than full and adequate
consideration in money or money’s worth, the amount by which the fair market
value of the property exceeded the consideration shall be deemed a gift and
subject to donor’s tax and subject to donor’s tax as a general rule.
Statement 2. A sale, exchange or other transfer of property made in the ordinary
course of trade or business shall be considered always as made for an adequate and full
consideration in money or money’s worth and will not result in a gift for donor’s tax
purposes.
a. Both statement are true.

b. Both statement are false.
c. Only statement 1 is true, but not statement 2.
d. Only statement 2 is true , but not statement 1.
141. One of the following is not a remedy against double taxation

a. Estate tax credit
b. Vanishing deduction
c. Delivery of property from fiduciary heir to fideicommissary in a fideicommissary
substitution
d. Transfer for public purpose
142. Who is responsible to transfer title of the forfeited property to the local
government unit concerned without the necessity of an order from a competent
court? a. Registrar of Deeds
b. BIR
c. Local treasurer
d. Secretary of Finance
143. Statement 1.A closely held corporation must file an Improperly Accumulated
Income Tax Return
Statement 2.If a corporation is not a closely held corporation, it can always claim
that it considers its accumulation of profits is proper and the Bureau of Internal
Revenue must show that the accumulation during a year is an improper accumulation.
a. True, true c.True,false
b. False, false d.False, true
144. Case 1. X performed services to Y. He was to be paid P250,000 under a contract

signed by both parties X assigned his right under the contract to Z, his son. Z
collected the 250,000. Is there a donation to Z?
Case 2. A introduced a fried, B to an influential member of the board of directors of
multi-national corporation. B was able to get a profitable contract with the corporation.
B gave A a car by way of appreciation of the help of A. the BIR asserts that the car is
income to A. is the car a donation to A?
Case 3. The chief Accountant of a very profitable hospital was paid a retirement pay
according to the BIR-approved retirement plan of the hospital.in view of his loyalty and
invaluable services, the board of directors resolved to give him a gratuity of one million
pesos over and above his retirement pay. Is there a donation on the million pesos?
Case 4. A rich and famous DOM was in a “live-in” relationship with sexy hospitality
girl. He executed a deed of absolute sale to the girl of an expensive condominium unit
which is their love nest. There was no consideration in money on the transfer. The BIR is
collecting income tax from the girl. Is there a gift to the girl ?
Statement 1. All the transactions and/or events are gift subject to donor’s tax.
Statement 1. One or more of the transactions and/or events are income and therefore,
not subject to donor’s tax.
a. Both statements are correct.
b. Both statements are wrong.
c. Statement 1 is correct, while statement 2 is wrong.
d. Statement 2 is correct, while statement 1 is wrong.
145. Statement 1. In case of failure to pay the basic real property tax, the taxpayer shall
be subject to the payment of interest at the rate of 2% per month on the unpaid
amount or a fraction thereof until the delinquent tax have been fully paid
Statement 2. Within 1 year from the date of sale, the owner of the delinquent real
property shall have the right to redeem the property upon payment to the local
treasurer of the amount of the delinquent tax, including interest thereon, and the
expenses of sale from the date of delinquency to the date of sale, plus interest of not
less than 2% per month on the purchase from the date sale to the date of redemption
a. True, true c.False,true

148. Date of tax erroneously paid June 10, 2016
Date of claim for refund was filed with BIR Mar 3, 2018
Date of BIR decision of denial was received Apr 5, 2018
Last day to appeal to the Court of Tax Appeals is on:
146. Tax of a fixed proportion of the value of the property with respect to which the
taxes assessed and requires the intervention of assessors or appraisers to estimate
the value of such property before the amount due from each taxpayer can be
determined is known as:
a. Specific
b. Ad valorem
c. Special or regulatory
d. Answer not given
147. Donations by a citizen and resident of the Philippines in 2018, as follows:

To Pipoy of property in the Philippines P 200,000
To Pipay, of property outside the Philippines 300,000
The donor’s tax due in the Philippines after credit for the foreign donor’s tax paid is:
a. P5,000 c.P9,000
b.P6,000 d. P12,000
a. June 8, 2019 c. Mar 3, 2019

b. June 10, 2018 d. May 5, 2018
149. Which of the following statements is not correct?

a. An inherent limitation of taxation may be disregarded by the application of a
constitutional limitation;
b. The property of an educational institution operated by a religious order is
exempt from property tax, but its income is subject to income tax;
c. The prohibition of delegation by the state of the power of taxation will still allow
the Bureau of Internal Revenue to modify the rules on time for filing of returns
and payment of taxes;
d. The power of taxation is shared by the legislative and executive departments of
government.
150. For the purpose of determining the statutory threshold of P3million before a
taxpayer becomes liable to the value-added tax (VAT) which of the following
statements is/are correct or incorrect?
Statement 1. A taxpayer who has two or more businesses shall look at the
aggregate of gross sales and/or gross receipt from all his/her own business.
Statement 2. Husband and wife with separate business shall determine their
liability for the value added tax(VAT) based on his or her separate business.
a. Both statement are correct.
b. Both statement are incorrect.
c. Statement 1 is correct, while statement 2 is incorrect.
d. Statement 2 is correct, while statement 1 is incorrect.
151. Statement 1. In case of failure to pay the basic real property tax, the taxpayer shall
be subject to the payment of interest at the rate of 2% per month on the unpaid
amount or a fraction thereof until the delinquent tax have been fully paid
Statement 2. Within 1 year from the date of sale, the owner of the delinquent
real property shall have the right to redeem the property upon payment to the local
treasurer of the amount of the delinquent tax, including interest thereon, and the
expenses of sale from the date of delinquency to the date of sale, plus interest of not
less than 2% per month on the purchase from the date sale to the date of redemption
a. True, true c.False, true

b. True, false d.False, false

a. An inherent limitation of taxation may be disregarded by the application of a
constitutional limitation;
b. The property of an educational institution operated by a religious order is
exempt from property tax, but its income is subject to income tax;
c. The prohibition of delegation by the state of the power of taxation will still allow
the Bureau of Internal Revenue to modify the rules on time for filing of returns
and payment of taxes;
d. The power of taxation is shared by the legislative and executive departments of
government.
153. From the following date, how much will a senior citizen pay for a meal he took
from a VAT-registered restaurant?
Gross receipt (VAT included) P 280,000

a. a. P200,000 c. P250,000
b. b. P224,000 d. P280,000
154. Tax discount for advanced prompt payment of real property tax
a. Fixed rate of 20% of annual real property tax due
b. Any rate not exceeding 20% of annual real property tax due
c. Fixed rate of 2% of real property tax due
d. No such discounts exists
155. Statement 1. A justification for the an accumulation of profits (to avoid the (IAET)
for plant expansion must satisfy the “immediacy test” (actual use within a short
period of time after the accumulation.)
Statement 2. A declaration of dividend within a year, with payment date in the
succeeding year, cannot defeat the IAET in the year declaration of dividend
a.True, true c. True, false
b.False, false d. False, true
156. Gross receipt tax (GRT) is a business tax paid by a.

a. Bank
b. Night club operator
c. Insurance company
d. Gas or water franchisee
157. Statement 1. The Sanggunian concerned shall be obliged, in the aportionmnet and
computation of the special levy, to establish a uniform percentage of all lands
subject to the payment of the tax for the entire district, but it may be fixed
different rates for different parts or section thereof, depending on whether such
land is more or less benefited by the proposed work
Statement 2. The provincial, city or municipal assessor shall make and keep an
updated records of all idle lands located within the area of jurisdiction
158. Statement 1.A general professional partnership is exempt from income tax, but a
partner will be taxable on his share in the partnership net income, that he will
consolidate with his own income from other sources.
Statement 2.A partnership that is not a general professional partnership is taxable
as a corporation, and a partner will report his share in the partnership net income, as
dividend income, whether actually received or not
b. Both statements are wrong
c. The first statement is correct but the second statement is wrong
d. The first statement is wrong but the second statement is correct
159. Three of the following are exempt from the value added tax (VAT). which is the
exception?
a. Sale or lease of goods and services to senior citizens and persons with
disabilities (PWD).
b. Lease of residential unit with a monthly rental not exceeding fifteen thousand
peso (P15,000)
c. Sale of gold to the Banko Sentral ngPilipinas (BSP).
d. Export sales by VAT-registered persons.
160. The following are exempted from real property tax, except
a. Real property owned by the Republic of the Philippines or any of its political
subdivisions except when the beneficial use thereof has been granted for
consideration or otherwise to a taxable person
b. Charitable institutions, churches, parsonages or convents appurtenant thereto,
mosque, non-profit or religious cemeteries and all lands, buildings and
improvements actually, directly and exclusively used for religious, charitable or
educational purposes
c. All machineries and equipment that are actually, directly and exclusively used by
local water districts and government owned or government controlled
corporations engaged in the supply and distribution of water and/ or generation
and transmission of electric power
d. All real property owned by duly registered cooperatives as provided for under
RA 6939
161. Messr.Inherited an income earning property. In 2018, without dividing the

property, they had a net receipts (gross receipts less cost and expenses)of
P230,000 which they deposited in a joint bank account. In 2018, they the money in
the bank to purchase another income-producing property. From the net receipts
of P500,000 in 2019 from the two properties, Messrs. A and B each withdrew
P100,000. Messrs. A and B are brothers. Which of the following statements is
wrong?
a. In 2019, Mr. A and Mr. B each had a net receipts from the properties, taxable to
each as income of individual taxpayers
b. The income of P500,000 in 2019 is income of a partnership, taxable as income of
a corporation
c. In 2019, Mr. A and Mr. B each had an net receipts of P250,000, taxable as
income of an individual
d. In 2019, Mr. A and Mr. B each had a net receipts of P100,000, taxable as income
of an individual
162. A Cooperative association is requesting the BIR exempt it from the payment of the
value-added tax on its purchases of prime commodities from suppliers and
manufacturers for the reason that it is enjoying exemption from all taxes under the
Cooperative Code of the Philippines.
Statement 1. The association is not subject to the value-added tax because the
tax is imposed by law on the seller and not the buyer.
Statement 2. The VAT component of any purchase is not a tax association but
rather a part of the purchase cost hence is no tax to complain about in the first place. a.
Both statements are true.
b. Both statements are false.
c. Statement 1 is true, while statement 2 is false.
d. Statement 2 is true, while statement 1 is false.
163. In the last will a decedent, provided that the properties he leaves must not sold or
disposed of for ten years following his death. He had real estate in his gross estate
as follows:
At the time of death – zonal value of P500,000
At the end of ten years after death
Fair market value – P2,500,000
Declared value in the estate tax return – p1,500,000
Zonal value - P3,000,000
What value will be used for purposes of estate tax?
a. P3,000,000 c. P2,500,000
b. P1,500,000 d. P500,000
164. Statement 1. Raw sugar produced by simple process of conversation of sugar cane
without a need of any of mechanical or similar device is exempt from VAT
Statement 2. Raw sugar refers to muscovado sugar
a. True, true c.False,true

b.True, false d. False, false
165. In 2018, Mr. X and Miss Y inherited income-producing properties from their
mother with a reported value of P1,000,000 to the court and the Bureau of
Internal Revenue, and on which the estate tax was paid. The properties remained
registered in the name of the mother, but the net receipts of P40,000 from the
property was deposited in the joint account of Mr. X and Miss Y. In 2019, the
property had a net receipts of P70,000, from which each withdrew P15,000. In the
same year, they sold the property for P3,000,000. Which of the following
statements is wrong?
a. Mr. X and Miss Y in 2018 each had gross receipts (income) of P20,000 (1/2 of
P40,000) from the property, as individual taxpayers
b. Mr. X and Miss Y become an entity taxable as a corporation beginning 2019
c. Mr. X and Miss Y in 2018 each had a net receipts of P35,000 from the property,
as individual taxpayers
d. Mr. X and Miss Y each had a capital gain tax of on a selling price P1,500,000
166. Statement 1. A characteristic of the value-added tax is that it is a consumption tax

borne ultimately by the users of goods or services.
Statement 2. Tax pyramiding is a situation where some or all of the stages of
distribution of goods or services are taxed with the accumulation eventually borne by
the final consumer, hence contributing to higher prices of goods and services sold.
b. Both statement are incorrect
c. Statement 1 is incorrect but not statement 2.
d. Statement 2 is incorrect but not statement 1
167. Statement 1. Centrifugal process of producing sugar is not in itself a simple

process of conversion of sugar cane
Statement 2. Any type of sugar produced through centrifugal process is not exempt
from VAT
b.True, false d. False, false
168. A Co. is an owner of a large tract of land. B Co. is a construction company. A Co.
and B Co. entered into a consortium under which A Co. will contribute the land, B
Co. will construct subdivision houses on it. A Co. and B Co. will divide the property
(land and houses) between them. A Co. and B Co. will sell their respective shares in
the developed property. Which statement is wrong?
a. A Co. and B Co. do not constitute a taxable entity on the project
b. A Co. and B Co. are not be taxable on their allocated shares (in land and
property) in the developed property
c. A Co. and B Co. is one taxable entity on the sale of all land and houses covered
by consortium agreement
d. A Co. and B Co. are taxable on the sale of the land and houses allocated to
them, as separate taxpayers
169. Ajinomoto, a Japanese residing in the Philippines, bought garments from a

domestic corporation and immediately exported them to japan. Total value of
export is P280,000. The VAT output tax on the transaction is:
a. P30,000
b. P33,600
c. None, because 0% VAT rate applies.
d. None, because the transaction is exempt from VAT.
170. Which of the following is not correct? RA 10378 provided for the exemption of
international carriers on the principle of reciprocity
a. From income tax on their gross revenue derived from the carriage of persons
and their excess baggage
b. From VAT on their carriage of passengers
c. From percentage tax on their carriage of passengers
d. From percentage tax on their carriage of cargoes
171. A person create a trust over property under the following terms and conditions:
Fifty percent (50%) of the annual income before income tax considerations will be
distributed to the beneficiary and the balance of the annual income after income
tax will be accumulated, and turned over to the beneficiary when he turns twenty-
one (21) years of age. In a year, the property had a net income, before distribution
to the beneficiary, of 1,000,000. Which of the following statements is correct?
a. The taxable income for the year of the trust is P480,000
b. The taxable income for the year of the trust is P500,000
c. The taxable income for the year of the trust is P980,000
d. The income for the year of the beneficiary from the trust is P450,000
172. A domestic corporation in a real estate business sold a building.
Statement 1. The sale is subject to the value-added tax because sale of goods
and properties are subject to the value-added tax and real estate it within the meaning
of property.
Statement 2. The sale is not subject to the value added tax because it is not sale
of goods or services.
a. Both statements are true.
d. Only statement 2 is true, but not statement 1.
173. Unless a longer period of retention is required, the independent CPA who audited
the records and certified the financial statements of the taxpayer has the
responsibility to maintain and preserve copies of audited and certified financial
statements for a period
a. Of 10 years from the due date of filing the annual ITR or the actual date of filing
thereof whichever comes later
b. Of 5 years from the due date of filing the annual ITR or the actual date of filing
c. Of 3 years from the due date of filing the annual ITR or the actual date of filing
d. Of 7 years from the due date of filing the annual ITR or the actual date of filing
174. Mr. Monte was injured in a vehicular accident in 2018. He incurred and paid
medical expenses of P20,000 and legal fees of P10,000 during the year. In 2019, he
received P70,000 as settlement from the insurance company which insured the car
owned by the other party involved in the accident. From the above payments and
transactions, the amount of taxableincome to Mr. Monte in 2019.
a. Zero c. P70,000
b. P40,000 d. P50,000
175. Statement 1 – the income tax expense in the books af accounts of all corporations
is always the normal tax at 30% of the taxable income.
Statement 2 – the year-end excess of Minimum Corporation Income Tax(MCIT) over the
normal Corporation Income Tax (NCIT), will be in books of accounts as a Deferred
Charge-MCIT.
a. Both statement are true
b. Both statement are false
c. Statement 1 is true but statement 2 is false
d. Statement 2 is true but statement 1 is false
176. Guidant Resources Corporation, a corporation registered in Norway, has a 50MW

electric power plant in San Jose, Batangas. Aside from Guidant’s income from its
power plant, which among the following is considered as part of its income from
sources within Philippines?
a. Gains from the sale to an Ilocos Norte power plant of generators bought from
the United States
b. Interests earned on its dollar deposits in a Philippine bank under the Expanded
Foreign Currency Deposit System
c. Dividends from a two-year old Norwegian subsidiary with operations in Zambia
but derives 60% of its gross income from the Philippines
d. Royalties from the use in Brazil of generator sets designed in the Philippines by
its engineers
177. If an individual performs services for a creditor who, in consideration thereof,

cancels the debt, the cancellation of indebtedness may amount
a. To a gift
b. To a capital contribution
c. To a donation inter vivos
d. To a payment of income
178. Statement 1 - -every individual who is receiving self-employment income, whether

it constitutes the sole source of his/her income or in combination with
compensation and other fixed or determinable income shall make and file a
declaration of his/her estimated income tax for the current calendar taxable year
on or before May 15 of the same current taxable year.
Statement 2 - the amount of estimated income tax for the current calendar
taxable year shall be paid in four (4) installments as follows:
First installment – on or before May 15
Second installment – on or before August 15
Third installment – on or before November 15; and
Fourth installment – on or before April 15 of the following calendar taxable year when
the final or adjustment annual income tax return covering the previous calendar taxable
year would have been filled.
a. Both statement are correct
c. Statement 1 is correct but statement 2 is incorrect
d. Statement 2 is correct but statement 1 is incorrect
179. Anktryd, Inc., bought a parcel of land in 2009 fro P7 million as part of its inventory
of real properties. In 2010, it sold the land for P12 million which was its zonal
valuation. In the same year, it incurred a loss of P6 million for selling another
parcel of land in its inventory. these were the only transactions it had in its real
estate business. Which of the following is the applicable tax treatment?
a. Anktryd shall be subject to a tax of 6% of P12 million
b. Anktryd could deduct its P6 million loss from its P5 million gain
c. Anktryd’s gain of P5 million shall be subject to the holding period
d. Anktryd’s P6 million loss could not be deducted from its P5 million gain
180. Mr. A, an executive of a company, owed his employer P10,000. For a job well
done, his employer condoned his indebtedness, gave him a round trip ticket for
travel asbroad worth P10,000, and travel expenses P20,000. Which statement is
wrong?
a. The condonation of indebtedness did not result in income to Mr. A because it is
a gift
b. The cost of the round trip ticket is fringe benefit to Mr. A, and not taxable
income of him because he is a managerial employee so that the employer must
have paid a fringe benefit tax on it
c. The travel expenses is fringe benefit to Mr. A, and not taxable income to him
because the employer must have paid a fringe benefit tax on it
d. All amounts given to Mr. A are taxable income to him
181. Statement 1 – individuals enjoying income tax exemption such as those registered
under the Barangay Micro Business Enterprise (BMBEs) are not qualified to avail of
double or multiple tax exemptions under different laws.
Statement 2 – BMBEs are not exempted from the payment of other internal revenue
taxes such as the value-added tax (VAT); the percentage taxes (OPTs) the documentary
stamp taxes costs; and transaction tax etc.
b. Both statement are wrong
c. Statement 1 is correct but statement 2 is wrong
d. Statement 2 is correct but statement 1 is wrong
182. Aplets Corporation is registered under the laws of the Virgin Islands. It has
extensive operations in Southeast Asia. In the Philippines, Its product are imported
and sold at a mark-up by its exclusive distributor, Kim’s Trading Inc. The BIR
compiled a record of all imports of Kim from Aplets and imposed a tax on Aplets
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, Applets 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
183. Mr. P was an insolvent debtor with an obligation of P500,000 to Q Co. Q Co.
agreed to a dacion en pago, receiving property with a fair market value of
P100,000 in payment, with the balance of P400,000 being condoned.
Statement 1.There is no taxable income of P400,000 to Mr. P
Statement 2.There is a gift of P400,000 to Mr. P
a.True,true c.True,false
b.False,false d. False, true
184. Statement 1 – Qualified individuals who availed of the 8% income tax rate shall be
allowed a deduction and/or exemption of the first P250,000 from the gross sales
and/or gross receipts (including other non-operating income) whose sources of
income come from compensation, trade, business and exercise of profession.
Statement 2 – the option to avail of the 8% income tax rate be signified annually on
or before May 15 each calendar taxable year. such election shall be irremovable for said
calendar taxable year unless the gross sales and/or gross receipts (including other
nonoperating income) exceeded the VAT threshold of P 3million in which case the
taxpayerindividual, shall automatically be subject to the graduated income tax rates of
0%-35%. a. Both statement are true
c. Statement 1 is true but statement 2 is false
d. Statement 1 is false but statement 2 is true
185. Passive income includes income derived from an activity in which the earner does
not have any substantial participation. This type of income is
a. Usually subject to a final tax
b. Exempt from income taxation
c. Taxable only if earned by a citizen
d. Included in the income tax return
186. A Co. is in the process of dissolution and liquidation. Mr. A is a stockholder with a
cost to him of P100,000 on his shares of stock. he received a liquidating dividend of
P50,000. What is the tax consequence of his receipts of the dividend?
a. A dividend income P50,000 and a loss of P100,000 in his shares of stock
b. A loss in his shares stock of P50,000
c. A dividend income of P50,000
d. No tax consequence
187. Shares of stock of Sweety Pie Co., a domestic corporation, held as investment by
Benru bought at P1,000,000 cost in mid 2017, are listed and traded in the local
stock exchange. A year later, Benru sold his stockholding thru his stock broker for
P2,850,000, net of a P150,000 commission paid to the agent.
The appropriate tax in the transaction is:
a. P17,100 percentage tax
b. P18,000 stock transaction tax
c. P180,000 final capital gain tax
d. P277,500 final capital gain tax
188. Alain, Descartes, 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. Interests from his deposits in a local bank of foreign currency
earned abroad converted to Philippine pesos
c. Dividends received from an American corporation which derived
60% of its annual gross receipts from Philippines sources for the past 7
years
d. Gains derived from the sale of his condominium unit located in
The Fort, Taguig City to another resident alien
189. Mr. A was a travelling salesman on a salary basis. In the course of his travel, his
own car that he used in travelling was taken by force by bandits. The bandits had
an encounter with the military, and the battle resulted in the death of the bandits
and a total loss of a car. There was no insurance coverage on the car.
Statement 1. The loss can be deducted because it was not compensated by insurance or
otherwise
Statement 2. The loss cannot be deducted because the gross income is gross
compensation income (salary) only
a. True, true
b. False, false
c. True, false
d. False, true
190. Dyango is a professional with gross receipt of P2,000,000 and deductible expenses
of P1,200,000 for the calendar taxable year 2018. How much will be the income
tax to be paid for 2018 by taking into account your best recommendation as Tax
Adviser on the most economical option to avail of in taxing his self-employment
income? a.P110,000
b. P130,000
c. P140,000
d. P160,000
191. On March 30, 2018 Miguel foods Inc. received a notice of assessment and a letter
of demand on its April 15, 2015 final adjustment return from the BIR. Miguel foods
then filed a request for reinvestigation together with the requisite supporting
documents on April 25, 2018. On June 2, 2018, the BIR issued a final assessment
reducing the amount of the tax demanded. Since Miguel Foods was satisfied with
the reduction, it did not do anything anymore. On April 15, 2023 the BIR garnished
the corporation’s bank deposits to answer for the tax liability. Was the BIR action
proper?
a. Yes, the BIR has 5 years from the filing of the protest within which to collect
b. Yes, the BIR has 5 years from the issuance of the final assessment within which
to collect
c. No, the taxpayer did not apply for a compromise.
d. No, without the taxpayer’s prior authority, the BIR action violated the Bank
Deposit Secrecy Law
192.Statement 1. A deduction is an amount of expenses and losses that reduces the

gross income to net income.
Statement 2. A personal or family expense cannot be deducted from gross income
because is not a loss related to business.
a True, true
b False, false
c True, false
d False, true
193. Which of the following statements is false? The Board of Investments

a. Assists Filipino and foreign investors to venture and prosper in desirable areas of
economic activities.
b. Is tasked to promote investments, extend assistance, register, grant incentives
to and facilitate the business operations of investors in export-oriented
manufacturing and service facilities inside selected areas throughout the
country as PEZA Special Economic Zones.
c. Is the lead government agency responsible for the promotion of investments in
the Philippines.
d. Assists Filipino and foreign investors to venture in food processing, construction,
metal products, telecommunications, power and infrastructure projects among
other
194. Which among the following taxpayers is required to use only the calendar year for
tax purposes?
a. Partnership exclusively for the design of government infrastructure projects
considered as practice of civil engineering
b. Joint-stock company formed for the purpose of undertaking construction
projects
c. Business partnership engaged in energy operations under a service contract
with the government
d. Joint account (cuentas en participation) engaged in the trading of mineral ores
195. Statement 1.An asset held only as investment is a capital asset

Statement 2. Asset used in trade or business is ordinary asset
196. Statement 1. Unpaid internal revenue taxes can be collected immediately by the
Bureau of Internal Revenue(BIR) by summary proceedings of Distraint and/or levy
property belonging to the taxpayer.
Statement 2. The Commissioner of Internal Revenue (CIR) is authorized (under the
tax code, as amended) to look into the bank deposit of a decedent to determine gross
estate or to establish the true financial worth of a taxpayer who applied for compromise
of his tax liability by reason of financial incapacity to pay.

b. Both statement are wrong
c. Statement 1 is correct but statement 2 is wrong
d. Statement 2 is correct but statement 1 is wrong
197. Mrs. Evangelista owns a parcel of a land worth P500,000 which was inherited from
her father in 2009 when it was worth P300,000. Her father purchased it in 2017 for
P100,000. If Mrs. Evangelista transfers the parcel of the land to her wholly owned
corporation in exchange for shares of stock of said corporation worth P450,000,
Mrs.
Evangelista’s taxable gain is
a. Zero c.P150,000
b. P50,000 d.P350,000
198. Statement 1. Real estate tax is a local government tax imposed by LGUs, namely:
Cities , provinces, municipalities and barangays.
Statement 2. All internal revenue taxes are imposed and collected by the BIR.
a. Both statement are true

c. Statement 1 is false but statement 2 is true
d. Statement 2 is true but statement 1 is false
199. Statement 1. The Commissioner of Customs (COC) and his subordinates are
automatic agents of the CIR as far as collecting national internal revenue taxes in
imported merchandise in concerned.
Statement 2. The CIR has the power to divide the entire Philippines into districts
for the purpose of an effective enforcement and administration of national internal
revenue taxes and each district created is under the supervision of a BIR Revenue
District Officer (RDO).

200. It is important to know the source of income for tax purposes (i.e., from within or
outside the Philippines) because:
a. Some individual and corporate taxpayers are on their worldwide income while
others are taxable only upon income from sources within the Philippines b. The
Philippines imposes income tax only on income from sources within
c. Some individual taxpayers are citizens while others are aliens
d. Export sales are not subject to income tax
201.Which statement is wrong? For internal revenue erroneously or illegally paid to the
BIR.
a. The taxpayer may file a petition for refund to the BIR within two years from the
date of payment.
b. The taxpayer may appeal to the Court of Tax Appeals only upon receipt of an
adverse decision from the BIR denying his claim for refund.
c. The taxpayer must first file a claim for refund to the BIR and in a given situation
appeal to the Court of Tax Appeals to seek review of his petition for refund even
without awaiting the decision of the BIR
d. The taxpayer may appeal the decision of the Court of Tax Appeals to the
Supreme Court within 15 days from receipt of the adverse decision of the Court
of Tax Appeals.
202. A Filipino citizen derived a dividend income on his shares of stock of an

American corporation in the United States. The United States federal government
imposed an income tax on it. Which of the following statements is correct?
a. There is double taxation

b. The United States income tax payment cannot be claimed as a deduction from
gross income
c. The United States income tax payment can be claimed as tax credit without any
limitation on the amount of such tax credit
d. The United States income tax payment can be claimed as tax credit, but subject
to limitation on the amount of such tax credit
203. Using the same information in the preceding number, except that the date the
BIR decision, denying theclaim for refund, was actually received on May 31, 2018. The
last day to appeal to the Court of Tax appeals is on.
a.April 2, 2018
b. June 10, 2018
c. June 30, 2018
d. July 10, 2018
204. The X Cooperative is requesting the Bureau of Internal Revenue to exempt it

from the payment of the value-added tax on its purchases of prime commodities from
suppliers and manufacturers for the reason that it is enjoying exemption from all taxes
under the Cooperative Code of the Philippines
Statement 1. The X Cooperative is not subject to the value-added tax because tax is
imposed by law on the seller and not on the buyer
Statement 2. The VAT component of any purchase is not a tax on the cooperative, but a
part of its cost of purchase, hence there is no tax to complain of.
a. True, true
b. False, false
c. True, false
d. False, true
205. Which of the following violations of the NIRC of 1997 as amended cannot be
subject to compromise penalties.
a. Keeping two sets of sales invoices or official receipts.

b. Failure to keep and/or preserve books of accounts and accounting records
c. Failure to keep books of accounts and accounting records in a native language
or in English
d. Failure to have books of accounts and accounting records audited by an
independent CPA and have the audited financial statements attached financial
statements attached to the annual tax return filed, if sales and/or gross receipt
is more than P3,000,000.
206. Which statement is wrong? Transactions considered “in the course of trade or
business”, and therefore subject to the business taxes include
a. Regular conduct or pursuit of a commercial or an economic activity by a stock

private organization
b. Regular conduct or pursuit of a commercial or an economic activity by a
nonstock, non-profit private organization
c. Isolated services in the Philippines by non-resident foreign persons
d. Isolated sale of goods or services for a gross selling price or receipts of P800,000
207. A residential house and lot located in the City of Manila have the following fair
market values:
Lot P 5,000,000
House 10,000,000
The assessment levels are 20% for the lot and 50% on the house.
The real property taxes due and payable on the residential house and lot where the city
of manila is imposing the maximum basic real property tax rate is.
a. P 120,000
b. P 135,000
c. P 180,000
d. P300,000
208. Gaby, a Japanese residing in the Philippines, bought garments from ABC Corp., a
domestic corporation, and exported the same to Japan. Total value of export is
P100,000. VAT (output tax) due on the transaction is
a. P10,000
b. P5,000
c. None, because 0% applies
d. None, because the sale is exempt from VAT
An importer wishes to withdraw its importation from the Bureau of Customs. The
imported goods are subject to a 10% ad valorem custom duty. Details of the importation
follow:
Invoice cost of importation in pesos P 1,000,000
Cost of containers and packing 100,000
Cost of freight and insurance up to Philippine port 250,000 Expenses
incurred within the customs premises prior to actual
Withdrawal 150,000
209. The dutiable value of the imported goods is.

a. P 1,000,000 c.P1,350,000
b. P1,000,000 d. P1,500,000
210. the customs duty on the imported goods is.

a. P 150,000 c.P110,000
b. P 135,000 d. P 100,000
211. The value-added tax on the importation is.

a. P 138,000 c.P180,000
b. P 154,200 d. P196,200
212. Statement 1.Tax pyramiding is a situation where some or all of the stages of
distribution of goods or services are taxed, with the accumulation borne by the
final consumer
Statement 2. A characteristic of the value-added tax is that it is a consumption
tax, borne ultimately by the users of goods or services
213. A domestic corporation in real estate business sold a building.

Statement 1. The sale is not subject to the value-added tax because it is not a sale
of goods or services
Statement 2. The sale is subject to the value-added tax because sale of goods and
properties are subject to the value-added tax, and real estate is within the meaning of
property
a. True, true
b. False, false
c. True, false
d. False, true
214. In determining the statutory threshold amount (exceeding which the taxpayer
becomes liable to the value-added tax) Which statement is correct?
Statement 1. A taxpayer who has two or more businesses shall look at the aggregate of
gross receipts from all businesses
Statement 2.Husband and wife with separate businesses determine liability for the
value-added tax based on his or her separate business
a.True, true c. True, false

215. When a purchase with a VAT component is for use in a VAT and non-VAT business,
the VAT paid:
a. The total may be used as input tax of the VAT business
b.The total may be used as tax expense of the non-VAT business
c. The total must be allocated between the VAT and non-VAT business based sales of
the month
d.The total must be allocated between the VAT and non-VAT business at one-half
each
216. An importer wishes to withdraw its importation from the Bureau of Customs. The
imported goods were subjected to a 10% customs duty in the amount of P12, 500
and to other charges in the amount of P9, 500. The value added taxdue is:
a. P12,500 c. P13,750
b. P13,364 d. P17,640
217. When an importation is made by a VAT taxpayer, the added-value tax shall be
based on:
a. Landed cost, if customs and tariff duties are based on quantity or volume;
b. At dutiable value if the customs duty is based on the value of the importation.

218. One of the following is subject to percentage tax – a Long distance call by a son
from Sta. Cruz, Manila to his father in Iloilo City. b Monthly telephone bill from
PLDT. c Telephone bill on a call by a mother in the Philippines to her son in the
United States.
d Telephone call by Magda in Hongkong to her friend in Manila.
219. Statement 1: The Community Tax is a national tax. Statement 2: The
Community Tax is a local tax.

220. Balatan Telephone Company (BATELCO) had the following collections from its
customers during the quarter:
Regular monthly bills P 770,000

Domestic calls 501,600
Overseas calls (outgoing) 533,500
The percentage tax to be remitted by BATELCO during the quarter is –
a. P 73,600 c. 53,350
b. 48,500 d. 80,960
221. One of the following is not a requirement on an individual in order to be subject to

the community tax:
a. An inhabitant of the Philippines

b. Eighteen years of age and above
c. Regularly employed on a wage or salary basis for at least thirty consecutive
working days during any calendar year d.
Is a head of the family
222. One of the following is not required to pay the community taxes, Identify.
a. domestic corporation engaged or doing business in the Philippines
b. A resident foreign corporation engaged or doing business in the Philippines
c. General professional partnerships in the Philippines
d. An estate or trust with income from the Philippines
223. Which of the following statements is wrong: The additional community tax of the
individual (Class B) considers
a. Data of the preceding year

b. Data in the Philippines
c. Income from business, the practice of profession or pursuit of an occupation
d. Assessed value of real property
224. Which of the following statements is wrong?

a Husband and wife each has a basic community tax
b Husband and wife has one additional community tax only, based on the
consolidated data of husband wife
c The basic community tax and the additional community tax must be paid at the
same time
d Even if taxable data in the preceding year were earned in different local
government areas, the additional community tax may be paid to one local
government only
225.Which statement is wrong? The additional community tax of a corporation
(Class C-1)
a. Considers data of the preceding year in the Philippines
b.Considers gross receipts from business only
c.Considers gross income from real property
d.Considers assessed value of real property
226. Statement 1.There are no centavos in the basic community tax and additional
community tax
Statement 2. Centavos in an actual payment of community tax is due to interest for
late payment, as authorized by the law itself
a. True, true c. True,

false
b. False, false d. False,
true
227. Statement 1. Dividend received by an individual from a corporation is not subject

to additional community tax
Statement 2. Dividend received by a corporation from a corporation is subject to
additional community tax

228. Statement 1.The estate tax is a tax on property (a property tax)

Statement 2. The estate tax is a tax on a privilege (an excise tax

229. Statement 1.The estate tax is an excise tax on a person for transmitting his
properties upon his death
Statement 2. The donor’s tax is an excise tax on a person for transmitting his
properties effective while still alive
230. Statement 1.The estate tax accrues upon the death of the decedent-owner of the
properties transmitted by succession.
Statement 2.The estate tax should be paid by the executor or administrator, or the
heir, before title to any register able property may be registered in the name of the heir
to whom it is given by succession.
a. True, true c.True, false
231. The property, rights and obligations of a person which are not extinguished by his
death and those which have been accrued thereto since the opening of the succession
a. Assets c. Estate
b. Capital d. Income
232. Mr. A, a resident citizen, died on the United States leaving the following
properties:
Real properties in the United States
Family home in the Philippines
Office condominium in the Philippines
Shares of stock of a domestic corporation
Cash in bank; and
Personal belongings without any obligation
Statement 1.His gross estate shall include all the properties

Statement 2. His gross estate shall include only the properties in the Philippines

233. Mr. V, a subject of a foreign country, residing in the Philippines, died with the
following properties:
Shares of stock of a domestic corporation
Condominium unit in Metro Manila
House and lot in his home country
Statement 1.His gross estate shall include all the properties

Statement 2.His gross estate shall include only the properties in the Philippines

234. Mr. W, an American residing in Taipeh, died leaving the following properties Real
property in the United States
A resort in Italy
Shares of stock in a Taipeh corporation with business in Taipeh only
Shares of stock of a Taipeh corporation, operating in, and with office at, the Philippines
Time deposit with a Philippine bank
Philippine treasury bills
Lease contract on his real property in the United States, leased to the Philippine
consulate
Statement 1. His gross estate shall include all the properties

Statement 2. His gross estate shall include only the properties in the Philippines

235. Mr. D owned one hundred hectares of agricultural land. The Government took
nine hundred ninety-five hectares under the Agrarian Reform Act, with payment
for it not yet received. Mr. D died. What value shall be included in his gross
estate?
a One hundred hectares of agricultural land
b Five hectares of agricultural land plus the amount receivable from the
Government on the appropriation of ninety-five hectares c
Five hectares of agricultural land
d None
236. Proceeds of life insurance includible in the taxable gross estate a Insurance
proceeds from SSS or GSIS
b Amount receivable by any beneficiary irrevocable, designated in the policy by
the insured
c Amount receivable by any beneficiary designated in the insurance policy d
Proceeds of group insurance taken out by a company from employees
237. Proceeds of life insurance policy taken out by the decedent on his own life are
includible in the gross estate if the beneficiary is: Which is wrong?
a The estate, whether the designation of is irrevocable revocable b The executor
or administrator, whether the designation is revocable or irrevocable
c A third person and the designation is revocable d
A third person and the designation is irrevocable
238. For the death of a father in an airplane crash, the children received insurance
proceeds of P350,000 by the insurer and airline:
Statement 1.The P350,000 shall be included in the gross estate because it was a
receivable at the time of death
Statement 2.The P350,000 shall not be included in the gross estate because the life
insurance was not taken out by the decedent himself on his own life

239. The widow of Mrs. A received P500,000 under a life insurance of her husband.
Must the proceeds of life insurance be included in the gross estate?
Which statement is wrong?
a Yes, if the estate, executor or administrator of Mr. A was designated as
revocable beneficiary
b Yes, if the estate was designated as irrevocable beneficiary c Yes, if Mrs. A
was designated as revocable beneficiary
d Yes, if it was Mrs. A who insured Mr. A, and her designation as beneficiary was
irrevocable
240. Mr. Q A provided in his last will and testament that the properties he would leave
should not be sold or disposed of for a period of ten years after his death, and
that his property be given to Mr. R after such period. The value of the properties
increased from P2,000,000 at the time of death to P3,000,000 ten years after
death. Which statement is correct?
a. The Commissioner of Internal Revenue will assess the estate tax on a value of
P2,000,000
b. The Commissioner of Internal Revenue will assess the estate tax on a value of
P3,000,000
241. A taxpayer who inherited properties could not pay the estate tax on the original
due date. He asked for extension of time as he had to sell some properties to have
cash with which to pay the estate tax. The Bureau of Internal Revenue agreed to
the petition for extension, provided that the valuation of the gross estate be as at
the last day of the period of extension. Was the position of the Bureau of Internal
Revenue correct?
a. No, because the estate must be valued at its fair market value at the
time of death, regardless of when the estate tax may be collected
b. Yes, because the Bureau of Internal Revenue had to wait for the last day
of the extension period before it could proceed to collect
242. Mr. D owned one hundred hectares of agricultural land. The Government took
nine hundred ninety-five hectares under the Agrarian Reform Act, with payment
for it not yet received. Mr. D died. What value will be included in his gross estate?
a. One hundred hectares of agricultural land
b. Five hectares of agricultural land plus the amount receivable from the
Government on the appropriation of ninety-five hectares c. Five hectares
of agricultural land
d. None
243. Statement 1 .A donation inter vivos is subject to estate tax

Statement 2. A donation mortis causa is subject to estate tax
a. True, true c. True,

false
b. False, false d. False,
true
244. Mr. D, with stage three cancer, made a last will and testament disposing of
properties mentioned in the last will and testament. On the same day, he made
gifts inter vivos to his children. A few days later he died. Are the donated
properties to be included in the gross estate?
a No, because they were not his properties anymore at the time of death b Yes,
because the donations were donations mortis causa, and must be governed by
the rules on estate tax
c No, if the donor’s tax had been paid already on the donations d No,
because they were not transfers in contemplation of death, since the
donations were not simultaneous with the execution of the last will and
testament
245. Mr. N died leaving a painting to his son Mr. O by last will and testament. The will
of Mr. N gave Mr. O the power to appoint by will Mr. P as successor to the
painting. When Mr. O died, Mr. P succeeded to the property. Which answer is
wrong?
a The value of the painting must be included in the gross estate of Mr. N b The
value of the painting must be included in the gross estate of Mr. O c The
value of the painting must not be included in the gross estate of Mr. O d Mr. P is
succeeding to the estate of Mr. N and not of Mr. O
246. The following are transactions and acquisitions exempt from transfer tax except:
a Transmission from the first heir or donee in favor of another beneficiary in
accordance with the desire of the predecessor
b Transmission or delivery of the inheritance or legacy by the fiduciary heir or
legatee to the fideicommisary
c The merger of usufruct in the owner of the naked title
d All bequests, devises, legacies or transfers to social welfare, cultural and
charitable institutions.
247. Mr. B maintained a joint account with Mrs. B in a bank with authority to withdraw
either by Mr. B or Mrs. B (“and/or account”). Mr. B died and the Bureau of
Internal Revenue included the cash in the bank in that account in the gross estate
of Mr. B. Mrs. B objected on the ground that the account is not really a joint
account, and the balance in the account was allowed by the bank to be withdrawn
already by Mrs. B.
Statement 1. The Bureau of Internal Revenue was correct. Joint properties, (conjugal or
community) are includible in the gross estate of the person who died
Statement 2. The bank was in error in allowing the withdrawal of the deposit if it had
knowledge of the death of Mr. B, and the Bureau of Internal Revenue will not be
precluded from collecting the tax by error of the bank.

248. Makasalanan Corporation had the following data during the month of February:
Net income during the month P 40,000

Collections during the month:
From services rendered in January 50,000
From services rendered in February 300,000
From services to be performed in March (advances) 10,000 The
business tax payable if Makasalanan Corporation is a bus company
a. P 12,000 c.10,800
b. 22,800 d. 21,000
249. The following are the requisites in order that claims against the decedent’s estate
maybe deductible, except:
a. They must be existing against the estate
b. They must be reasonably certain as to amounts
c. They must have been prescribed
d.They must be enforced by the claimants
250. Y, a Filipino resident, died on November 5, 2018 and his estate incurred losses due
to 1st loss: From fire on February 2, 2018 of improvement on his property not
compensated by insurance
2nd loss: From flood on February 25, 2019 of household furniture also not compensated
by insurance
a. 1st loss is not deductible and 2nd loss is deductible

b. Both losses are not deductible
c. Both losses are deductible from gross estate
d. 1st loss is deductible and 2nd loss is not
251. On the property lost even before he died, the property would not be included
anymore in the gross estate. If the property is not included in the gross estate, the
loss of the property is not deductible from the gross estate. The following are the
requisites for vanishing deduction, except one:
a The estate tax of the prior succession must have been finally determined b The
present decedent died within five (5) years from the date of death of the prior
decedent
c The property with respect to which deduction is sought can be identified d
The property must have formed part of the gross estate situated in the
Philippines of the prior decedent
252. Rudolfo, a citizen of the Philippines and resident of Bacolod City, died testate on
May 10, 2015. Among his gross estate are properties inherited from his deceased
father who died on April 4, 2012. What percentage of deduction will be used in
computing the amount of vanishing deduction?
a. 80% of the value taken as basis for vanishing deduction
b. 100% of the value taken as basis for vanishing deduction
c. 60% of the value taken as basis for vanishing deduction
d. 40% of the value taken as basis for vanishing deduction
253. Statement 1. The underlying reason for vanishing deduction is to offer a relief
from heavy burden of taxation if the same property is subjected to two estate
taxes within a short period of time because of proximate dates.
Statement 2. In order that there can be vanishing deduction, the estate tax on a prior
succession must have been previously finally determined and paid

254. Which of the following is false regarding registration of enterprises with the Board
of Investments?
a Any order or decision of the Board shall be final and executory after thirty (30)
days from its promulgation.
b If the application is denied by the Board, the applicant may appeal said order or
decision to the Office of the President.
c Where an appeal has been filed, said order or decision shall be final and
executory ninety (90) days after the perfection of the appeal, unless reversed. d
Applications for registration filed shall be considered automatically approved if
not acted upon by the Board within thirty (30) working days from official
acceptance thereof
255. One of the following statements is false. Which is it?

a Foreign owned firms are nor eligible to register their activity with the BOI.
b Filipino enterprises are eligible to register their activity with the BOI if their
project is listed as a preferred project in the current Investment Priorities Plan
(IPP).
c An activity which is not listed with the BOI may also be entitled to incentives if
at least 50% of the production is foe export (for 60% Filipino and 40%
foreignowned enterprises).
d An activity of more than 40% foreign-owned enterprises which is not listed with
the BOI may also be entitled to incentives if at least 70% of its production is for
export
256. At the time of his death, Mr. A was a resident of the United States. He left, among
others, shares of stock of a Philippine corporation. The estate tax of the United
States was paid on this property. The Bureau of Internal Revenue of the
Philippines seeks to impose the Philippine estate tax on the same property. If the
decedent was a citizen of the Philippines, is the Philippine Bureau of the Internal
Revenue correct in what it seeks?
Statement 1.The Bureau of Internal Revenue is correct because his estate subject to
Philippine estate tax would include all properties regardless of locaton Statement 2.The
Bureau of Internal Revenue, cannot allow an exclusion of such property from the gross
estate but can allow only a tax credit against the Philippine estate tax for the foreign
estate tax paid
257. Mr. A died with a receivable from Mr. B. Mr. B has properties worth P220,000 and
obligations of P320,000. Included in the obligation of Mr. B are P20,000 owed to
the Government of the Republic of the Philippines for unpaid taxes and to Mr. A
of P60,000 The estate of Mr. A has a deduction for claim against insolvent of:
a P60,000 c. P20,000
b P41,250 d. P 0
258. Mr. B died on June 30, 2018, leaving, among others, the following changes and
obligations: Real property tax for the calendar year 2018 - P20,000, On an
interestbearing promissory note (notarized): face value of the note – P10,000;
accrued interest on the note at the time of death – P600; and interest to accrue
on the note from the date of death to the date of maturity – P400. The deduction
from the gross estate is
a. P20,6000 c. P31,000
b. P30,600 d. P21,000
259. The following are requisites for vanishing deduction, except one:
a. The estate tax of the prior succession must have been finally determined
b. The present decedent died within five (5) years from date of death of the
prior decedent
c. The property with respect to which deduction is sought can be identified
d. The property must have formed part of the gross estate situated in the
Philippines of the prior decedent

a. If the family home is community property, the deduction for family
home is ½ of its value, and from gross community estate to arrive at net
community estate;
b. If the family home is community property, the deduction for family
home is ½ of its value, and from the total of exclusive and community estate. c.
The standard deduction is against the total of exclusive and community estate
261. The following are the requisites of a donation for purposes of the donor’s tax,
except one:
a. Capacity of the donor
b. Capacity of the done
c. Delivery of the subject matter of gift
d. Donative intent
262. Mr. Tan was the President of highly profitable corporation which was engaged in
the marketing of Mercedes Benz. When Mr. Tan’s daughter got married to the son
of a Senator, the corporation gave the newly-wedded couple a brand new
Mercedes Benz sedan worth P2,000,000 and entered the wedding gift in its books
as an advertising expense.
1st Statement: The Mercedes Benz is not taxable income to the couple because it is truly
a wedding gift, but they must pay gift tax
2nd Statement: The donor corporation must pay the donor’s tax and deduct it from its
gross income
a. Both statements are true
b. Both statements are false
c. First statement is true while second statement is false
d. First statement is false while second statement is true
263. Which of the following examples is not taxable in 2018?

a A, Filipino citizen donated a parcel of land located in the Philippines to B, a
nonresidentalien
b On June 1, 2018, A made a gift of P20,000 to his daughter on account of her
marriage celebrated on May 1, 2018
c Mr. Ramos gives his wife a diamond ring worth P100,000 as a birthday
d A and B are the only heirs of C. A renounces his share of inheritance in favor of B
264. Case A. Mr. Z performed services to Mr. Y, and he was to be paid P50,000 under a
contract signed by both parties. Mr. Z assigned his right under the contract to Mr.
X, a son. Mr. X collected the P50,000. Is there a donation to Mr. X?
Case B. Mr. B introduced a friend, Mr. C to an influential member of the Board of
Directors of a multi-national corporation. Mr. C was able to get a profitable contract
with the corporation. Mr. C gave Mr. B a car by way of appreciation of the help of Mr. B.
The Bureau of Internal Revenue asserts that car is income to Mr. B. Is the car a donation
to Mr. B?
Case C. The chief accountant of a hospital, upon his retirement, was paid a
retirement pay according to the retirement plan of the hospital. In view of his loyalty
and invaluable services, the Board of Directors resolved to give him a gratuity of one
million pesos over and above his retirement pay. Is there a donation on the one million
pesos?
Case D. Mr. M was in a “live-in” relationship with a hospitality girl. He executed a
deed of sale to the girl of the condominium unit which is their love nest. There was no
consideration in money on the transfer. The Bureau of Internal Revenue is collecting the
income tax from the girl. Is there a gift to the girl?
Statement 1. All the transactions/events are gifts subject to the donor’s tax
Statement 2. One or more of the transactions/events are income, and not subject to the
donor’s tax
265. Mr. D sold properties as follows:
Real property, with a cost of P100,000, sold to a brother. The selling price was
P600,000Shares in a wholly owned corporation, with a cost of P1,000,000, but at the
time of sale with a book value of P3,000,000 and a fair market value of P5,000,000, sold
to executives of the corporation so that they would have a stake in, and hence, loyalty
to the corporation. The selling price was at book value.
Statement 1.The transactions have donor’s tax consequences because they are gifts
Statements2.The transactions have income tax consequences because gains accrue to
Mr. D if his selling prices are compared with his costs

266. Mr. L made a donation during a political campaign period for campaign materials
Statements 1.If the donation is given to a particular candidate, donation is exempt
from the donor’s tax
Statement 2. If the donation is given to the political party of the candidate, the donation
is subject to the donor’s tax

267. The A Co. donated a piece of land to the Municipality of Y, Province of Z, for
relocation site of informal settlers. The municipal government awarded parcels to
the settler’s, and houses were built on them
Statements 1. The donation to the Municipality of Y, Province of Z exempt from the
donor’s tax
Statements 2. The awarding of parcels of land and houses to the settlers by the
municipality is exempt from the donor’s tax

268. Mr. F donated a piece of land to Mr. G, but did not pay the donor’s tax. Mr. G
began enjoying the income from the land. When the Bureau of Internal Revenue
sought to collect income tax from Mr. G, he alleged that the property is still owned
by Mr. F because, with the donor’s tax not having been paid, the property is still
the property of Mr. F.
Statement 1. The transfer of ownership is not negated by the payment of the donor’s
tax on the transfer;
Statement 2. The income from the property does not belong to, and is not enjoyed by,
Mr. F
269. Case A. Mr. F, a subject of a Japan and a resident of Tokyo, gave a gift check of
$50,000 to a future daughter-in-law who is to be married to his son in the Philippines
Case B. G Co., a multinational corporation doing business in the Philippines donated one
hundred shares of stock of Mr. H, to its resident manager in the Philippines
Statement 1. The transactions are gifts
Statement 2. The gifts are not subject to the donor’s tax

270. Mr. K owns real property with a cost of P1,000,000. On December 31, 2017,with a
fair market value of P1,000,000 and a zonal value of P2,000,000 he donated one-
half of the property pro-indiviso interest to a son. On January 2, 2018, he donated
the other half pro-indiviso to the same son.
Statement 1. The value of the gross gift on December 31, 2017 is P P10,000,000 and on
January 2, 2018 is P1,000,000
Statement 2. The value of the gross gift on December 31, 2017 is P2,000,000 because
the splitting up of the donations into two is from a single intent of donating P20,000,000
to the son.

271. The distinction between actual distraint and constructive distraint is that:
a. Actual distraint may be made on the properly of any taxpayer whether
delinquent or not while constructive distraint is made on the property only of a
delinquent taxpayer
b. In actual distraint, there is a taking of possession, while in constructive
distraint, the taxpayer is merely prohibited from disposing of the property c.
Actual distraint is effected by requiring the taxpayer to sign a receipt of the
property or by the revenue officer preparing and leaving a list of the distraint
property or by service of a warrant of distraint or garnishment d. Answer not
given
272. Where a return was filed, as a general rule, the prescriptive period for assessment
after the date the return was due or was filed, whichever is later, is within:
a. Three years c. Ten years
b. Five years d. Answer not given
273. On April 15, 2015, Mr. Lacson filed his income tax return for his 2014 income and
paid the tax due thereon. In 2016, when Mr. Lacson hired a new CPA to prepare his
income tax return, he was informed that he made an over-payment in his income
tax return filed in 2015. Convinced that he erroneously collected with the BIR
Commissioner on December 15, 2016. On April 10, 2017, without receiving a reply
or decision in his claim for refund, Mr. Lacson’s lawyer filed in the Court of Tax
Appeals a petition for review on his claim for refund of tax erroneously collected.
Did the Court of Tax of Tax Appeals acquire jurisdiction over the petition for review
of Mr. Lacson?
1st Answer: No, because the appeal is premature, there being no decision yet on said
claim for refund. The Court of Tax Appeals did not acquire jurisdiction over the appeal
because its jurisdiction is to review by appeal decisions of the BIR Commissioner 2nd
Answer: Yes, because while the BIR Commissioner has not yet rendered a decision on
said claim for refund, the peremptory period of two years within which a claim for
refund of taxes erroneously collected may be filed is about to expire on April 15, 2017
and the failure of the Commissioner to act on the claim for refund is tantamount to
denial of the taxpayer’s claim, hence appealable to the Court of Tax Appeals
a. First answer is wrong, second answer is correct

b. First answer is correct, second answer is wrong
c. Both answers are correct
d. Both answer are wrong
274. Which of the following violations cannot be subject to compromise penalties?

a. Failure to keep/preserve books of accounts and accounting records
b. Failure to keep books of accounts in a native language or English
c. Failure to have books of accounts audited and have financial statements
attached to income tax return certified by independent CPA d. Keeping two
sets of books of accounts or records
275. Which of the following statements is not true?

a. If a taxpayer is acquitted in a criminal violation of the Tax Code, this acquittal
does not exonerate him from his civil liability to pay the taxes
b. A conviction for tax evasion is not a bar for collection of unpaid taxes
c. A tax assessment is necessary to a criminal prosecution for willful attempt to
defeat and evade payment of taxes
d. Criminal proceedings under the Tax Code is now a mode of collection of
internal revenue taxes, fees or charges
276. For filing a false and fraudulent return, a surcharge is imposed. Which of the
following is correct?
a. 50% as administrative penalty
b.50% as criminal penalty
c.25% plus 50%
d. 25% as criminal penalty
277. Pioneer enterprise shall mean a registered enterprise, except a Engaged in the
manufacture, processing or production of goods, products, commodities or raw
materials that have not been or are not being produced in the Philippines on a
commercial scale.
b This uses a design, formula, scheme, method, process or system of production or
transformation of any element, substance or raw materials into another raw
materials or finished goods which is new and untried in the Philippines. c Engaged in
the assembly or packaging of goods, products, commodities or raw materials that
have not been or are not being produced in the Philippines. d Engaged in the
assembly or packaging of goods, products, commodities or raw materials that have
not been produced 1in the Philippines on a commercial scale.
278. The following are administrative remedies available to a taxpayer in connection

with collection of taxes, except one:
a. Filing of claim for tax refund or credit
b. Filing a petition for reconsideration or reinvestigation
c. Filing of criminal complaint against erring BIR officials or employees
d. Entering into a compromise
279. Which of the following statements is not true?

a. If a taxpayer is acquitted in a criminal violation of the Tax Code, this acquittal
does not exonerate him from his civil liability to pay the taxes
b. A conviction for tax evasion is not a bar for collection of unpaid taxes
c. A tax assessment is necessary to a criminal prosecution for willful attempt to
defeat and evade payment of taxes
d. Criminal proceedings under the Tax Code is now a mode of collection of
internal revenue taxes, fees or charges
280. For filing a false and fraudulent return, a surcharge is imposed. Which of the
following is correct?
a. 50% as administrative penalty
b.50% as criminal penalty
c.25% plus 50%
d. 25% as criminal penalty
281. Pioneer enterprise shall mean a registered enterprise, except
a Engaged in the manufacture, processing or production of goods, products,
commodities or raw materials that have not been or are not being produced in
the Philippines on a commercial scale.
b This uses a design, formula, scheme, method, process or system of production
or transformation of any element, substance or raw materials into another raw
materials or finished goods which is new and untried in the Philippines. c
Engaged in the assembly or packaging of goods, products, commodities or raw
materials that have not been or are not being produced in the Philippines. d
materials that have not been produced 1in the Philippines on a commercial
scale.
with collection of taxes, except one:
a. Filing of claim for tax refund or credit
b. Filing a petition for reconsideration or reinvestigation
c. Filing of criminal complaint against erring BIR officials or employees
d. Entering into a compromise
282. Statement 1.The Commissioner of Internal Revenue has authority to terminate the
tax period of a taxpayer who is retiring from business subject to tax, or is intending
to leave the Philippines or to remove his property or to hide or to conceal his
property, or to perform an act tending to obstruct the collection of taxes
Statement 2. When a tax period is terminated, any unpaid tax is due immediately

283. Statement 1.The power to interpret provisions of the National Internal Revenue
Code and other tax laws will be under the exclusive and original jurisdiction of the
Commissioner of Internal Revenue, subject to review by the Secretary of Finance
Statement 2.The power to decide disputed assessment and refunds of internal revenue
taxes is vested in the Commissioner of Internal Revenue, subject to the exclusive
appellate jurisdiction of the Court of Tax Appeals
284. Statement 1.The Commissioner of Internal Revenue may terminate the tax period
of a taxpayer, and collect taxes due at such termination, if the taxpayer does an act
that will make the proceedings for the collection of the tax totally or partially
ineffective Statement 2.The Commissioner of Internal Revenue may accredit
and register tax agents who prepare and file returns, reports, protest, etc., with, or
who appear before, Bureau of Internal Revenue

285. Statement 1.The Commissioner of Internal Revenue is authorized to inquire into

the bank deposit of a taxpayer who has filed an application for compromise of his
tax liability by reason of financial capacity to pay
Statement 2. A compromise for a tax liability on the ground of financial incapacity
to pay will still involve a payment of a tax from the taxpayer at a minimum compromise
rate of 10% of the basic assessed tax.
a True, true c. True, false

b False, false d. False, true
286. The CCo., Inc., a domestic corporation, had the following data for 2018: On
business operations: From Philippine sources:
Sales:
Cash sales P3,250,500
Open account sales 4,398,250
Installment sales 5,239,654
Collections from:
Account sales 3,905,678
Installment sales 3,264,328
Cash dividend received 25,400
Interest on bank savings deposits 56,3
20
On real property:
Income received in cash 300,0
00
Assessed value 3,256,0
00
From foreign sources:
Cash dividend received 100,0
00
How much is the additional community tax for 2019?

a P4,176 c. P5,480 b P1.302 d. P3,756
287. Lessor 1 owns 20 residential units at P14,500/mo and accumulated gross receipts
amounted to P3,480,000. How much is VAT/PT due?
Lessor 2 owns 15 residential units at P15,500/mo and accumulated gross receipts
Lessor 3 owns 15 residential units at P15,500/mo and accumulated gross receipts
a Lessor 1 VAT due P417,600; Lessor 2 exempt; Lessor 3 VAT due P446,400.
b Lessor 1 OPT due P104,400; Lessor 2 VAT due P334,800; Lessor 3 VAT due
P446,400.
c Lessor 1 exempt; Lessor 2 OPT due P83,700; Lessor 3 VAT due P446,400.
d Lessor 1 exempt, Lessor 2 OPT due P83,700; Lessor 3 OPT due P111,600.
288. There are various reasons for the exclusion of certain receipts from gross income.
This receipts is excluded because it is not income. a Prizes and awards in sports
competition b Gains derived from exchanges in kind. c Life insurance proceeds d
Prizes received in recognition of civic achievement.
289. Ellen insured the life of her father for P2 million paying a premium in the amount
of
P200,000. The term of the insurance was for 20 years. Part of the agreement was for
Ellen to be paid P2 million, in case her father survives the 20-year period. Supposing
Ellen gets the P2 million, how much would be excluded from her gross income?
a. P200,000 c. P2,200,000
b. P2 million d. P0
290. Which of the following statements on construction of tax laws is false?
a A stature will not be construed as imposing a tax unless it does so clearly,

expressly and unambiguously.
b In case of doubt, it shall be construed most strongly against the government,
and liberally in favor of the government.
c Tax laws are special laws and prevail over a general law.
d Retroactive application of tax laws is not permitted.
291. Which of the following statements is correct?

a Taxes can only be imposed to raise revenues
b The state cannot have the power of taxation unless the Constitution expressly
grants it so
c The state cannot actually tax anything at any time in the exercise of its taxing
power
d The provision of taxation in the Philippine Constitution are not grants of power
but rather limitations on the exercise of the taxing power
292. What is the BASIS of Taxation?
a Lifeblood b Necessity c Symbiotic relationship

d Raise Revenue
293. X Company, engaged in restaurant business, uses accrual basis of accounting in its
financial statements. Its operation for the year ended shows the following:
Gross Revenue on account to customers P3,500,000
Gross Receipts from senior citizens, net of 20% discount 400,000
Purchases, directly attributable to customers other than senior
citizens, net of VAT 300,000
Purchases, cannot be attributed, net of VAT 200,000
Direct Cost 2,000,000
Purchase of Equipment, used for all services rendered 600,000
Increase in Accounts Receivable (VAT inclusive) 224,000
Operating Expenses 1,000,000
Compute the Output VAT
a. P420,000 c. P396,000
b. P372,000 d. P468,000
294. Includible as part of her gross income. Why?

a The interest received is not considered income derived from the use of capital.
b The interest is excluded from gross income for reasons of public policy to
encourage purchase of government bonds.
c The interest is not taxed because the redemption of the bond at a premium
would be taxable.
d To tax such interest would be violative of the non-impairment clause because
Marie would not have bought the bond if it were not tax-free.
295. The books of the taxpayer shows the following for 2011:
Interest expense P200,000
Interest income, net of final tax 80,000
The deductible interest expense is?

a. P200,000 b. P173,600 c. P167,000 d.
P120,000
296. Which of the following is not considered tax?

a Compromise penalty
c. License or fee b Special assessment
d.all of the above
297. One of the characteristics of our internal revenue laws is that they are:
a Penal in nature b Criminal in nature c
Political in nature
d Generally prospective in application although the ax law may nevertheless
operate retroactively provided it is clearly the legislative intent
298. Which of the following is not within the scope of tax legislation?
a. Fixing the imposable tax rate;
b. Assessment of the tax;
c. Determining the subject to be taxed;
d. Determining the purpose of the tax;
299. One of the following is a taxable income. a Income from a qualified

pension plan. b Compensation for personal injuries. c Stock dividend
received.
d Gift given by an employer to an employer for services rendered.
300. A VAT-registered corporation has the following data taken from the books of
accounts for the first calendar quarter of 2015:
Sales returns and allowances 100,000
Office equipment purchased January 1, 2015 1,100,000
Operating expenses (40% with passed on VAT) 300,000
Cost of Sales 1,500,000
Vehicle for land transport imported January 1, 2015 2,500,000
Purchase of goods for sale, (included in the cost of sales above) 300,000
Gross sales 5,000,000
Office supplies purchased (wholly used) 90,000
VAT payment for January and February 40,000
Sales discount 400,000
How much is the VAT payable?

a. P220,950 c. P73,550
b.P460,950 d. None of the choices
301. The following are the similarities of the inherent powers of police power,
eminent domain, and taxation. Which one is not?
a. Inherent in the state
b. Exist independently of the constitution
c. Interfere with the private rights and property
d. Inferior to the non-impairment of obligations clause of the Constitution
302. Which of the following is not an inherent limitation of the power of Taxation?
a International Comity; b Veto Power of the President;
c Territoriality ; d
Public purpose test.
303. Compensation for injuries or sickness is a Excluded from gross income b

Ordinary gain c Capital gain d Compensation income
304. Senor C.T Zen, 65 years old is a person with disability. He purchased medicines
from a drugstore with a list price of P22,400. If the amount is gross of discount
and value-added tax, how much should Senor Zen pay to the drugstore?
a. P 22,400 b. P20,000 c. P 16,000 d. P18,400
305. Which of the following statement is false?

The power to tax is exclusively exercised by the legislature.
The President has the authority to fix tariff rates, import and export quotas, tonnage and
dues, and other duties or imposts.
Local government units have the power to levy taxes.
Tax legislation may be delegated to administrative agencies.
a. II and III only c. II,III and IV

b. II and IV only d. IV only
306. The distinction of a tax from a permit or license fee is that in tax:
a Failure to pay makes the act or business illegal
b Imposition may not only be on the right to exercise a privilege but also on
persons and property
c The amount imposed depends on whether the activity is useful or non-useful
d The permit or license fee is a charge imposed under the taxing power of
the state for the purpose of regulations
307. Imposition of fixed license fee for the sale of Bible and other religious items is
violation of _________?
a Exemption of nonprofit organization
b Exemption of religious organization from property taxation c No
appropriation for religious freedom d Non-infringement of religious freedom
308. The widow of your best friend has just been paid P1,000,000.00 on account of
the life insurance policy of the deceased husband. She asks you whether she
should declare the amount for income tax purposes or for estate tax purposes.
1st advice: the proceeds of life insurance paid to the beneficiary upon the death
of the insured are exempt from income tax and need not to be declared for income tax
purposes.
2nd advice: the proceeds of life insurance would have to be declared for estate
tax purposes if the designation if the beneficiary was irrevocable, otherwise it need not
be declared.
a Both advices are correct b 1st advice correct; 2nd advice wrong; c Both
advices are wrong
d 1 advice wrong; 2nd advice correct
st
309. ABC, a domestic corporation, 60% Filipino owned, had the following gross
receipts from world championship events it conducted in the Philippines
Billiard (between Bata Reyes and Don Ming Sooo) - Php 1M

Tennis (between M. Sharapova vs. USA) - 2M
Basketball (between Philippines vs. Brazil) - 3M
Volleyball (between Philippines vs. Brazil) - 4M
Boxing (between Manny Pacquiao vs. Floyd Mayweather ) 10MThe
percentage tax due is ?

a. Php 1M b. Php 2M c. Php 450,000 d. Php 0
310. The imposition of estate taxes by the National Government and local transfer
taxes by the LG concerned on the same properties is an example of a/an:
a Direct double taxation b Indirect double taxation
c Domesticated juridical double taxation
d None of the above
311. The following are examples of an excise tax. Which one is not?
a Income taxes b Estate and donor’s taxes c VAT and other percentage taxes
d Real property taxes
312. A form of tax escape through which one is given tax immunity wherein others
are subjected to tax: a Shifting b Tax immunity c Tax exemption d Tax
avoidance
313. At the time of his death, Palito was a resident of the United States. He left,
among others, shares of stock of a Philippine corporation. The estate tax of the
United States was paid on this property. The Bureau of Internal Revenue (BIR)
of the Philippines seeks to impose the Philippines estate tax on the same
property. If the decedent was a citizen of the Philippines, is the Philippine BIR
correct in what it seeks?
Statement 1. The BIR is correct because the decedent’s estate subject to Philippine
estate tax would include all properties regardless of location.
Statement 2. The BIR cannot allow an exclusion of such properly from the decedent’s
gross estate but can allow tax credit against the Philippine estate tax for the foreign tax
paid.
b Both statement are false c Only statement 1 is true, but not statement 2.
d Only statement 2 is true, but not statement 1.
314. Lolita Corporation took a keymen insurance on the life of its President, Mr. Ruin
Smith. The policy designated Mr. Smith’s wife as its revocable beneficiary in the
event of death of Mr. Smith. In the event of Mr. Smith, death, the life insurance
proceeds would be a Taxable as the wife’s income. b Taxable as part of Lolita
Corporation’s income. c Excluded from the wife’s gross income.
d Taxable as part of Mr. Smith’s benefits as an employee.
315. A VAT taxpayer has the following data for a particular quarter during the current
year:
Sale of shares of stock:

Held as inventory P 1,000,000
Held as investment 500,000
Cost of the shares sold
Held as inventory 300,000
Held as investment ( thru local stock exchange ) 600,000
The stock transaction tax is

a. P0 b. P1,500 c. P2,500 d. P7,500
316. The deductive expenses from the gross income of an estate may consists of:
a Deductive expenses allowed to an individual taxpayer.
b Income of the estate distributed to beneficiaries.
c Both “a” and “b”
d Neither “a” and “b”
317. Congress enacted a law increasing the personal exemption in income taxation to a
uniform P50,000 for all individuals regardless of status (whether single, head of a
family, married) and additional exemption for each qualified dependent child (not
exceeding four) to P25,000. The law took effect on July 6, 2008. The Secretary of
Finance shall allow the increase personal and additional exemption:
a On the effectivity of the law; thus, the income tax was correspondingly reduced
only for the second half of 2008 (not for the first half), rather than a full year tax
relief to the taxpayers
b As of the beginning of the year in which the law was passed by Congress as
income taxes are computed on an annual, not semiannual, basis; thus, prorated
application of the tax exemptions was void. Besides, there is a clear legislative
intent of the law to grant full tax relief to the taxpayers.
c As of the beginning of the succeeding calendar year
d Only when Congress passes a law clearly stating the effectivity of the increase
318. Which statement/s is/are true?

I – the power to tax includes the power to exempt
II – the power to license is the power to tax
a True, True c False, True b True, False d False, False
JDL Grocery store, made the following transactions:
Taxable Sales P4,000,000

Agricultural Sales (VAT-exempt) 1,000,000
Sales to senior citizens 1,000,000
Cost-of-sales – taxable sales 3,500,000
Cost-of-sales – exempt sales 1,000,000
Operating Expenses 780,000
Direct Cost (unallocated) 600,000
319. VAT payable

a. P12,000 c. P60,000
b. Excess input tax of P12,000 d. P 0
320. Normal Income Tax
a. P30,000 c. P36,000
b. P13,800 d P28,800
321. Amount receivable by the estate of the deceased, his executor or administrator as
a beneficiary under policy taken by the decedent upon his own life is:
a Excluded from gross income. b Part of gross income whether the beneficiary is
revocable or irrevocable. c Part of gross income if the beneficiary is
irrevocable.
d Part of gross income if the beneficiary is irrevocable
322. If the vat taxpayer enjoys a partial exemption of 40% including VAT and the
amount is VAT inclusive, how much is the output tax?
a. P3,078 c.P3,447
b. P3,216 d. P3,628
323. Determine which of the following trusts shall the taxable income be consolidated
and the income tax thereon computed on the basis of such consolidated income?
a Trust No. 1 and Trust No. 2 have the same grantor and with different
beneficiaries.
b Trust No. 1 and Trust No. 2 have the same grantor and same beneficiaries.
c Trust No. 1 and Trust No. 2 have different grantors and with different
beneficiaries. d Trust No. 1 and Trust No. 2 have different grantors and with the
same beneficiaries.
324. Mr. Leonardo requested you to prepare his income tax return. Among his receipts
for the year are the proceeds from a life insurance policy received from the estate
of his deceased parents. Evaluate the following advice:
1st advice: Include the insurance proceeds as part of the income reportable in
the income tax return.
2nd advice: Do not report the insurance proceeds in the income tax return
because they are subject to a final tax.
3rd advice: Exclude the life insurance proceeds from the gross income to be
reported in the income tax return.
a All of the advices are equally legal tax treatments. b Only the 1st advice is valid,
the others are not. c The 2nd and 3rd advice are equally valid and may be availed
of in the alternative. d Only the 3rd advice is valid.
325. Tong Siok, a Chinese billionaire and Canadian resident, died and left assets in China
valued at P80 billion and in the Philippines assets valued at P20 billion. For
Philippine estate tax purposes the allowable deductions for expenses, losses,
indebtedness, and taxes, property previously taxed, transfers for public use, and
the share of his surviving spouse in their conjugal partnership amounted to P15
billion. Tong’s gross estate for Philippine estate tax purposes is
a. P20 billion b. P5 billion c. P100 billion d. P85 billion
Use the following data for the next two questions:

Bogart is a resident citizen. Data on his 2018 income and expenses were provided as
follows:
Gross business income P700, 000
Business expenses 300,000
Royalty from books 40,000
Gain on direct sale to buyers of shares of domestic
Corporation held as capital asset 70,000
Loss on sale on land in the Philippines held as
Capital asset with a zonal value of P1, 200,000 500,000
326. How much is the total income tax expense for the year?
a. P6,000 c. P116,500
b. P142,000 d. P159,500
327. Assuming Bogart opted to be taxed at 8% preferential tax rate, how much is the
total income tax expense for the year?
a. P6,000 c. P116,500
b. P142,500 d. P159,000
328. Which one of the following statements is correct?

A tax reform (like TRAIN under the Duterte administration) at any given time
underscores the fact that:
a Taxation is essentially a legislative function b
Taxation is an inherent power of the state c The
state shall evolve a progressive system of taxation d
Taxation is a power that is very broad
329. Charles Antony Towns is a non-resident American citizen in the Philippines assigned
as consular head of the U.S. Embassy in the Philippines. As consul, he generates several
passive income from interest on bank deposit, royalties from intellectual creation and
dividends from several multinational corporation. BIR assessed Mr. Towns of deficiency
income tax, as his accountant what would you advise Mr. Towns?
a BIR is erroneous because of International comity b
BIR is erroneous because of Territorial jurisdiction c BIR
is correct but with application of Reciprocity provision d BIR
is correct but with application of tax paring rule
330. Decedent was a citizen of the Philippines.

Property No. 1 inherited from father 1 ½ years ago:
Fair market value when inherited P500,0
00
Fair market value of death 350,0
00
Mortgage on the property when inherited 80,0
00
Mortgage on the property paid by decedent 30,0
Property No. 2 received as gift from mother 3 ½ years ago: 00
Fair market value when received 400,0
00
Fair market value at death 450,000
Gross estate which includes the properties above 6,000,000
Ordinary deductions 450,000
The vanishing deduction is:

a. P370,000 b. P384,800 c. P499,500 d. P573,500
331. On 30 June 2008, X took out a life insurance policy on his own life in the amount of
P-2,000,000.00. He designated his wife, Y, as irrevocable beneficiary to
P1,000,000.00 and his son, Z, to the balance of P1,000,000.00 but, in the latter
designation, reserving his right to substitute him for another. On 01 September
2012, X died and his wife and son went to the insurer to collect the proceeds of X’s
life insurance policy.
What should be the income tax treatment of the respective shares of Y and Z? Explain.
a Y should exclude from her gross income her share while Z should include in his
gross income his share.
b Y and Z should both exclude from gross income their respective shares.
c Y and Z should both include in their gross income their respective shares.
d Z should exclude from his gross income his share while Y should include in her
gross income her share.
332. In 2010, Juliet Ulbod earned P500,000.00 as income from her beauty parlor and
received P250,000.00 as Christmas gift from her spinster aunt. She had no other
receipts for the year. She spent P150,000.00 for the operation of her beauty parlor.
For tax purposes, her gross income for 2010 is
a. P750,000 b. P500,000 c. P350,000 d. P600,000

a Customs duty is a tax
b Non-payment of a tax does not make the activity being taxed unlawful c A
tax is a demand of sovereignty while a toll is a demand of property ownership d
A grant of police power to a unit of local government carries with it a grant of
the power to tax
334. Which statement/s is/are correct?

I – Equal protection of the law is the right of every taxpayer to be heard II
– Equality is the same as progressive taxation
a. True, True
b. True, False
c. False, True
d. False, False
335. Which among the following is not excluded from gross income?
a Life insurance proceeds received by a building contractor on the life insurance

of his client to secure payment for services rendered.
b Insurance premiums returned to the insured after he survives the term of his life
insurance policy.
c Retirement pensions received by a Philippine resident from an off-shore
employer.
d Separation pay received by an employee whose services were terminated due
to an incurable disease.
336. Palito died in 2005 leaving a will which directed all real estate owned by him not to
be sold or disposed of for a period of 10 years after his death and ordered that the
property be given to Pancho upon the expiry of that period. In 2005, the estate left
by Palito had a BIR zonal value of P1 million. In 2015, the fair market value of said
estate increased to P3 million, It was declared for taxation in 2015 for P2 million
and the BIR zonal valuation was P3.5 million. What value should be used for the
purpose of estate taxation?
a. P1 Million b. P2 Million c. P3 Million d. P3.5 Million
337. Lorna, a PWD and a minimum wage earner, works for Masigasig Corporation. She
earned the following income for 2018 taxable year:
Compensation income-P168,000
Overtime pay-P80,000
Night shift deferential-P30,000
Hazard pay-P15,000
Holiday pay-P15,000
She also contributed to the SSS, Philhealth, and HDMF amounting to P5,000 and has
received a 13th month pay and other benefits of P120,000. Lorna’s income tax due for
the taxable year should be:
a. P6,000 c. P7,200
b. P3,600 d. P0
338. Statement 1. Inherent limitations on the power of taxation must give way to the
constitutional limitations.
Statement 2. Because the power of taxation is inherent in the state the inherent
limitations on the power of taxation always apply.
a Both statements are true b Both statement s are false c Statement 1 is true
while statement 2 is false d Statement 1 is false while statement 2 is true
339. Mr. Aegis Trangia, your client, asks you to file a tentative income tax return for his
behalf because he is going abroad. However, Mr. Trangia stay outside the
Philippines is indefinite, so Mr. Trangia asks you when is his last day to make
amendments to finalize his Income Tax Return?
a 3 years from the date of filing. b 3 years from the date required by law. c
Anytime until the BIR has not yet commenced its investigation over said return.
d Before Mr. Trangia receives a Letter of Authority from the BIR and before its
prescription.
340. Mr. Jose Fabella signified his intention to be taxed at 8% income tax. In the given
year, he earned the following:
Rentals for first 9 months – P250,000/ month
Rentals for last 3 months – P1,000,000/ month
Proper withholding of tax was made.
How much is the tax due on the 3rd quarter?

a. P160,000 c.P22,500
b. P180,000 d. P25,000
341. How much is the gross receipts/ percentage tax due on the 4 th quarter?
a. P 0 c. P420,000
b. P67,500 d.P525,000
342. How much is the tax due on his final return in case Mr. Fabella opted for OSD?
a. P398,000 c. P745,500
b. P445,500 d. P858,000
343. When is he required to update his registration from non-VAT to VAT?

a. October 31, 2018 c. December 31, 2018
b. November 30, 2018 d. January 1, 2019
344. JEM insured his own life for P1 million. He assigned the insurance to Kerby for
valuable consideration in the amount of P800,000.00. JEM died and Kerby was able
to collect the P1 million. Prior to JEM’s death, Kerby, had in the meantime paid
P50,000.00 insurance premiums on the policy. What should be the income tax
treatment of the p1 million life insurance proceeds considering the above
circumstances?
a The P1 million is excluded from Kerby’s gross income because it is life insurance
proceeds.
b Kerby should include the P1 million as part of his gross income. c Kerby
should report only P150,000.00 of the P1 million he received because the
P800,000.00 is considered as his expense in earning the income and the
P50,000.00 is considered as return of the premiums he paid. d Kerby should
report only P150,000.00 of the P1 million he received because the P850,000 is
considered as a return of his investment.
345. When Tanda died, he left an estate value at P5 million. His heirs spent P700,000 for
all the funeral services rendered by St. Peter Memorial Chapel, including the
expenses attendant to the wake, the coffin, cremation services, and the urn where
his ashes were placed. P400,000 out of the P700,000 funeral expenses were
shouldered by friends and relatives. Which among the following amounts may be
deducted from his gross estate for funeral expenses?
a. P700,000 b. P300,000 c. P250,000 d. P200,000
346. Which of the following statements on the 8% income tax rate is incorrect?
The financial Statements (FS) is not required to be attached in filing the final tax return.
Existing rules and regulations on bookkeeping and invoicing/receipts shall still apply. The
income tax is in lieu of the graduated rates of income tax and percentage tax under Section
116 of the Tax Code.
Statement 1. Direct double taxation is allowed by the Philippine Constitution
Statement 2. Indirect double taxation is allowed by the Philippine Constitution
a Both statements are true b Both statement s are false c Statement 1 is true
347. Gerry was being prosecuted by the BIR for failure to pay his income tax liability for
Calendar Year 2013 despite several demands by the BIR in 2015. The information
was filed with the RTC only last June 2016. What are the remedies of Gerry?
a Gerry should file a motion to quash the Information on the ground of
prescription b Gerry should answer the Information
c Gerry should file a protest with the Commissioner of BIR d
Gerry should appeal to the CTA
348. Moana promised to pay, in instalments, P1 million which he owed Atty. Puno as a
result of legal services rendered by the latter. In the absence of a collateral, Moana,
with the consent of his irrevocable beneficiary, assigned his life insurance policy
with a face value of P1 million to Atty. Puno. In the meantime Moana dies and Atty.
Puno is able to collect P1 million. You are consulted by Atty. Puno with regard to
the taxation of the P1 million insurance proceeds. What advice shall you give him?
a The P1 million being life insurance proceeds should be excluded from his gross
income. b The P1 million should be reported as part of his gross income in his
income tax return. c The P1 million is subject to final tax and therefore not to be
reported in his income tax return.
d The P1 million is considered as a gift from Moana hence excluded from gross income
but subject to donor’s tax.
349. In 2004, X Corporation incurred the following expenses and connection with the
conduct of its business
A) Plane tickets and hotel bills of its employees
Who were sent business seminars…………………… P 100,000
B) Transportation allowances of its officers from
Home to office and vice versa as part of their
Employment contract net of P64,000………………… 136,000
C) Transportation expenses of messengers from
Office to several clients……………………………… 80,000
The allowable expenses that could be claimed by X Corp. is

a. P180,000 b. P244,000 c. P316,000 d. P380,000
Use the following data for the next two (2) questions:
Mr. Mapalad realized the following during 2018 taxable year:

Compensation income P600,000
Gross sales (sale of fertilizers and poultry feeds) 2,500,000
Operating expenses - sale of fertilizers and
poultry feeds 900,000
Raffle draw winnings 50,000
PCSO winnings 10,0
Loss on sale of his personal car held only for 12 00
months 100,0
Gain on sale of shares of stock in Megaword 00
Corporation, a publicly listed domestic
corporation 40,00
0
350. The taxable net income of Mr. Mapalad should be:

a. P2,200,00 c. P2,100,000
b. P2,250,000 d. P2,290,000
351. All of the following, except one, are entitled to tax credit on estate tax paid in
foreign country:
a. Non-resident, not citizen
b. Non-resident citizen
c. Resident alien
d. Resident citizen
352. Statement 1. A revenue regulation must not be contrary to the provisions of the tax
law that it implements.
Statement 2. A revenue regulation cannot expand the provisions of the law that it
implements by imposing a penalty when the tax law itself that authorizes the revenue
regulation does not impose a penalty
a. Both statements are true b Both statement s are false c Statement 1 is true
353. Large taxpayers are required to file using:

a. eFPS
b. eBIR Form Package
c. either a or b
d. personal filing
354. Paquito insured his life for P1 million naming his son as his solitary beneficiary.
When he died and his son received the P1 million from the insurance company he was
told that the life insurance proceeds he received are considered excluded from gross
income and not subject to income tax. He does not want to get into trouble with the BIR
so he comes to you as a tax consultant and asks why life insurance proceeds are
exempted from income taxation. What should you tell him?
a The proceeds are considered merely as returns of investments of the decedent

and any excess of the premiums paid are to be included as part of the estate
subject to estate taxes.
b They are considered as income the excess of the premiums paid being
considered as the earnings of the premiums.
c They are considered merely as compensation for loss and they partake more of
indemnity or compensation rather than gain to the recipient.
d They are excluded from gross income because insurance proceeds are
considered donations. This is so because the prohibited donees under civil law
are also prohibited to be the beneficiaries of insurance proceeds.
A, a VAT taxpayer, sold the following:

Selling Price Book Value
Old warehouse Php 3,000,000 Php4,000,000
Old factory 6,000,000 5,000,000
Old residential house 8,000,000
355. The output VAT is

a. Php 1,080,000
b. Php 1,200,000
c. Php 2,040,000
d. Php 0
356. A non-payment of a tax has a civil liability (payment of the tax) and a criminal
liability (fine and/or imprisonment).
Statement 1. A civil case has to be filed in court apart from a criminal case to be
filed in court
100 | T a x a t i o n
Statement 2. A case filed in the Court of Appeals covers both the civil and criminal
aspects of the tax case
a Both statements are true b

Both statement s are false c
Statement 1 is true while
statement 2 is false d
Statement 1 is false while
statement 2 is true
357. A PAN should not be required in the following except:

a. When the finding for any deficiency tax is the result of
mathematical error in the computation of tax appearing on the face of the tax
return filed by the taxpayer
b. When a discrepancy has been determined between the tax
withheld and the amount actually remitted by the withholding agent
c. When an article locally purchased or imported by an exempt
person, such as, but not limited to, vehicles, capital equipment, machineries and
spare parts, has been sold, traded or transferred to non-exempt persons
d. When there is an alleged fraud or non-filing of return when
more than 30%
was unduly over declare or under declare.
358. Ellen insured the life of her father for P2 million paying a premium in the amount of
P200,000. The term of the insurance was for 20 years. Part of the agreement was for
Ellen to be paid P2 million, in case her father survives the 20-year period. Supposing
Ellen gets the P2 million, how much would be excluded from her gross income?
a. P200,000 b. P2 million c. P2,200,000 d. P0
359. Super Lolo, 90 years old , tendered a lunch for his two grandchildren, Karen and
Isabel in one popular fast food chain in town. Karen ordered spaghetti, drinks, and
burger with an invoice price of P85.00 gross of VAT. Isabel ordered chicken with
rice and drinks with an invoice price of P92.00, while Super Lolo ordered chicken
101 | T a x a t i o n
with spaghetti and drinks worth P106.40, gross of VAT. How much should be paid
by Super Lolo for the foods ordered?
a. P283.40 b. P217.60 c. P253.00 d. P234.06
Use the following data for the next two (2) questions:
Garcia, Ramos, Toribio and Co., CPAs (GRT &Co.), are partners of an accounting firm.
The 2017 financial records of the firm disclosed the following:
Service Revenue P6,000,000
Cost of Services 2,800,000
Interest income from the bank deposit 200,000
Interest income from FCDS deposit 125,000
Garcia is also engaged in a separate business of his own with the following data of the
year:
Sales P2.500.000
Cost of sales 1,250,000
360. Determine the correct amount of the following:

GPP’s Distributable Income Garcia’s taxable income
a. P2,675,625 P1,450,000
b. P2,675,625 P1,541,875
c. P2,725,000 P1,500,000
d. P2,725,000 P1,608,333
361. Determine the correct amount of the following assuming the GPP of opted to use
OSD in computing its net income:
GPP’s Distributable Income Garcia’s taxable income
a. P2,231,875 P2,140,000
b. P2,195,625 P2,090,000
c. P2,675,625 P1,500,000
d. P2,195,625 P1,340,000
102 | T a x a t i o n
362. One Chief Justice said that the power to tax involves the power to destroy while
another Chief Justice maintains that the power to tax is not the power to destroy.
Which among the following statements does not reconcile the two seemingly
inconsistent opinions?
a The power to tax could not be subject of compensation and set-off b An illegal
tax could be judicially declared invalid and should not work to prejudice a
taxpayer’s property
c The first Chief Justice’s view refers to an invalid tax
d The imposition of a valid tax could not be judicially restrained merely because it
would prejudice a taxpayer’s property
363. JoselitoCabagua received a FAN when the BIR conducted a jeopardy assessment.
Joselito argued he was never subjected to a formal audit or investigation by the
BIR. Further, Joselito argued that he has nothing to hide since his business went to
bankruptcy. What is the remedy available when there is reasonable doubt as to the
validity of the claim against the taxpayer or when there is financial inability to pay
a. Compromise
b. Abatement
c. Protest
d. Refund
364. Bong and Billy are partners in a GPP which realized a Sales of P8,000,000 with
corresponding cost of sales P5,000,000 and Operating Expenses P2,000,000 in year
2018. Bong, single, benefactor of senior citizen has his own income of P400,000
and cost of sales and expenses P30,000 and P230,000 respectively. While, Billy with
one qualified dependent generated P450,000 income and incurred cost of sales and
expenses P200,000 and P50,000, respectively. They share 70:30 in the profits. Bong
and Billy incurred unliquidated expenses of P100,000 & P50,000, respectively for
the partnership.
Taxable income of Bong if he claims itemized deductions:

a. P850,000 c. P740,000
b. P840,000 d. P665,000
103 | T a x a t i o n
365. Taxable income of Billy if he opted for OSD:
a. P500,000 c. P475,000
b. P570,000 d. P495,000
366. Allen took out a life insurance policy for P1,000,000.00 naming his wife as
beneficiary. Under the terms of policy, the insurer will pay Allen the amount of
P1,000,000.00 after the 20 th year of the policy, and his beneficiaries, should she die
before that date. Allen outlived the policy and received P1,000,000.00. The
premiums paid on the policy was P250,000.00 Which among the following
statements is not correct?
a The amount of P250,000 is excluded from gross income . b The amount of

P750,000 is subject to tax. c The whole of the P1,000,000is not subject to
tax. d. Not all of the P1,000,000 is subject to tax
367. An international air carrier having or maintaining flight operations to and from the
Philippines has the following data for the month:
Gross receipts, sales of passage documents for cargo originating
from the Philippines (documents sold in Japan) P3,000,0
Gross receipts, sales of passage documents for cargo originating 00
from the Philippines (documents sold in the Philippines) 1,500,0
Gross receipts, sales of tickets to passenger originating 00
from the Philippines (tickets sold in Japan) 2,000,0
00
You were asked to compute the tax due to the Philippine Government. Using 3% rate,
How much is the percentage tax due?
a. P195,000 b. P135,000 c. P45,000 d. None of thechoices
368. This is an inherent limitation on the power of taxation:

a The rule of taxation shall be uniform and equitable b No law impairing the
obligations of contracts shall be enacted c The tax laws cannot apply to
the property of foreign
104 | T a x a t i o n
d Charitable institutions, churches, parsonages or convents appurtenant thereto,
mosques, and non-profit cemeteries, and all kinds of lands, buildings and
improvements actually, directly and exclusive used for religious or charitable
purposes shall be exempt from taxation
369. BacolorYambing received a FAN requiring him to pay deficiency tax within 30 days
period. However, Yambing filed a request for reinvestigation. What must he do?
a Submit all relevant supporting documents within 60 days. b Wait for the
commissioner’s decision within 180 days.
c File a protest with the CTA d Appeal the
FAN to the BIR Commissioner.
370. Peter Parker took out a life insurance policy for P500,000 naming her niece,
Samantha, as beneficiary. Under the terms of the policy, the insurer, Paramoun
Insurance Corp., will pay Peter Parker the amount of P500,000 after the 25 th year of the
policy, and her beneficiary, should she die before that date. Peter Parker outlived the
policy and received the proceeds of P500,000. The premiums paid on the policy was
P400,000. The proceeds from the life insurance policy of Peter Parker is:
a Exempt from income tax b Taxable to the extent of P100,000. c The entire
proceeds is taxable.
d Taxable to the extent of P100,000 less current rate of interest.
On November 1, 2010, Gwen died leaving the following properties:
Agricultural land, inherited February 2, 2008 P1,200,0

00
House and lot 2,000,0
00
Cash 2,800,0
00
Car 500,0
00
105 | T a x a t i o n
Other personal properties 1,000,0
00
Total properties P7,500,0
00
Mortgage on the agricultural land P

500,000
Other indebtedness 1,200,00
0
Deductible expenses and losses 400,00
0
Total ordinary deductions P2,100,0
00
371. Gwen paid P300,000 in mortgage before his death. The prior estate paid the estate
tax on the agricultural which was then valued at P1,000,000. Compute the
vanishing deduction.
a. P403,200 b. P388,800 c. P330,400 d. P302,400
372. Statement 1: A partner of GPP is not require to include in his personal gross income
his share in the distributable income of the GPP.
Statement 2: Corporations may form a taxable partnership but not GPP.
a Both statements are correct.

b Both statements are not correct.
c Only the first statement is correct.
d Only the second statement is correct.
373. This is a constitutional limitation on the power of taxation:

a The power of taxation cannot be delegated
106 | T a x a t i o n
b No person shall be imprisoned for debt or non-payment of a poll tax c The
power of taxation is limited to the territorial jurisdiction of the taxing state d
Exemption from taxation of government exercises sovereign powers
374. Under TRAIN, what is the rate of penalty imposed by the BIR?
a 20% surcharge
b ½ the rate of loan or forbearance of any money, good or credits and in
judgments as prescribed by BSP
c Twice the rate of loan or forbearance of any money, good or credits and in
d 40% penalty
ABC Corporation had the ff:
Gross Income P8,000,000

Operating Expenses 2,000,000
Royalty Income 10,000
Bank Interest 100,000
Dividend income from domestic corporation: 100,000
375. Determine the Final Tax

a. P322,000 c. P42,000
b. P300,000 d. P22,000
376. Determine the IAET

a. P118,800 c. P117,800
b. P88,800 d. P87,800
377. Born of a poor family on 14 February 1954 Allen worked his way through college.
After working for more than 12 years in Ellen Manufacturing Corporation, Allen
decided to retire and avail of the benefits under the very reasonable retirement
plan maintained by his employer. On the day of his retirement on 30 April 2008, his
endownment insurance policy, for which he was paying an annual premium of
107 | T a x a t i o n
P1,520,000 since 1988 also matured. He was then paid the face value of his
insurance policy in the amount of P50,000.00.
The amount which Allen could exclude from his gross income is
a. P50,000.00 c. P19,600.00
b. P30,400.00 d. P0
378. In 2018, Far Eastern University of the East (FEUE), a proprietary educational
institution registered with the Commission on Higher Education (CHED), spent
Php25,000,000 on a gymnasium which it’s expects to use for 25 years. For income
tax purposes, this amount maybe:
a. Claimed entirely as deductions from its 2018 gross income.
b. Classified as an asset or expensed outright at the discretion of the CHED.
c. Classified as an asset or expensed outright of the discretion of FEUE.
d. Classified as an asset be allowed deduction as depreciation expense over the
span of 25 years
379. As regards a revenue bill, which of the following is incorrect?

a The President may recommend a revenue bill to Congress
b The senate may propose amendments if the bill originates from the house of
representatives
c The house of representatives may propose amendments if the bill originates
from the Senate
d A senate version and a House of Representatives version approves separately
and then consolidated with both houses approving the consolidated version
380. Prior to 2018, a tax assessment:

a. Is always presumed to be correct
b. Always prescribes in 3 years
c. Can only be issued by the CIR
d. Can only be questioned by protest
381. Draco was insured under an endownment policy with a value of P500,000. Total
premiums paid by her during the term of premium payments on the policy was
108 | T a x a t i o n
P490,000 from which there was a return of premiums of P40,000. At the maturity
of the policy Draco received P500,000. The income of Draco under the policy is
a. P0 b. P500,000 c. P10,000 d. P50,000
382. Liezel purchased a life annuity for P500,000.00 which will pay her P120,000.00 a
year. The life expectancy of Liezel is 12 years. Under Section 32 of the National
Internal Revenue Code of 1997, which of the following will Liezel be able to exclude
from her gross income:
a. P940,000.00 c.P500,000.00
b. P1,440,000.00 d. P0
Use the following for the next four (4) questions:

The following data were taken from the financial statements of Chen Corporation for
2018 Philippines Abroad
:
Gross sales P10,000,000 P5,000,000
Sales Returns 200,000 -
Cost of goods sold 3,500,000 2,250,000
Operating expenses 2,800,000 1,100,000
Interest income from trade
receivable 100,000 50,000
Interest income from BPI deposits-
Phils. 100,000 -
Interest income from BPI deposits- - 80,000
USA
Interest income- FCDU` 150,000 -
Income from money market
placement 200,000 100,000
Dividend income from domestic
Corporation 75,000 -
Dividend income from resident
corporation 45,000 -
Dividend income from nonresident
corporation - 30,000
109 | T a x a t i o n
Royalty income-in general 30,000 25,000
Royalty income-books 20,000 -
Gain on sale of shares of stock of
domestic corp. held as capital
asset thru local stock exchange;
Selling Price-P500,000 120,000 -
Gain on sale of shares of stock of
domestic corp. held as capital
asset directly to a buyer Selling
price-P650,000 150,000 -
Sale of real property in the
Philippines not used in business,
Cost-P4M;FMV-P8M 5,000,000 -
383. How much is the income tax due and payable assuming the corporation is a
domestic corporation?
a. P1,674,000 c. P2,038,500
b. P1,093,500 d. P2,125,750
384. How much is the income tax due and payable assuming the corporation is a
resident foreign corporation?
a. P1,674,000 c. P2,038,500
b. P1,093,000 d. P2,125,750
385. How much is the final withholding tax assuming the corporation is a domestic
corporation?
a. P81,250 c. P92,500
b. P90,500 d. P96,750
386. How much is the final withholding tax assuming the corporation is a resident
foreign corporation?
a. P81,250 c. P92,500
b. P90,500 d. P96,750
110 | T a x a t i o n
387. Which of the following is not an intangible personal property situated in the
Philippines?
a Shares, obligations or bonds issued by a foreign corporation b Shares,
obligations or bonds issued by a domestic corporation
c Shares, obligations or bonds issued by a foreign corporation 85% of the business
of which is located in the Philippines
d Shares, obligations or bonds issued by a foreign corporation if such shares,
obligations or bonds have acquired business situs in the Philippines
388. Who has the authority to collect deficiency taxes above 1 million pesos?
a. Secretary of Finance
b. RDO
c. CIR or his duly authorized representative
d. CIR exclusively on his own
Skylar also had the following income

2017 2018
Lotto winnings P25,000 P26,000
Interest on FCDU 12,000 15,000
Gain on sale of shares of stock subject to CGT 150,000 100,000
389. Compute the final tax for year 2017?

a. P900 c. P10,900
b. P10,000 d.P11,000
390. Compute the final tax for year 2018?

a. P5,200 c. P7,450
b. P5,450 d.P22,450
391. Mr. Santiago purchased a life annuity for P100,000 which will pay him P10,000 a
year. The life expectancy of Mr. Santiago is 12 years. Which of the following will
Mr.
Santiago be able to exclude from his gross income?
a. P100,000 c. P20,000
111 | T a x a t i o n
b. P10,000 d. P120,000
392. Properties acquired by gratuitous title before the marriage and brought into the
marriage are classified as:
Separate properties under conjugal partnership of gains
Separate properties under absolute community of properties
a Only I is correct b Only II is correct c Both I and II are correct

d Both I and II are incorrect
393. Properties acquired by gratuitous title before the marriage and brought into the
marriage are classified as:
Separate properties under conjugal partnership of gains
Separate properties under absolute community of properties
a. Only I is correct
b. Only II is correct
c. Both I and II are correct
d. Both I and II are incorrect
394. Which is not a power of the BIR Commissioner?

a. Terminate taxable period
b. Promulgate rules and regulations
c. Make arrests and seizures
d. Prescribed real property values
Weasley,a sole proprietor, made the following contributions during 2010:
Contributions to priority activities P100,000

Contributions to accredited non-profit charitable institution 120,000
Contributions to the government for public use 100,000
395. Weasley reported P500,000 net income after the above contributions. Compute
the deductible contribution expense.
112 | T a x a t i o n
a. P320,000 b. P302,000 c. P261,000 d. P220,000
396. During the current year, a nonresident alien not engaged in trade or business came
to the Philippines to fulfill a contract commitment. He stayed at one of the five-star
hotels in Makati City for which he paid a fringe benefit tax of P 30,000. How much
was the hotel bill shouldered by his local contact?
a. P120,000 b. P 90,000 c. P75,000 d. P190,000
397. One of the statements that follow is correct. Which is it? A deed of donation was
executed by a Donor residing in Makati, in favor of a Donee residing in Manila. The
Donee executed a deed of acceptance in the city of manila. The donor’s tax return
shall be filed with the Bureau of Internal Revenue Office:
a. At the residence of the Donor
b. At the residence of the Donee
c. At the residence of the Donor or the Donee, whichever the Donor chooses
d. Neither at the residence of the Donor nor at the residence of the Donee
398. Ronald Aquino was assessed on January 10, 2009. Ronald did not protest. The
assessment become final and executory. BIR issued a warrant of distraint on
December 2014. What should the taxpayer do? a Raise defense of prescription b
File a Protest for Reinvestigation
113 | T a x a t i o n
c Pray for temporary restraining order with CTA d File
criminal complaint with the Office of the Ombudsman.
SysRq a Resident Corporation provided you the following information for the year 2017:
Sales net of withholding tax in the Philippines P4,455,000

Sales without the Philippines 5,500,000
Capital Gains 500,000
Direct Cost 3,800,000
Dividend paid to stockholders 650,000
399. Determine the Taxable Income

a. P6,200,000
b. P6,700,000
c. P4,500,000
d. P2,790,000
400. Phil Co. raised its total outstanding shares by 40% to 70,000,000. This was made by
conducting an initial public offering through the Philippine Stock Exchange. The IPO
shares were offered and sold for P20 per share. The stock transaction tax is
a. P16,000,000 c. P7,000,000
b. P8,000,000 d. P4,000,000
A VAT-registered corporation has the following data taken from the books of accounts
for the first calendar quarter of 2015:
Sales returns and allowances P 100,000
114 | T a x a t i o n
401. How much is the VAT payable?
a. P220,950 b.P460,950 c. P73,550 d. None of the choices
402. With the consent of her husband and on account of their daughter’s forthcoming
marriage, Inday donated a conjugal real property to the daughter. The zonal value
of the property is P1,500,000 but its market value per the tax declaration is
P1,000,000. Unpaid mortgage on the property is P300,000 and the unpaid realty
tax is P100,000 which were assumed by the donee-daughter. The taxable net gift of
Inday is :
a P550,000 b
P540,000 c
P300,000 d
P290,000
403. What is the percentage tax rate on income of banks and non-bank financial
intermediaries performing quasi-banking functions, other than dividends and
equity shares and net income of subsidiaries?
a. 5% c. 0%
b. 3% d. 7%
404. What is the rate of ta if the corporation is domestic and recipient stockholder is
another domestic corporation?
a. 30% c. 10%
b. 20% d. Exempt
Rural Bank of Gumaca, Inc. (RBG) shows the following receipts during a quarter:
Interest income from more than 5 year loans P1,000,0

00
Interest income from less than 5 year loans 6,000,00
0
Gain on sale of ROPA 400,000
115 | T a x a t i o n
Rental income from ROPA 200,000
Service fees 800,000
Dividend income 100,000
405. Assuming RBG is not a cooperative bank, compute the gross receipt tax.
a. P415,000 b. P408,000 c. P385,000 d. P208,000
An operator of a disco house and karaoke KTV has the following data for the month of
January, 2008 (net of applicable taxes):
Sales of food and refreshments
Cash sales P 300,000
Credit card sales 200,000
Sales of wines and liquors
Sales on account 500,000
Cash sales of cigars and cigarettes 100,000
Accounts receivable, January 1 (wines and liquors) 300,000
Cash sales of wines and liquors 600,000
Accounts receivable, January 31 (wines and liquors) 200,000
406. How much is the amusement tax due and payable?

a.P480,000 b. P324,000 c. P270,000 d. None of the choices
A resident citizen, married, with two qualified dependent children has the following
income and expenses for the year 2008:
Gain from sale of shares of stock listed and traded in the local stock exchange,
(Selling Price, P100,000) P 30,000
Business expenses, USA 300,000
Interest income, peso bank deposit BPI-Manila 20,00
0
Gross income, Philippines 3,000,0
00
Interest income, US dollar deposit, BPI-Manila 50,00
0
Gross income, USA 2,000,0
116 | T a x a t i o n
Gain from sale of apartment house and lot 00
(Selling Price, P3,000,000: FMV, time of sale P5,000,000) 500,0
00
Gain from sale of share of stock not traded in the local exchange 150,0
00
Business expenses, Philippines 5,000,000
407. How much is the percentage tax?

a. P300,000 b. P1,500 c. P500 d. None of the choices
Dina Cabangon, a resident citizen, single, died leaving the following properties with their
fair market value, charges and deductions:
Property inherited 5 ½ years ago with a fair market
value of P1,000,000 when inherited P1,400,000 Property acquired through own labor
3,600,000
Actual funeral expenses 240,0
00
Judicial expenses 200,0
Claims against the estate: 00
Evidenced by a notarized loan agreement 40,00
0
Evidenced by a promissory note (not notarized) 20,00
0
408. .The Vanishing deduction is:
a. None c.P182,400
b. P181,600 d. P364,800
409. The taxable net estate is:

a. 3,358,400 c.3,540,000
b.3,377,600 d.3,560,000
410. Ignoring the estate tax, the distributable net estate is:
a. 3,536,000 c. 3,540,000
b. 3,717,600 d. 3,560,000
117 | T a x a t i o n
411. When it comes to VAT, to whom is the burden imposed? (Who pays the tax)
a. Seller c. Consumer
b. Buyer d. Supplier
412. In case of taxable dividends, what is the rate of tax if the recipient stockholder is
non-resident alien engaged in business from a domesic corporation?
a. 30% c. 10%
b. 20% d. Exempt
413. Which is correct statement?

a. If the monthly aggregate acquisition cost of capital goods
exceeds P1,000,000, the input VAT shall be allocated over a period of 60
months starting from the month of purchase.
b. The export sales of non-VAT taxpayers are exempt from VAT.
c. The excess of input VAT over standard input VAT on
government sales is a taxable gain subject to income tax.
d. Monthly VAT is due 25 days from the end of each month with
the quarterly VAT payable 20 days from the end of each quarter.
414. A domestic common carrier by air has the following data for the month:
Gross receipts from transport of passengers from Manila to Cebu P2,000,000

Gross receipts from transport of passengers from Manila to Hongkong 2,500,000
Gross receipts from transport of passengers from Manila to Cebu 1,500,000
How much is the common carrier’s tax for the month?

a. P60,000 b. P30,000 c. P15,000 d.None
415. HiroKatsu, a Japanese singer, has a one-night concert at the MOA Arena. He is paid
P 500,000. He has expenses while in the Philippines. His agent approaches you to
consult whether the full amount of P 500,000 will be subject to Philippine income
tax. What will your advice be?
a His income of P 500,000 will be reduced by his expenses in the Philippines for
118 | T a x a t i o n
Philippine income tax purposes b His income of P 500,000 will be subject to
Philippine income tax without any deduction
c His income of P 500,000 will not be subjected to Philippine income tax because the
concert for one night only. d His income of P 500,000 will not be declared for
Philippine income tax purposes because the BIR will not know it.
416. TPP is engaged in both merchandising and service business. TPP is VAT registered
enterprise with the following for the quarter: Cash sales P400,000. Installment
sales P100,000. Installment collection P30,000. Returns P20,000. Quota Rebates
P10,000. Services provided P150,000. Collection for services P75,000. How much is
the output VAT?
a. P66,600 c. P78,000
b. P65,400 d. P66,000
417. Statement 1. When a property, other than real property in the Philippines classified
as capital asset. is sold, exchanged, transferred for less than full and adequate
consideration in money or money’s worth, the amount by which the fair market
value of the property exceeded the consideration shall be deemed a gift and
subject to donor’s tax and subject to donor’s tax as a general rule.
Statement 2. A sale, exchange or other transfer of property made in the ordinary
course of trade or business shall be considered always as made for an adequate and full
consideration in money or money’s worth and will not result in a gift for donor’s tax
purposes.
a. Both statement are true.

d. Only statement 2 is true , but not statement 1.
418. Wendy shows the following input VAT during a quarter:
Deferred input VAT P150,000

Allocation of current input VAT:
Regular sales P200,000
119 | T a x a t i o n
Zero-rated sales 300,000
Sales to the government 100,000
Exempt sales 50,000
Compute the creditable input VAT.

a. P800,000 b. P700,000 c. P650,000 d.
P350,000
419. The following capital good acquisitions happened during a first month of the first
quarter of the current year (exclusive of VAT):
Office computer (estimated life 3 years) P100,000
Office furniture (estimated life 5 years) P200,000
Vehicle for land transport (estimated life 5 years) P700,000
How much input tax can your client credit against its output tax for the month?
a.P36,000.00 c. P3,7333.333
b. P120,000.00 d. None of the choices

I – Once excise tax is paid, VAT shall not be paid.
II – Taxpayer can be file VAT and percentage tax return in the same quarter.
a True, True b True, False

c False, True d False, False
421. The taxpayer is a VAT-seller of goods. Data VAT not included, for a month follow:
Gross sales, less sales discounts and sales
Return and allowance P 900,000
Purchases of goods from
Vat Registered taxpayer 180,000
Non-VAT taxpayers 40,000
Billing for purchase of service from
VAT-registered taxpayer 20,000
Payment for purchases of supplies from
120 | T a x a t i o n
VAT-registered taxpayer 48,000
Salaries of employees 80,000
Payment to manila waters corp 50,000
Other operating expenses 160,000
The value-added tax payable for the month is:

a. P67,440 b. P72,240 c. P78,240 d. P80,640
422. Hagrid, 63 years old grandmother, was treated by her grandchildren Conrado ,
Crispin and Pedro to Max's restaurant during grandparents day and their total bills P
2,240.00. How much is the discount of the senior Citizen
a. P 100.00 b. P 160.00 c. P 200.00 d. P 400.00
Domingo, single but head of the family, Filipino, and resident of Pasig City, died
intestate on November 15, 2014. He left the following properties and interest;
Account’s Fees 500,000
Proceeds of life insurance where he named his state as
irrevocable beneficiary 1,000,000
Household furniture and appliances 100,000
Vacation house and lot in Florida, USA 1,500,000
Claims against a cousin who has assets of P10,000 and liabilities
of P100,000 100,000
Car which is being used by his brother in Cavite 500,000
Shares of stock in ABC Corp, a domestic enterprise 100,000
House and lot (family home) in Pasig 800,000
Medical expenses of last illness 600,000
Agricultural Land in Cavite which he inherited from his father 2,000,000
423. The compulsory heirs of Domingo approach you and seek your assistance in the
settlement of his estate for which they have agreed to the above-stated professionals
fess. What is the net taxable estate of the decedent?
a. 2,710,000 b. 2,800,000 c. 3,610,000 d. 3,700,000
121 | T a x a t i o n
424.Which of the following statements is false? The Board of Investments a Assists
Filipino and foreign investors to venture and prosper in desirable areas of economic
activities.
b Is tasked to promote investments, extend assistance, register, grant incentives
to and facilitate the business operations of investors in export-oriented
manufacturing and service facilities inside selected areas throughout the
country as PEZA Special Economic Zones.
c Is the lead government agency responsible for the promotion of investments in
the Philippines.
d Assists Filipino and foreign investors to venture in food processing, construction,
metal products, telecommunications, power and infrastructure projects among
other
425. Advance Learning Institute, an educational institution provided the following data
for current taxable year:
Income from tuition fees P3,500,000 School

miscellaneous fees 1,500,000
Dividend income:
Domestic corporation 2,000,000
Foreign corporation 2,000,000
Rent income (net of 5% withholding tax) 1,900,000 Operating
expenses 4,000,000
The income tax payable of the school is:
a P1,750,000 c P500,000 b P1,650,000 d P400,000
426. Statement 1. The property belongs to the heirs at
the moment of death of the ancestor as completely as if
the latter had executed and delivered to the former a
deed for the same before he died.
Statement 2. The obligation to pay the estate tax arises as of the time of the
decedent’s
122 | T a x a t i o n
c. Statement 1 is correct but not statement 2
d. Statement 2 is correct but not statement 1
427. Which business is required quarterly submission of Percentage Tax Return? a.

International Carriage
b. Banks
c. Overseas Communication
d. Amusement places
428. Which is not a zero-rated sale of goods or service?

a. Transmission of messages message originating from the
Philippines to abroad other than news services, embassies and diplomatic calls.
b. Sale of gold to the Bangko Sentral ngPilipinas
c. Sale of electricity from hydropower and solar power plants
d. Transport of passengers by air or sea from Philippines to abroad
The records of A Travel Hotel show the following, net of VAT

No. of Rooms Ave, Monthly Rent Per Room Annual Rent per Room
10 Php 12,000 Php 1,440,000
10 15,000 1,800,000
20 20,000 4,800,000
429. The output tax for the year is

a. Php 964,800 b. Php 792,000 c. Php 576,000 d. Php 388,800
430. Which of the following does not characterize a capital asset?

a. It may be real or personal property.
b. It is not always subject to holding period.
c. It is normally subject to value added tax when sold.
d. It is always subject to a final tax.
431. Ms. Juana Cruz, not VAT-registered, was sent a package of goods by her sister who
was abroad. The package was claimed by Juana. The Bureau of Customs required
123 | T a x a t i o n
her to pay VAT on importation. Juana refused to pay the tax on the ground that she
was not VAT-registered and therefore not an importer. Was Juana’s ground in
refusing to pay VAT correct?
a Yes. Because only VAT-registered importers should be subject to VAT. b No.
because importations, unless exempted, should be subject to VAT. c Yes.
Because the goods were for her personal use, and therefore, she was not an
importer.
d No. Because the package of goods sent by her sister had value.
432. A married decedent left the following:

Exclusive property P3,000,000
Community property 5,000,000
Exclusive deduction 850,000
Community deduction 450,000
Among those included in the exclusive property were the following:

A Toyota avanza car which was received as gift 18 months before the death of the
present decedent. FMV date of donation, P500,000; FMV date of date, P400,000. A
piece of a residential lot inherited from the decedent’s father who predeceased him 3 ½
years ago. FMV at the time of inheritance was P800,000 (no mortgage indebtedness);
FMV at the time of death of the present decedent is P900,000. The lot was mortgaged
during the marriage for the benefit of the family for P300,000 which was paid by the
decedent before he died.
The vanishing deduction is:

a. P435,500 c
b. P469,000 P536,000
d.
P636,500
433. S1: Under the TRAIN law, foreign currency denominated sale of goods to a
nonresident customer in the Philippines is subject to 0% VAT.
S2: Monthly lease of residential unit amounting to P15,000,000 is subject to VAT.
124 | T a x a t i o n
S3: Input tax on purchases of capital goods, aggregate acquisition cost of which
exceeds P1M, can now be claimed in full upon acquisition.
a. True, True, True

b. True, False, True
c. False, True, False
d. False, False, False
434. A Cooperative association is requesting the BIR exempt it from the payment of
the value-added tax on its purchases of prime commodities from suppliers and
manufacturers for the reason that it is enjoying exemption from all taxes under the
Cooperative Code of the Philippines.
Statement 1. The association is not subject to the value-added tax because the tax is
imposed by law on the seller and not the buyer.
Statement 2. The VAT component of any purchase is not a tax association but rather
a part of the purchase cost hence is no tax to complain about in the first place. a. Both
statements are true.
b. Both statements are false.
c. Statement 1 is true, while statement 2 is false.
d. Statement 2 is true, while statement 1 is false.
Grindelwald, Inc. reports the following income in 2010:

Taxable income P400,000
NOLCO claimed 600,0
00
Estimated 2010 income tax paid 100,0
00
Capital gains, net of tax 50,0
00
Passive income, net of tax 180,0
00
Exclusions from gross income 120,0
00
Exempt income 200,0
125 | T a x a t i o n
00
Dividends declared 400,0
00
Reasonable appropriation 300,0
00
435. If Grindelwald, Inc. was assessed for improperly accumulating profit in 2010,
how much is the improperly accumulated earnings tax?
a. P105,000 c. P 75,000
b. P103,000 d. P 73,000
Systech, a Resident Corporation provided you the following information for the year
2015:
Sales net of withholding tax in the Philippine P 4,455,000

Sales without the Philippine 5,500,000
Direct Cost 3,800,000 Dividen
paid to stockholder 650,000
436. In case of taxable dividends, what is the rate of tax if the recipient is a resident
citizen and the declaring corporation is domestic?
a. 30% b. 20% c. 10% d. Exempt
437. Apol, a citizen and resident of the Philippines, is a professional boxer. In a

professional boxing match held in 2018, he won prize money in United States (US)
dollars equivalent to P800,000,000.
Question1: Is the prize money paid to and received by Apol in US taxable in the
Philippines?
Question2: May Apol’s prize money qualify as an exclusion from his gross
income?
Question 3: The US already imposed and withheld income taxes from Apol’s prize
money. How may Apol use or apply the income taxes he paid on his prize money to the
US when he computes his income tax liability in the Philippines in 2018?
126 | T a x a t i o n
Answer to Question 1:
Yes. Under the Tax Code, the income within and without of a resident citizen is taxable.
Since Apol is a resident Filipino citizen, his income worldwide is taxable in the
Philippines.
Answer to Question 2:
No. under the law, all prizes and awards granted to athletes in local and international
sports competitions whether held in the Philippines or abroad and sanctioned by their
national sports association are excluded from gross income. However, in this case,
there is no showing that the boxing match was sanctioned by the Philippines National
Sports Commission. Therefore, the prize money is not excluded.
Answer to Question 3.
Apol may avail of tax credit against his tax liability in the Philippines for taxes paid in
foreign countries. He may also choose to classify such income tax payments as
deduction from his gross income. He has to signify in his income return hid desire to
avail the deduction.
a All the answer to the questions are correct.

b Only the answers to Questions 1 and 2 are correct. c Only the
answer to question 3 is incorrect.
d All the answers to the questions are incorrect.
438. It refers to a plea of re-evaluation of an assessment on the basis of newly

discovered or additional evidence that a taxpayer intends to present. It may also involve
a question of fact or of law or both.
a. Request for reconsideration
b. Request for informal conference
c. Request for reinvestigation
d. Request for compassion
439. Which among the following reduces the gross estate (not the net estate) of a
citizen of the Philippines decedent for estate taxation purposes?
127 | T a x a t i o n
a Property previously taxed b
Transfer for public purpose c
Standard deduction of P1 million
d Paraphernal property of the surviving spouse
X Company, is engaged in a hardware business. It uses accrual basis of accounting in its

financial statements.
Gross Revenue P3,500,000

Sales Return 200,000
Increase in Accounts Receivable, VAT inclusive 224,000
Increase in Inventory, net of VAT 150,000
Purchases 1,000,000
Supplies (40% from VAT registered) VAT exclusive 600,000
Services (60% from VAT registered) VAT exclusive 500,000
Other Operating Expenses 200,000
440. Compute the Output VAT

a. P420,000 c. P372,000
b. P396,000 d. P360,000
441. Compute the creditable input VAT

a. P120,000 c. P166,800
b. P184,800 d. P108,000
442. Determine the Taxable Income

a. P1,000,000 c. P1,350,00
b. P1,082,800 0
d. P1,500,00
0
443. The following are deductible b a non-resident alien donor exc
y , ept
a Only 1st statement is correct
b 1st and 2nd statement is
128 | T a x a t i o n
correct c 1st and 3rd
statement is correct d All
statement are correct
Sirius, realty dealer, sold the following properties during 2010:

Properties sold Holding period Gain/(Loss)
Principal residence Long-term P 800,000
Stocks sold directly to buyer Short-term 200,000
Personal car Long-term (40,000)
Office equipments Long-term 50,000
Bonds, held as investment Short-term 80,000
444. Compute the net capital gains subject to regular tax.

a. P 0 b. P85,000 c. P90,000 d. P110,000
Wendy shows the following input VAT during a quarter:
Deferred input VAT P150,000

Allocation of current input VAT:
Regular sales P200,000
Zero-rated sales 300,000
Exempt sales 50,000
445. Compute the creditable input VAT.

a. P800,000 b. P700,000 c. P650,000 d. P350,000
Use the following data for the next two (2) Questions:
Lessor, had the following information for the given taxable year.
Cost of leasehold improvement P1,000,000
Annual rent 100,000
129 | T a x a t i o n
The estimated life of leasehold improvement is 50 years. The term of the lease is 40
years. At the end of the twentieth (20 th) year, the lease was terminated for valid causes
done by the lessee.
446. What is the income to be reported by the lessor at the end of the 20 th year?
a. P100,000 c. P605,000
b. P125,000 d. P700,000
447. How much is the allowable deduction of lessee on the 20 th year?

a. P600,000 c. P100,000
b. P625,000 d. P500,000
Mr. Pedro Juan, resident decedent died on December 10,2014. He was interred on
December 24,2014. The following expenses were incurred:
Value corresponding to the plot where he is buried 50,000

Cost for the upkeep of monument or mausoleum 12,000
Mourning apparel of the surviving spouse and unmarried minor children of the
deceased bought and used on the occasion of the burial 20,000 Expenses for the
deceased’s wake, including food and drinks 30,000
Medical expenses of the last illness 15,000
Card of thanks published on December 26,2014 5,000
Publication charges for death notices published on December 12, 2014 10,000
448. The value corresponding to the plot where he is buried and the cost of the upkeep
of monument or mausoleum are covered by a memorial plan. The expenses for the
deceased’s wake, including food and drinks were borne or defrayed by relatives
and friends of the deceased. The administrator of the estate approached you with
the questions below. How much were the actual funeral expenses to be considered
for estate tax purposes?
a. P142,000 b. P110,000 c. P80,000 d. None of the choices
449. The following real properties were owned by a decedent head of family who was a
Filipino citizen at the time of his death:
130 | T a x a t i o n
Vacation house, USA P2,000,000
Beach house, La Union 1,500,000
House and lot (family home), Bulacan 1,200,000
House and lot (dwelling place when in Metro 2,500,000
Manila, Makati City
How many should be included in and deducted from the gross estate?
Amount as gross estate Amount as deduction a
P5,200,000 P1,200,000 b
7,200,000 2,000,000 c
5,000,000 2,000,000 d
7,200,000 1,000,000
450. A domestic corporation in a real estate business sold a building.

Statement 1. The sale is subject to the value-added tax because sale of goods and
properties are subject to the value-added tax and real estate it within the meaning of
property.
Statement 2. The sale is not subject to the value added tax because it is not sale of
goods or services.
a. Both statements are true.

d. Only statement 2 is true, but not statement 1
451. Statement I: Sale of goods to Development Bank of the Philippines (DBP) is

effectively subject to VAT at zero-rate.
Statement II: Sale of services subject to other percentage taxes shall not be subject
to VAT.
Statement III: Persons or firms engaged in the processing of canned fruits and
vegetables shall be allowed to have presumptive input tax for VAT purposes.
a Only statement III is false c. All of the statements are

true b Only statement I is false d. Only statement II is true
131 | T a x a t i o n
452. Vanderwoodsen is a radio-TV broadcasting franchise grantee. The previous year, its
gross receipts did not exceed P 10,000,000. In the first month of the current year, it
had the following data:
Gross receipts, sale of airtime P 2,000,000
Payments received from user of radio station’s communications
facilities for overseas communications 500,000
How much was the overseas communications tax?
a. P250,000 b. P200,000 c. P75,000 d. P50,000
453. One is not entitled to tax credit for taxes paid to foreign country a Resident alien
c Resident alien b Non-resident citizen d Non-resident alien
454. The decedent was a married man with a surviving spouse and the following data:
Exclusive properties P2,500,0

00
Conjugal real properties 5,000,00
0
Conjugal family home 1,500,00
0
Conjugal ordinary
deductions:
Funeral expenses P200,000

Other deductions 1,000,000 1,200,00
0
0
Additional information:
20% of the funeral expenses were borne by the estate.
Other deductions include P200,000 judicial expenses incurred to settle the conflicting
claims of the heirs.
132 | T a x a t i o n
The taxable net estate is:
a 2,650,000 c 3,180,000 b 2,980,000 d 4,080,000
455. A PEZA registered enterprise operating in the Philippines for the year 2018 was
given an Income Ta holiday for 3 years, presented the following financial data:
Sales to outside customs territory P5,000,00

0
Sales within customs territory 1,000,00
0
Cost of sales outside customs territory 3,000,00
0
Cost of sales inside customs territory
800,000
Administrative Expenses 1,200,00
0
How much is due to BIR?
a. P120,000 c. P300,0
b. P110,000 00
d. P420,0
00
456. Congress passed a law subjecting government owned and controlled corporations
(GOCCs) to income tax. Is the law valid?
a Yes, because all government agencies and instrumentalities are subject to tax. b
Yes, because the GOCCs are essentially commercial by operation. c No,
because government agencies are exempt. This would pose violation of the
equality clause in the constitution.
d No, because GOCCs are constitutionally exempted from paying taxes.
457. Pedro sold his personal car, which he purchased in 2016at a cost of P300,000. He
sold the painting to Juan on the following terms:
June `1, 2018 down payment P100,000
August 1, 2018 installment due 100,000
133 | T a x a t i o n
October 1, 2018 installment due 200,000
For the year 2018, Mike will report a gross income of:
a. P900,000 c. P300,000
b. P450,000 d. P150,000
458. Using the same data in the preceding number, assuming Mike is a car dealer and
the car sold is part of inventory for sale in the ordinary course, how much will he
report as gross income for 2018?
a. P150,000 c. P450,000
b. P300,000 d. P900,000
459. John transfers his car to his brother Samuel for P400,000. The sold car costs
P500,000. At the time of the transfer, the car has a fair market value of P300,000.
John inquires from you whether or not he is required to file donor’s tax return and
pay donor’s tax. What will you tell him?
a He has to file a donor’s tax return because the transfer will be considered a
transfer for insufficient consideration because the selling price is less than the
cost.
b He does not have to file a return because it is a transfer for sufficient
consideration, hence, no donor’s tax is due. c He has to file a donor’s tax return
and pay donor’s tax because transfers to relatives are generally subject to
donor’s tax. d He does not have to file a return because the BIR will not be in a
position to know the transfer as it is done between brothers.
460. Under what case the estate tax return shall be accompanied by a statement duly
certified to by an independent Certified Public Accountant (CPA)?
a In case where it shows a gross estate value of more than P2,000,000 b In case
where it shows a gross estate value of P2,000,000 and above c In case where
it shows a gross estate value of P2,000,000 and below d None of the above
JDL Grocery store, made the following transactions:
134 | T a x a t i o n
Taxable Sales P4,000,000
Agricultural Sales (VAT-exempt) 1,000,000
Sales to senior citizens 1,000,000
Cost-of-sales – taxable sales 3,500,000
Cost-of-sales – exempt sales 1,000,000
Operating Expenses 780,000
Direct Cost (unallocated) 600,000
461. VAT payable
a.P12,000 c. P60,0
b. Excess input tax of P12,000 00
d. P 0
462. Normal Income Tax
a. P30,000 c. P36,0
b. P13,800 00
d. P28,8
00
Mr. A , CPA practioner , is also employed with a manufacturing company and receives
the following for the year :
Salary 150,000.00
Overtime 30,000.00
13th monthly 15,000.00
Deposit of Client 20,000.00
Retainer fee of 5,000/month 60,000.00
Out of pocket charged to client 80,000.00
Capital Gains, car 25,000.00
463. How much is subject to withholding tax?

a. 340,000 b. 320,000 c. 240,000 d. 160,000
464. For the given year 2015 the following information from business:
Gross Receipts from Business P 900,000

135 | T a x a t i o n
Rental Income 650,000
Operational Expenses 400,000
Real Properties 17,000,000
Compute Corporate Community Tax

a. P 7,920
b. P 7,560
c. P 1,120
d. P10,500
465. Which of the following powers of the Commissioner of Internal Revenue cannot be
delegated?
a. The examination of tax return and tax due thereon
b. To refund or credit tax liabilities in certain cases
c. The power to compromise or abate any tax liability involving basic deficiency tax
of P500,000 and minor criminal violations
d. The power to reverse a ruling of the Bureau of Internal Revenue
466. West PhilSea Oil abandoned its facility in 2010 and claimed abandonment loss
of P300,000 for its unrecovered investment in its oil facilities. The 2010 taxable income
before provision for such loss was P200,000. With increasing prices of crude oil in 2012,
West PhilSea Oil re-commissioned the facility to use. How much will be included in gross
income in 2012.
a. P300,000 b. P200,000 c. P100,000 d. P 0
467. Philippine Chooks-to-go 3x3 basketball team led by Alvin Pasaol competed well
during the recently concluded FIBA 3x3 World Championship held in Doha, Qatar on
April 16-21, 2019. They received $10,000 cash prize from International Basketball
Federation (FIBA), the world governing body of basketball, for reaching the quarterfinals
to the tournament. By virtue of the honor brought to the country, each team member
also received P50,000 from SamahangBasketbolistangPilipinas (SBP), the national sports
association for basketball in the Philippines. The team captain, Alvin Pasaol, likewise
received P200,000 from “Chooks-to-go Bounty Agro Ventures, Inc.” for being one of its
new endorsers.
136 | T a x a t i o n
Statement 1: The $ 10,000 received from FIBA and P50,000 from SBP are exempt
from income tax.
Statement 2: The P200,000 received from the Chooks-to-go is subject to 20% final
withholding tax.
a. Only statement 1 is correct.

b. Only statement 2 is correct.
c. Both statements are correct.
d. Both statements are correct.
A VAT-registered practitioner, single and resident citizen, has five dependents living with
and dependent upon him for chief support. Two of the dependents are minors who are
legally adopted. One is a child out of wedlock, person with disability, 25years old. The
other two are his brothers, who are both minors. During the first quarter of the current,
he earns and spends the following (net of applicable taxes):
VAT payments for January and February P 100,000

Cost of service (40% VAT-subject) 500,000
Salary from part-time teaching job, net of 5% withholding tax 123,500
Gross receipts from practice of profession,
net of 10% withholding tax 1,710,000
Expenses in connection with the practice of profession
(80% VAT-subject) 100,000
468. How much is the tax payable when the VAT return is filed for the quarter?
469. When is the time for filing of the estate tax return?
a. Two (2) years from the decedent’s death
b. Six (6) years from the decedent’s death
c. Two (2) months from the decedent’s death
d. Thirty (30) days from the decedent’s death
137 | T a x a t i o n
470. As a frequent traveler, an avid fan of tourism and outdoor adventure you seek
employment in a transportation company in order for you to avail fare discounts and
travel promotions. In your job interview, one of your potential employer LAS Corp.,
common carries by air and sea, asked you if LAS is a domestic corporation which among
the following statement is true?
I. LAS is subject to VAT;
II. LAS is subject to VAT and OPT;
III. LAS carriage of goods are vatable but carriage of passenger is exempt from VAT;
IV. LAS domestic carriage goods or passenger is subject to VAT but its international
carriage of goods or passenger is subject to 0 rated VAT.
a. Only i
b. Both i and ii
c. Both ii and iii
d. Both i and iv
MangTado, has an apartment building situated at Mabalacat, Pampanga.

Owner’s Declaration showed the following valuation:
Land – P9,000,000
Building – P4,000,000
Assessor’s Value per assessment rolls:

Land – P7,000,000
Land Use Assessment Levels

Residential 20%
Agricultural 40%
Commercial, Industrial and Mineral 50%
Timberland 20%
Special classes: cultural, scientific 15% Hospital,
and water districts 10%
471. How much is the assessed value?
a. P9,000,000 c. P14,000,000
b. P13,000,000 d.P16,000,000
138 | T a x a t i o n
472. Basic real property tax
a. P180,000 c. P90,000
b. P65,000 d. P130,000
473. What is the maximum penalty for local taxes?
a.12% c. 36%
b. 24% d. 72%
474. Assessed value shall be based on:
a. Actual use
b. Owner’s declaration
c. Assessor’s declaration
d. Fair market value
475. Statement 1 – individuals enjoying income tax exemption such as those registered
under the Barangay Micro Business Enterprise (BMBEs) are not qualified to avail of
double or multiple tax exemptions under different laws.
Statement 2 – BMBEs are not exempted from the payment of other internal revenue
taxes such as the value-added tax (VAT); the percentage taxes (OPTs) the documentary
stamp taxes costs; and transaction tax etc.
a Both statement are correct b Both statement are
wrong c Statement 1 is correct but statement 2
is wrong d Statement 2 is correct but statement
1 is wrong
476. Ms. Henson retired from her job after 25 years of service. She joined the company
at the age of 23 and was promoted from an accounting clerk to VP Finance. She
was paid P2,000,000 total retirement pay from the employer’s contributory
pension plan which was duly registered with the BIR. Out of the total proceeds,
Ms. Henson contributed P600,000. This was Ms. Henson’s first retirement from
employment. How much is not included in gross income.
a. P2,000,000 b. P1,400,000 c. P600,000 d. P 0
139 | T a x a t i o n
477. Which of the following taxes may be deducted from gross income? a.
Percentage tax on sale of listed stock
b. Business permit fee paid to the city government.
c. Income tax
d. Tax on interest income on bank deposit
478. Nicolas placed a property under trust in favor of his son, Nicolas II. He designated
Julian as a trustee. Under the term of the trust, Julian has full discretion on what to
do with the income of the property under the trust. Who is the taxpayer for
income tax purposes?
a Nicolas b. Nicolas II c.
Julian d. Trust
479. Statement 1. The donor’s tax shall apply whether the gift is direct or indirect, and
whether the property is real or personal, tangible or intangible, even if the transfer
is merely in trust.
Statement 2. Renunciation by an heir including the surviving spouse of his/he share
in the hereditary estate left by the decedent is exempt from donor’s tax even if done
in favor of identified heir to the exclusion or disadvantage of other co-heirs in the
hereditary estate.
a Both statement are true b Both statement are

false c Statement 1 is true but not statement
2 d Statement is true but not statement 1
480. If LAS is foreign corporation which among the following is true?
i. LAS is subject to VAT;

ii. LAS is exempt from VAT but subject to OPT;
iii. LAS carriage of passenger is exempt from VAT but carriage of goods is subject
to
OPT; iv. LAS carriage of passenger is subject to 0 rated VAT but
carriage of goods is subject to OPT
140 | T a x a t i o n
a. Only i c. Both ii and
b. Both i and ii iii
d. Both i and
iv
481.West PhilSea Oil abandoned its facility in 2010 and claimed abandonment loss of
P300,000 for its unrecovered investment in its oil facilities. The 2010 taxable income
before provision for such loss was P200,000. With increasing prices of crude oil in 2012,
West PhilSea Oil re-commissioned the facility to use. How much will be included in gross
income in 2012.
a. P300,000 b. P200,000 c. P100,000 d. P 0
482. Mr. Tacurong submitted a sworn statement regarding the alleged tax evasion
practices of Chitie Corporation. This led the BIR to recover P20,000,000 unpaid taxes.
How much net tax informer’s reward shall be paid to Mr. Tacurong?
a. P1,800,000 b. P1,600,000 c. P1,000,000 d. P900,000
483. Which of the following properties, if sold, will not be subject to value added tax?
a.10-door commercial units for lease
b. Residential house and lot
c. Condominium office unit
d. Office building of a corporation
484. Mr. Jose Vicente is a sole proprietor engaged in trading business. He consults
you as to what income tax returns he will file. What will your answer be?
a He is required to file quarterly income tax returns only because he is engaged in
business.
b He is not required to file quarterly income tax returns because individuals are
required to file annual returns only.
c He is required to file quarterly returns and annual returns because he is engaged
in business.
d He is not required to file any income tax return because he is a sole proprietor,
hence, exempted from filing returns.
141 | T a x a t i o n
485. NatyGok, Filipina, has one year more to reach the compulsory retirement age of
65 years old as an employee of a private firm. Unfortunately, she met a fatal vehicular
accident that caused her instantaneous death. She is survived by her husband and
received P500,000 from NatyGok’s employer as benefit under R.A. 4917. The amount
that must be included as part of NatyGok’s gross estate is:
a. None, exempt
b. P200,000
c. P250,000
d. P500,000
486. The amount that must be claimed as a special deduction from NatyGok’s gross
estate for the benefit received under R.A. 4971 is:
a. None
b. P200,000
c. P250,000
d. P500,000
487. Going back to number 34 but assuming this time that NatyGok was single when
she died, the amount that must be claimed as a special deduction from the gross estate
arising from the benefit received under R.A. 4971 is:
a. None
b. P200,000
c. P250,000
d. P500,000
488. Referring again to number 34, the taxable net estate arising from the retirement
benefit received under R.A 4971 regardless of whether or not NatyGok died as single or
married is:
a. None
b. P200,000
c. P250,000
d. P500,000
142 | T a x a t i o n
489. Statement 1: In the selection of the objects of taxation, the courts have no
power to inquire into the wisdom, objectivity, motive, expediency or necessity of a tax
law. Statement 2: An imposition can be both a tax and a regulation. Taxes may be
levied to provide means for rehabilitation and stabilization of threatened industry.
Which is correct?
a. Statement 1 only
b. Statement 2 only
c. Both statements
d. Neither statement
Your VAT registered client leases residential and commercial units. During a particular
month, he has the following data:
Rent of 160 residential units at P12,800 per unit P2,048,000
Rent of 50 residential units at P20,000 per unit 1,000,000 Rent of 200
residential units at P10,000 per unit 2,000,000 490. How much is
the VAT exempt rent?
a. P3,048,000 c. P2,000,000
b. P2,048,000 d. None of the choices
491. Sale of orchids by a flower shop which rises its flower in Tagaytay is subject to:
a. 12% c. exempt from vat
b. 0% d. none of the above
492. A stockholder of a closely held corporation owns 100,000 shares before the IPO.
The par value of the share is P1,000,000. During the IPO, the shares are selling at
P12 per share. His broker-friend advises him not to sell his shares during the IPO
but instead wait until after the IPO. After the IPO, the outstanding shares of the
closely held corporation are 1,000,000 shares and are now selling at P14 per share
at the local stock exchange. The stockholder of the closely held corporation
approaches you to seek your advice because he is also planning to sell the shares
directly to his friend and, therefore, not traded through the local stock exchange at
P15 per shares. How much is the percentage if he sells the shares after the IPO?
Jen is engaged in business. The following pertains to her transactions during 2011:
143 | T a x a t i o n
 Sold his personal car which were purchased at P200,000 to a friend who paid
only half of the car’s P500,000 current fair value.
 Sales of merchandise were P800,000 and the cost of goods sold were P600,000.
 Jen acquired several stocks from the Philippine Stock Exchange for speculation.
These stocks have aggregate purchase price of P400,000 but with P700,000 fair
value at December 31, 2011.
 Jen’s house and lot which he acquired for P1,500,000 in 2010 now have current
fair value of P2,500,000.
493. Compute Jen’s total income subject to income tax.

a. P1,800,000 b. P1,550,000 c. P250,000 d. P200,000
494. How much was the taxable net income of the taxpayer who had six dependents
namely:
Jury, child, 25 years old, person with disability
Rich, child, 20 years old, got married during the year to Dennis Karl
Cha, niece, 21 years old, living with the taxpayer and dependent on him for chief
support
Aaron, senior citizen
Jaycob, child, born during the year
Diane, street child, naturally adopted by the taxpayer
a. P5,450,000 b. P5,475,000 c. P5,575,000 d. None of the choices
495. Matatag Construction Corporation purchased the following equipment in its first
month of operation:
Light equipment with useful life of 3 years P300,000
Heavy equipment with useful life of 10 years 4,000,000
How much is the creditable input vat for the month?
a. P8,600 c. P44,000
b. P9,000 d. P516,00
144 | T a x a t i o n
496. Which of the following is false regarding registration of enterprises with the Board
of Investments?
a. Any order or decision of the Board shall be final and executory after thirty (30)
days from its promulgation.
b. If the application is denied by the Board, the applicant may appeal said order or
decision to the Office of the President.
c. Where an appeal has been filed, said order or decision shall be final and
executory ninety (90) days after the perfection of the appeal, unless reversed. d
Applications for registration filed shall be considered automatically approved if
not acted upon by the Board within thirty (30) working days from official
acceptance thereof
497. Northern Crest Corporation reported a P40,000 recovery from bad debts that was
claimed as deduction against gross income in 2009. In 2009, the write-off increased
the operating loss of North Crest to P50,000. How much of the P40,000 recovery is
subject to tax?
a. P60,000 b. P40,000 c. P10,000 d. P 0
498. Three of the following are subject to the value-added tax. Which is the exemption?
a Sales or importation of pet foods. b Sale by a person exempt from the VAT who
issued a VAT receipts from thereon.
c Receipts from leasing of residential units with a monthly rental of P15, 000 per
unit. Whereby the lessor has 50 units for lease.
d Importations by persons who are not VAT registered.
An owner of the mango plantation approached you to inquire whether or not he is

subject to VAT. In the course of your conversation, he also tells you that he has a fruit
canning factory where some of the harvest are manufactured into canned mango. He
gives you the following information for the previous year:
Gross sales of fresh mango P2,500,000
Gross sales of canned fruits 1,900,000
Total P4,400,000
145 | T a x a t i o n
499. Based on the information given to you, what will be your answer to the inquiry of
the mango plantation owner?
a. He is not subject to both VAT and the other percentage tax.
b. He is not subject to VAT on sale of fresh mango but subject to the 3%
percentage tax on VAT –exempt persons on sale of canned fruits.
c. He is subject to VAT on his total gross sales because they exceeded the VAT
threshold amount.
d. He is subject to VAT on his gross sales of canned fruits and to other percentage
tax on his gross sales of fresh mango.
500. Ajinomoto, a Japanese residing in the Philippines, bought garments from a

domestic corporation and immediately exported them to japan. Total value of
export is P280,000. The VAT output tax on the transaction is:
a. P30,000
b. P33,600
c. None, because 0% VAT rate applies.
d. None, because the transaction is exempt from VAT.
Andres is a lessor of commercial spaces to one client. During the year, he received the
following remittance:
Rental, net of 5% creditable withholding tax P 1,900,000
Real property tax 50,000
Reimbursement for utilities used by lessees paid by Andrea 200,000
501. How much will be included in gross income subject to regular tax?
a. P2,250,000 b. P2,050,000 c. P2,000,000 d. P1,950,000
the questions below. Assuming the gross estate of the decedent was P1,000,000.
How much were the deductible funeral expenses?
146 | T a x a t i o n
503. A vat registered construction company has the following data on gross receipts
(exclusive of vat) for January 2019:
• P2,850,000 from Ana, a private property owner, representing payment on
contract price, net of 5% agreed retention fee.
• P100,000 from Lorna, representing payment of 5% retention fee on the contract
price.
• P500,000 from Fe, for materials used in the construction.
How much is the correct vat?

a. P342,000 c. P414,000
b. P402,000 d. P72,360
Rent of 50 residential units at P20,000 per unit 1,000,000
Rent of 200 residential units at P10,000 per unit 2,000,000
504. How much is the VAT –subject rent?

505. Statement 1. In determining the situs of taxation, the subject matter of the tax is
not to be considered at all.
Statement 2. In gratuitous transfer of property, situs of taxation could be the
taxpayer’s residence, citizenship or location of the property

c. Statement 1 is correct but statement 2 is not
d. Statement 2 is correct but statement 1 is not
147 | T a x a t i o n
Bong and Billy are partners in a GPP which realized a Sales of P8,000,000 with
corresponding cost of sales P5,000,000 and Operating Expenses P2,000,000 in year
2018. Bong, single, benefactor of senior citizen has his own income of P400,000 and cost
of sales and expenses P30,000 and P230,000 respectively. While, Billy with one qualified
dependent generated P450,000 income and incurred cost of sales and expenses
P200,000 and P50,000, respectively. They share 70:30 in the profits.
Bong and Billy incurred unliquidated expenses of P100,000 & P50,000, respectively for
the partnership.
506. Taxable income of Bong if he claims itemized deductions:

a. P850,000 c. P740,000
b. P840,000 d. P665,000
507. Taxable income of Billy if he opted for OSD:

a. P500,000
b. P570,000
c. P475,000
d. P495,000
X died intestate on January 1, 2016. His son Y was designated by court as the
administrator. (X is a widow) On April 30, 2016, Y filed a “No Payment” return. On June
30, 2016, BIR issued a Letter of Authority and conducted an investigation which results
to as follows:
The value of the properties as of June 30, 2016:

Real Properties (Family Home) P2,500,000 Personal
Properties 300,000
Cash in Bank 1,000,000
100,000 Shares of Stock, based on the mean of highest and lowest
rate as of June 30, 2016 2,500,000
148 | T a x a t i o n
a) Property Real Property Personal Property Assessed Values P2,500,000
P2,400,000
Zonal Values 2,500,000 2,600,000
b) Only transactions with bank between January 1, 2016 to June 30, 2016 was a
deposit of 180,000 and interest amounting to 20,000.
c) Investment in shares; rates as of January 1, 2016

Closing 4.5
Opening 4.3
High 4.6
Low 4.4
d) Deductions Claimed
Funeral Expenses P 600,000
Mortgage 1,300,000
Medical Expense 800,000
40th day celebration 500,000
508. Compute the Gross Estate

a. P6,300,000 c. P8,400,0
b. P6,350,000 00
d. P9,000,0
509. Determine the allowable deduction
00
a. P3,700,000 c. P4,000,0
b. P3,900,000 00
d. P4,500,0
00
510. If the BIR assessed a tax deficiency which is paid only on September 30, 2016, what
is the total amount due?
149 | T a x a t i o n
a. P173,500 c.P225,550
b. P216,875 d. P234,225
511. If the decedent died in year 2018, compute the tax
a. P141,000 c. P183,300
b. P176,250 d. Zero
512. Ms. Luna retired from her job after 25 years of service. She joined the company at
the age of 23 and was promoted from an accounting clerk to VP Finance. She was
paid P2,000,000 total retirement pay from the employer’s contributory pension
plan which was duly registered with the BIR. Out of the total proceeds, Ms. Luna
contributed P600,000. This was Ms. Luna’s first retirement from employment. How
much is not included in gross income.
a. P2,000,000 b. P1,400,000 c. P600,000 d. P 0
P12 per share. His broker-friend advises him not to sell his shares during the IPO but
instead wait until after the IPO. After the IPO, the outstanding shares of the closely
held corporation are 1,000,000 shares and are now selling at P14 per share at the
local stock exchange. The stockholder of the closely held corporation approaches
you to seek your advice because he is also planning to sell the shares directly to his
friend and, therefore, not traded through the local stock exchange at P15 per
shares. How much is the capital gains tax if he sells the shares directly to his friend?
514. A dealer in securities has the following for the year 2018:
Sale of securities held for sale in the ordinary course P4,000,000

Cost of securities held for sale in the ordinary course 2,500,000
Supplies expense, net of vat 300,0
00
Rent expense, net of vat 500,0
00
150 | T a x a t i o n
The vat payable shall be:
a. P180,000 c. P84,000
b. P96,000 d. nil
Donation of properties (with market values) follows:

Land in Hongkong P2,000,000
Land and building in the Philippines 3,000,000
Shares of stock of a domestic corporation 1,000,000
Shares of stock of a foreign corporation 800,000
Receivable from a friend (residing in the same
country as that of the donor) 100,000
Transfer inter vivos of property in the country of

of the transferor:
Consideration received, P 180,000; fair market value

of property at the time of transfer 400,000
Cancellation of indebtedness of a resident of the

country where the transferor resides, purely as
an act of liberality 40,000
515. The gross gifts if the donor is a citizen or resident of the Philippines:
a. 4,160,000
b. 5,160,000
c. 7,160,000
d. 7,340,000
516. The gross gifts if the donor is a non-resident, not citizen of the Philippines:
a. 3,000,000
b. 4,000,000
c. 5,800,000
151 | T a x a t i o n
d. 7,160,000
517. The gross gifts if the donor is a non-resident, not citizen of the Philippines, and the
reciprocity clause of the estate tax law applies:
a. 3,000,000
b. 4,000,000
c. 5,800,000
d. 7,160,000
Mr. Lupin shows the following transactions in the shares of Aklan Corporation, a closely
held corporation:
Date Transaction Quantity Price
2/8/2011 Purchase 10,000 P120,0
00
4/5/2011 Sale 10,000 100,00
0
5/1/2011 Purchase 20,000 240,00
0
518. What is the tax basis of the shares acquired on May 1, 2011?
a. P300,000 b. P260,000 c. P240,000 d.
P220,000
A Vat-registered trader has the following transactions:
Sales of good to private entities, net of 12% VAT P 2,500,000
Purchases of goods sold to private entities, gross of 12% VAT
896,000
Sales to government owned corporation (GOCC), net of 12% VAT
1,000,000
Purchases of goods sold to GOCC, net of 12% VAT
700,000
519. Which of the following is not an attribute of deferred-payment sale?
a The initial payment exceed 25% of the selling price in the tear of sale.
152 | T a x a t i o n
b The obligations or promissory notes received by the vendor from the vendee are
considered as equivalent to cash.
c The tax may be paid in installment.
d The sale involved both personal and real property.
A VAT-registered service contractor has the following data for the month of January
2015:
Cash received for buildings completed on January 2015
with a contract price of P5,000,000 P 3,800,000
Cash advances received for building to be construed on February, 2015 300,000
Cash received from VAT- registered supplier on
materials returned charged to the supplier 100,000
Cash received from owners of building for
materials charged with the services 1,000,000
Cash received from owners of building to be used to pay building
permit fees. 200,000
Cash received from VAT-registered sub-contractors for overpayments 300,000
520. How much is the output tax for the month?

521. One of the following taxes’ had been replaced by VAT except:
a. Advance sales tax
b. Common carrier’s tax on transport of passengers by land
c. Subsequent sales tax
d. ommon carrier’s tax in transport of goods and cargo by land.
522.. When will you submit the required sales summary list to the BIR ?
a. Attached with the monthly vat return
b. Submit only if sales exceeds P 2,500,000,00
c. Attached with the quarterly vat return
d. Submit even if sales do not exceed P 2,500,000,000.00
153 | T a x a t i o n
523. A acquired his residential land in 2000 at a cost of P1,000,000. He sold the property
on January 1, 2018 with a fair market value of P5,000,000 for a consideration of
P4,000,000. Within 18 months, he purchased his new principle residence at a cost of
P7,000,000.How much is the capital gains tax?
a. P300,000 b. P240,000 c. P75,000 d. P0
ABC, a 100 bed proprietary hospital organized in 2000, had the following data for 2016:
Gross receipts from patients and laboratory services P8.5M

Rental Income (net of 5% w/t) 1.425M Total
hospital expenses 8.2 M
524 The income tax still due for 2011 is:
a. P540,000 b. P105,000 c. P180,000 d. P465,000
525. Which of the following cases falls within the jurisdiction of the Court of Tax
Appeals?
a. Action for refund of real property tax.
b. Appeal from undisputed tax assessment.
c. Civil action for violation of the Tax Code as amended
d. Request for reconsideration filed with the BIR in a denied protest.
Scamander, a trading company, made the following transactions during the year
involving the stocks of Newt, a domestic corporation:
Date Transaction Shares Pri
ce
6/15/2011 Buy 10,000 P3
0
9/30/2011 Sell 8,000 28
10/3/2011 Buy 15,000 25
12/7/2011 Sell 10,000 32
154 | T a x a t i o n
526. Scamander uses the FIFO method in costing the Newt stocks. Compute the
deductible loss on the September 30 sale.
a. P20,000 b. P16,000 c. P12,800 d. P 0
527. XYZ Corporation filed its income tax return and paid the tax due for calendar
year 2016 showing a tax liability of P175, 000. However, upon audit, it was
discovered that its income tax return was false or fraudulent because it did not
report other taxable income. Per investigation the correct income tax due is P350,
000. The corporation was duly informed of this finding through a preliminary
assessment notice. Failing to protest on time against the preliminary assessment
notice, a formal letter of demand and assessment notice was issued on May 31,
2018 calling
for payment of the deficiency income tax on or before July 15, 2018. The amount
due on July 15, 2018 is
a. P306,250 b. P218,750 c. P341,250 d. P612,500
528. One of the properties left by a decedent was gutted by fire during the
settlement of the estate. The executor decided to claim the losses in computing
income tax of the estate. One of the heirs objected to the executor since even
before deducting the said losses, the taxable income of the estate is already zero.
However, the executor stood his ground and insisted on claiming the losses as
deduction in computing income tax. Which of the following statements is correct?
a The losses can no longer be deducted in computing the estate tax. b The
losses can still be claimed as deduction in computing the estate tax since
there is no prohibition against it under the tax laws, rules and regulation.
c The losses can still be claimed as deduction in computing the estate tax since
there was no tax benefit resulted in the deduction in the computation of income
tax.
d The losses cannot be claimed as deduction both in the computation of estate tax
and income tax since it occurred during the settlement of the estate.

with payment of taxes except one. Which one is it?
155 | T a x a t i o n
a Entering into compromise with the BIR b Filing a claim for tax refund or
application for a tax credit certificate.
c Filing a petition for reconsideration or reinvestigation over a disputed tax
assessment.
d Filing an appeal to the Court of Tax Appeals on the final decision by the BIR on a
disputed tax assessment or a denied claim for tax refund.
530. Effective July 2, 2011, John Hay Company changed is fiscal year ending every
March 31 to another fiscal year ending every August 31. An adjustment return shall
be filed covering the period
a. July 3 to August 31, 2011 c. April 1 to July 2,
2011
b. April 1 to August 31, 2011 . d. April 1 to July 1,
2011.
531. A filed his ITR for 2016 on April 15, 2017 and will pay his tax liability in
installment. The return shows an income tax due of P100, 000 and income tax
withheld of P60,000. If A pays the 2 nd installment only on October 15, 2017, the
amount to be paid (excluding compromise penalty is)
a. P26, 000 b. P35,000 c. P55, 000 d. P52,000
532. Who among the following transferors is not liable for estate tax on the property
transferred during his lifetime?
a. The testator who bequeaths property to his heirs in a last will and testament
executed and probated during his lifetime.
b. The donor who reserves his right to amend or revoke the donation of property
in favor of the done.
c. The done of an appointed property who is required under a power of
appointment to transfer such property upon death to his eldest child.
d. The transferor of personal property who sold it for insufficient consideration.
533. Spouses Chito and Angie wanted to donate a parcel of land to their son Popoy
who is getting married in January 2013.
156 | T a x a t i o n
The parcel of land has a zonal valuation of P420,000. What is the most efficient
mode of donating the property?
a. Spread the donation over a period of 5 years with the spouses donating
P100,000 each year from 2013 to 2016 and P20,000 in 2017.
b. The spouses should each donate a P100,000 portion of the value of the
property in 2013 then each should donate P100,000 in 2014
c. The spouses should first donate in 2013 a portion of the property valued at
P20,000 then spread the P400,000 equally for 2014, 2015, 2016 and 2017.
d. The spouses should each donate a P100,000 portion of the value of the
property in 2013, and another 100,000 each in 2019. Then in 2015, Angie
should donate the remaining P20,000
534. Mr. Tacurong submitted a sworn statement regarding the alleged tax evasion
practices of Chitie Corporation. This led the BIR to recover P20,000,000 unpaid taxes.
How much net tax informer’s reward shall be paid to Mr. Tacurong?
a. P1,800,000 b. P1,600,000 c. P1,000,000 d. P900,000
535. DEF College, A private educational institution organized in 2015 had the
following data in 2017.
Tuition Fees P 4.8 M

Rental Income (net of 5% w/t) 4.940 M
Total school expenses 9.45 M
The income tax will due for 2017 is

a. P165,000 b. (P95,000) c. (P60,000) d. P200,000
536. The following properties will be classified uniformly under Conjugal Partnership
of Gains and Absolute Community of Property, except:
a. Property inherited or received as donation during the marriage
b. Property acquired from labor, industry, work, or profession of spouses.
c. Fruits or income due or derived during the marriage coming from common
properties.
157 | T a x a t i o n
d. Fruits or income due or derived during the marriage coming from exclusive
properties.
537. Batman is a sole proprietor engaged in the distribution of various vanity

products. During the year he sold a parcel land valued at P2,500,000 to his long time
buddy, Robin, for only P1,500,000. The property was purchased by Batman two
years ago at a cost of P1,200,000. The correct taxes due are:
Donor’s tax Capital gains tax DST VAT
a. P0 P150,000 P37,500 P0
b. 360,000 90,000 22,000
1,440,000
c. 450,000 72,000 18,000
180,000
d. 750,000 0 0 300,000
538. Using the same date in number 45, only that Batman this time is a real estate
dealer and the parcel of land sold is held for sale in the ordinary course of trade or
business. The correct taxes due are:
Donor’s tax Capital gains tax DST VAT
a. P0 P150,000 P0 P0
b. 300,000 0 37,500
300,000
c. 360,000 90,000 220,000
144,000
d. 450,000 72,000 18,000
180,000
539. What is the rate of ta if the corporation is domestic and recipient stockholder is
another domestic corporation?
a. 30% c. 10%
b. 20% d. Exempt
158 | T a x a t i o n
540. Using the same information in the preceding number, except that the date the
BIR decision, denying theclaim for refund, was actually received on May 31, 2018.
The last day to appeal to the Court of Tax appeals is on.
a. April 2, 2018 c. June 30, 2018
b. June 10, 2018 d. July 10, 2018
541. Capital gains tax that are not payable on the installment basis is due a Within
30 days from the end of month of sale. b Within 30 days from the date of sale or
exchange.
c On or before the 15th day of the fourth month following the close of the quarter
when the sale was made
d On or before the 15th day of the fourth month following the taxpayer’s yearend.
542. A sold a personal property held as capital asset he acquired 9 years ago with an
acquisition cost of P150,000 for P270,000. The payment shall be made in the
following terms. Cash down payment of P40,000 and additional P10,000 at the end
of the year of sale. The property sold has been mortgaged for P160,000 which is
assumed by the buyer. The buyer issued a note payable for the balance which is to
be paid equally in two years following the year of sale. The contact price is
a. P270,000 b. P110,000 c. P120,000 d. P130,000

Russel, a resident alien, died on Nov. 2, 2018. He left the following properties, expenses
and obligations:
Community properties, Philippines (including

family home valued at P6M P12,000,000
Community properties abroad 4,000,000
Exclusive properties, Philippines 5,000,000
Actual funeral expense 300,000
Judicial expense 200,000
Medical expenses incurred within one year before
death 750,000
Devise to national government 500,000
159 | T a x a t i o n
Devise to local government 700,000
543. The net taxable estate shall be:

Lola Nidora 60 years old, resident citizen living in Quezon City
Lola Tinidora 59 years old, deaf, resident of Marikina City
Rogelio 65 years old with dual citizenship who lives in Quezon
City for the last six months during the year
Yaya Dub 24 years old, single, resident of Quezon City
a. P400,000 c. P3,200,000
b. P2,700,000 d. P3,400,000
544. The net taxable estate assuming the decedent is a nonresident alien shall be:
a. P8,900,000 c. P4,400,000
b. P9,500,000 d. P3,400,000
A group of four friends went out to dine. They are follows:
545. The total restaurant bill on the purchase of food and drinks, net of Vat, is P 10,000.
Who among the four qualify as senior citizens?
a. All of them c. Lola Tinidora and Rogelio only
b. All of them except Yaya Dub d. None of them
546. In case of taxable dividends, what is the rate of tax if the recipient stockholder is
non-resident alien engaged in business from a domesic corporation?
a. 30% c. 10%
b. 20% d. Exempt
547. Which statement is wrong? For internal revenue erroneously or illegally paid to the
BIR.
160 | T a x a t i o n
a The taxpayer may file a petition for refund to the BIR within two years from the
date of payment.
b The taxpayer may appeal to the Court of Tax Appeals only upon receipt of an
adverse decision from the BIR denying his claim for refund.
c The taxpayer must first file a claim for refund to the BIR and in a given situation
appeal to the Court of Tax Appeals to seek review of his petition for refund even
without awaiting the decision of the BIR
d The taxpayer may appeal the decision of the Court of Tax Appeals to the
Supreme Court within 15 days from receipt of the adverse decision of the Court
of Tax Appeals.
548. Chang Department Store conducted a sales promotion where customers purchases
exceeding P1,000 in one transaction shall be entitled to a ticket for a chance to win
P500,000. Mr. Shing won the prize. How much shall Chang withheld from the grand
prize winning?
a. P200,000 b. P100,000 c. P 50,000 d. P 0
549. Due to financial difficulties, ABC Corp requested that its 2016 income tax liability of
P400, 000 be paid in four (4) equal monthly installments, starting April 15, 2017. Its
request for installment payment was approved on April 8, 2017. The tax due on
May
15, 2017 is
a. P100, 000 b.P101,667 c. P105,000 d. P106,667

An individual taxpayer, married resident citizen, asked you to assist him in the
preparation of his tax return for his income in 2014. He provided you the following
information:
Cost of Sales, Philippines 500,000

Business Expenses, Japan 800,000
Interest income, Philippine peso bank deposit 20,000
Gross Sales, Japan 7,000,000
Interest income, US dollar deposit under EFCDS, Phil. 50,000
Yield on deposit substitute, Japan 100,000
161 | T a x a t i o n
Business Expenses, Philippines 200,000
Winnings, Japanese Sweepstakes 500,000
Interest on long-term deposit, certificate issued
by financial institution other than bank, Philippines 100,000
Gross Sales, Philippines 1,500,000
Gain from sale of shares of stock (listed and traded) but the
publicly-listed company is not compliant to the
mandatory minimum ownership, Philippines 150,0
00
Cost of Sales, Japan 2,000,0
00
Tax payments, first three quarters (if applicable) 1,000,0
00
550. How much was the taxable net income of the taxpayer who had six dependents
namely:
Jury, child, 25 years old, person with disability
Rich, child, 20 years old, got married during the year to Dennis Karl
Cha, niece, 21 years old, living with the taxpayer and dependent on him for chief
support
Aaron, senior citizen
Jaycob, child, born during the year
Diane, street child, naturally adopted by the taxpayer
551. The gross sales and/or receipts of someone who will be in the course of trade or
business are expected to be coming from the following sources in a 12-month period:
Day goods store P1,500,000
Sale of gold to the BSP 419,500
Passenger jeepneys for hire 500,000
Which of the following is correct?
162 | T a x a t i o n
a. The taxpayer is required to register for VAT because the basis for
compulsory registration is the total gross sales and /or receipts of
P2,419,500
b. The taxpayer may elect to register for VAT because the annual gross sales
and/or receipts as basis for optional registration amount to only P1,500,000
c. The taxpayer may elect to register for VAT because the annual gross sales
and/or receipts as basis for optional registration amount to only P1,919,500
d. The taxpayer is not required to register for VAT because the amount of
annual gross sales and/or receipts has no bearing in the optional or
compulsory registration as VAT taxpayer
Over But not over The tax shall be Plus 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
Not over P250,000 0%

Over P250,000 but not over P400,000 20% of the excess over P250,000
Over P400,000 but not over P800,000 P30,000 + 25% of the excess over
P400,000
Over P800,000 but not over P130,000 + 30% of the excess over
P2,000,000 P800,000
Over P2,000,000 but not over P490,000 + 32% of the excess over
P8,000,000 P2,000,000
Over 8,000,000 P2,410,000 + 35% of the excess over
P8,000,000
Mr& Mrs. Mapagbigay made the following donations:
163 | T a x a t i o n
February 14,2016: Donation of property to son and daughter-in-law on account of
marriage (same year), fair market value of P500,000 at date of donation, P550,000
at date of marriage, with P50,000 mortgage assumed by donees. March 15, 2016:
Donation to Daughter P800,000.
July 18, 2016: Donation to sister of Mrs. P300,000
August 23, 2016: Real property sold to 1 st cousin for P200,000, with fair market
value of P400,000.
552. How much is the donor’s tax due to Mr. on (date of first donation)?
a. P33,8000 c. P37,500
b. P33,750 d. P38,000
553. How much is the donor’s tax due of Mr. on (2 nd donation)?

a. P38,750 c. P14,750
b. P38,500 d. P14,500
554. How much is the donor’s tax due of Mr. on (3 rd donation)?

a. P90,000 c. P23,750
b. P45,000 d.P9,000
555. How much is the donor’s tax due of Mr. on (4 th donation)?

a. P20,750 c. P6,000
b. P14,750 d. P 0
556. Mr. Aegis Trangia, your client, asks you to file a tentative income tax return for his
behalf because he is going abroad. However, Mr. Trangia stay outside the
Philippines is indefinite, so Mr. Trangia asks you when is his last day to make
amendments to finalize his Income Tax Return?
a. 3 years from the date of filing.

b. 3 years from the date required by law.
c. Anytime until the BIR has not yet commenced its investigation over said return.
164 | T a x a t i o n
d. Before Mr. Trangia receives a Letter of Authority from the BIR and before its
prescription.
165 | T a x a t i o n
.
557 Agustos is a Greek company that manufacturer keratonin. Its Philippines exclusive
distributor is Loom Industries Philippine Incorporated . Agustos receives royalty income
from source within the Philippines . As a Certified public Accountant , which of the
following is correct regard to the applicable tax impose upon the royalty income?
a. Subject to final withholding tax of 10%

b. Subject to final withholding tax of 30%
c. Subject to final withholding tax of 20%
d. Subject to final withholding tax of 15%
558. On October 15, 2016, Rona Impectana invested P300,000 in Samson Corp. common
shares. The following year, on July 15, 2017, Samson Corp. common shares became
worthless. How much was the capital loss to be recognized by Rona Impectana?
a. P300,000 b. P150,000 c. P75,000 d. None of the above
Juan Dela Cruz, married to Susan, died leaving the following:
Car acquired before marriage by Pedro P300,000
Car acquired before marriage by Susan 450,000

House and lot acquired during marriage 1,500,000
Jewelries of Susan 100,000
Personal properties inherited by Pedro during marriage 250,000
Land inherited by Susan during marriage 1,000,000
Rental income on land inherited by Susan (25% of 200,000 which
was earned after Juan’s death) Benefits from SSS 350,000
Retirement benefits 480,000
Proceeds of group insurance taken by Juan’s employer 175,000
559. How much is the correct gross estate if the property relationship is conjugal
partnership of gains?
166 | T a x a t i o n
.
a. P1,950,000 c. P2,600,000
b. P2,200,000 d. P3,600,000
560 How much is the correct gross estate if the property relationship is absolute
community of property?
a. P1,950,000 c. P2,600,000
b. P2,200,000 d. P3,600,000
561. Statement 1. Excise tax is imposed on selected goods and articles of local
manufacturers or importers, regardless of whether only a casual importer or one in the
business of importation.
Statement 2. Where an importation is subject to excise tax, the importer shall pay
both the excise tax and the value-added tax (VAT) prior to the removal of the goods
from customs custody
a. Both statements are true
b. Both statements are false
c. Only statement 1 is true but not statement 2
d. Only statement 2 is true but not statement 1
562. Which statement/s is/are correct? On an assessment of an internal revenue tax

made by the BIR:
1. The taxpayer may protest the assessment within 30 days from receipt of
the assessment and demand for the tax.
2. The taxpayer may submit pertinent documents supporting his request
for reinvestigation within 60 days from filling the protest.
3. The taxpayer may appeal to the court of tax appeals within 30 days from
receipt of the final decision by the BIR denying his protest.
4.The taxpayer may appeal to the Supreme Court within 15 days from receipt of
the adverse decision of the Court of Tax Appeals.
a. All the statements are correct

b. All the statements are incorrect
c. Only two of the statements are correct
d. Only two of the statements are incorrect
167 | T a x a t i o n
.
563 Zeus a domestic Corporation has incurred Rent Expense amounting to P120,000.00
Zeus paid the lessor a total P 120,000.00 . Without withholding 5%tax there from . How
much rent expense can Zeus claim as an allowable deduction?
a. 120,000 b. 60,000 c. Zero d. None of the above
LBH Corporation sold capital goods on installment on October 1, 2014. It is agreed that
the selling price, including the VAT, shall be payable in five (5) equal monthly
installments. The data pertinent to the sold assets are as follows:
Selling price (exclusive of VAT) P5,000,000

Passed-on VAT
600,000
Original cost of the asset 3,000,000
Accumulated depreciation at the time of sale 1,000,0
00
Unutilized input tax on sold asset 100,0
00
564. How much is the gain on sale of asset?

a. P3,600,000 c, P2,600,000
b. P3,000,000 d. P2,000,000

a. P500,000 c. P300,000
b. P400,000 d. P200,000
566. How much is the creditable input tax of the buyer in this case?
a. P500,000 c. P10,000
b. P100,000 d. P8,333.333
Gross receipts, sale of airtime P

Payments received from user of radio station’s communications 2,000,00
168 | T a x a t i o n
.
0
Facilities for overseas communications 500,0
00
00
567. How much was the franchise tax due?
169 | T a x a t i o n
a. P75,000 b. P60,000 c. P50,000 d. P40,000
568. The following data pertain to a value-added taxpayer for December, 2017: The
value-added tax payable for December is:
Sales, total invoice price P1,344,000
Local, purchases from a VAT-registered supplier, tax not 360,000
included
Importation of goods for sale with landed cost of 300,000
a. 64,800
b. 85,080
c. 100,080
d. 118,080
569. Statement 1.The Commissioner of Customs (COC) and his subordinates are
automatic agents of the CIR as far as collecting national internal revenue taxes in
imported merchandise in concerned.
Statement 2. The CIR has the power to divide the entire Philippines into districts for
the purpose of an effective enforcement and administration of national internal revenue
taxes and each district created is under the supervision of a BIR Revenue District Officer
(RDO).

570. In 2014, Caruso a resident Filipino citizen , received dividend income from U.S -
Based corporation which owns a chain of Filipino restaurant in the West Coast ,
U.S.A. The dividend remitted to Caruso is subject to U.S withholding tax with
respect to a nonresident alien like Caruso . The dividend is subject to :
a. Final income tax c. Capital gains tax
b. Basic income tax d. Exempt from tax
170 | T a x a t i o n
571. Allowable deduction from gross estate of a decedent who died on or after January
1,2018:
a. Losses arising from calamities after settlement of the estate.
b. Medical expenses
c. Optical standard deductions
d. None of the above
During the month your client informed you that he is going to buy a vehicle for land
transport for official business use. He sought your advice so he can claim input tax. The
following are his choices:
Toyota Prado P 3,500,000

Volvo SUV 4,500,000
Mitsubishi Montero 1,500,000
572. What will you tell him to buy?

a. All of the above c. Any one of the above
b. Mitsubishi Montero only d. None of the above
573. A duly registered Cooperative with the CDA is requesting the BIR to exempt it from
the payment of the Vat on its purchases of prime commodities from VAT-
registered domestic suppliers for the reason that it is enjoying exemption from all
taxes under the Cooperative code of the Philippines.
Statement 1. The Cooperative is not subject to VAT because the tax is imposed by
law on the seller and not on the buyer.
Statement 2. The VAT components of any domestic purchase is not a tax on the
Cooperative but a part of its purchase cost, hence, there is no tax to complain
about.
c. Statement 1 is correct while statement 2 is incorrect
d. Statement 2 is correct while statement 1 is incorrect
171 | T a x a t i o n
574. Gerry was being prosecuted by the BIR for failure to pay his income tax liability for
Calendar Year 2013 despite several demands by the BIR in 2015. The information
was filed with the RTC only last June 2016. What are the remedies of Gerry?
a. Gerry should file a motion to quash the Information on the ground of

prescription
b. Gerry should answer the Information
c. Gerry should file a protest with the Commissioner of BIR d Gerry should appeal
to the CTA
575. Ayer domestic corporation hired Velayo, Gorres and Santos accounting firm to
conduct its annual audit for the year 2013. Ayer corporation paid VGS % Co., an
engagement fees equivalent to P 100 million. Such payment to VGS & Co. shall be:
a. Exempt from withholding tax b Subject to 1% withholding tax on its gross
payments c Subject to 2% withholding tax on its gross payments d
Subject to 5% withholding tax on its gross payment
576. Which of the following would prohibit the deductibility of vanishing deduction? a
The property is located in the Philippines b The period from preceding
decedent to the current decedent is within 5 years.
c Prior vanishing deduction has been deducted on the same property from the
preceding decedent.
d The estate or donors tax has been paid previously on the same property.
Sales returns and allowances P100,000
172 | T a x a t i o n
577. How much is the creditable input tax?
578. Who of the following is not considered in the course of trade or business and,
therefore, not subject to the business taxes?
a Isolated service in the Philippines by a non-residential foreign
person b Isolated sale of property for a gross selling price of P2,000,000
c Regular conduct of pursuit of a commercial or an economic activity by a
nonstock, non-profit private organization
d Regular conduct or pursuit of a commercial or an economic activity by a stock,
for profit private organization
579.A PAN should not be required in the following except:

a When the finding for any deficiency tax is the result of mathematical error in the
computation of tax appearing on the face of the tax return filed by the taxpayer
b When a discrepancy has been determined between the tax withheld and the
amount actually remitted by the withholding agent
c When an article locally purchased or imported by an exempt person, such as,
but not limited to, vehicles, capital equipment, machineries and spare parts, has
been sold, traded or transferred to non-exempt persons
d When there is an alleged fraud or non-filing of return when more than 30% was
unduly over declare or under declare
580. Effective January 15, 2011, Carlos, Inc. changed its fiscal year ending every April 30
to the calendar year. An adjustment return shall be filed covering the period a
January 15 to December 31, 2011.
b January 1 to April 30, 2011. c
May 1 to December 31,
2011 d April 30 to December 31,
2011.
173 | T a x a t i o n
581. Assume that Airah bought shares of stock in 1970 at a cost of P100,000. She
donated these shares to Gemma on January 1, 1998, during which time, the said
shares has a fair market value of P1,000,000 and on the basis of such fair market
value, Airah paid the corresponding donor’s tax. Gemma, the done, sold the shares
on January 1, 1999 for a consideration of P2,000,000.
How much is the capital gain (loss) from sale of shares of stock?
a. P1,900,000 b. P1,000,000 c. P950,000 d. P500,000
582. Marlon, married on June 5, 2016 died on April 29, 2018 with the following data:
Gross estate-conjugal, P3, 000,000; exclusive, P2, 000,000. Said amount includes a land,
which he received as wedding gift from his father, valued at P540, 000. His father
mortgaged the land for P20, 000 which was paid by Marlon before his death. He
mortgage again the land for P50, 000 after marriage but was able to pay only P20,000
until his death. Losses and indebtedness claimed (excluding the unpaid mortgage)
amounted to P170,000.
The vanishing deduction should be-
a P399,360 c P299,520 b P384,000 d

P288,000
deceased bought and used on the occasion of the burial 20,000 Expenses
for the deceased’s wake, including food and drinks 30,000
Medical expenses of the last illness 15,000 Card
of thanks published on December 26,2014 5,000
174 | T a x a t i o n
How much were the deductible funeral expenses?
a P100,000 b P80,000 c P50,000 d None of the choices
584. Statement 1. Every taxpayer not subject to VAT but subject to the excise tax or OPT
shall register with the BIR as a non-VAT taxpayer and pay an annual registration
fee of P500 for every separate and distinct establishment where the business is
conducted.
Statement 2. Every taxpayer subjected to the VAT shall register with the BIR as a VAT
taxpayer and pay an annual registration fee of P1,000 for every separate and distinct
establishment where the business is conducted.
a Both statements are correct b Both statements are incorrect c Statement
1 is correct while statement 2 is incorrect d Statement 2 is correct while
statement 1 is incorrect
585. BacolorYambing received a FAN requiring him to pay deficiency tax within 30 days
period. However, Yambing filed a request for reinvestigation. What must he do?
a Submit all relevant supporting documents within 60 days. b Wait for the
commissioner’s decision within 180 days. c File a protest with the CTA d Appeal
the FAN to the BIR Commissioner.
586. Concerned with increasing unemployment rates in the country, the President of
the Philippine encouraged the Philippine senate to pass a law granting special tax
privileges to foreign investors who will establish businesses in the country. The
senate accordingly drafted the bill and passed to congress for approval. Is this valid
exercise of taxation power?
a Yes. It is the discretion of the President to adopt any measures he deemed
necessary to alleviate the condition of the country.
b Yes. Any means beneficial to the public interest should be given optimum
priority.
c Yes. The President’s proposal will have to be finally approved and passed by the
legislature. The rule on non-delegation of taxation would not be violated.
175 | T a x a t i o n
d No. Tax bills shall originate from the house of representative.
587. In 2010, Juliet Ulbod earned P500,000.00 as income from her beauty parlor and
received P250,000.00 as Christmas gift from her spinster aunt. She had no other
receipts for the year. She spent P150,000.00 for the operation of her beauty
parlor. For tax purposes, her gross income for 2010 is
a P750,000 b. P500,000 c. P350,000 d. P600,000
588. The law provides for an extension of payment of estate tax. The period of
extension shall not exceed:
a 5 years in case of judicial statement, and 2 years in case of extrajudicial
settlement
b 2 years in case of judicial settlement, and 5 years in case of extrajudicial
settlement
c 2 years in case of judicial settlement and 3 years in case of extrajudicial
settlement
d 3 years in case of judicial settlement and 2 years in case of extrajudicial
settlement
An international air carrier having or maintaining flight operations to and from the
Gross receipts, sales of passage documents for cargo originating 00
Gross receipts, sales of tickets to passenger originating 00
00
589. You were asked to compute the tax due to the Philippine Government. How much
is the Philippine VAT due using 12% tax rate? a P540,000 b P240,000
c P180,000 d None of the choices
590. Consider the following:

Bed spaces at a monthly rental ranging from P10,000 to P12,800 per bed space.
176 | T a x a t i o n
Sale of “inihawnabangus” at Dagupena’s restaurant.
Sale of fresh meat, fruit, fish and vegetables in the public market .
Sale of an inherited parcel of land to defray burial expenses of somebody who died in
the family.
Statement 1. All of the above are subject to VAT
Statement 2. None of the above is subject to VAT a Both
statements are correct b Both statements are incorrect
c Statement 1 is correct while statement 2 is
incorrect d Statement 2 is correct while statement 1 is
incorrect
591. Under TRAIN, what is the rate of penalty imposed by the BIR a 20% surcharge
b ½ the rate of loan or forbearance of any money, good or credits and in
c Twice the rate of loan or forbearance of any money, good or credits and in
d 40% penalty
592. In order to phase-out a huge deficit, the President of the Philippines passed a
decree requiring all offering all taxpayers with previous tax delinquency to pay a
minimum tax in exchange of relief from tax assessment in the period of
delinquency. Is this a valid exercise of taxation power?
a Yes, because the measure adopted is of necessity.
b Yes, because the President is merely exercising its presidential discretion. c
No, because the power of taxation is non-delegated.
d No, because only the Department of Finance can issue such ruling.
Ayala Land Corporation, a VAT registered realtor, sold a parcel of land to Dakila on
October 1, 2015 for P2,000,000, plus the output VAT with a down payment of P200,000,
VAT not included and 36 equal monthly installment payments of P50,000 plus the
output VAT. First installment is due on month-end. The zonal value of the subject
property at the time of sale amounted to P3,000,000.
593. The output VAT in the month of sale is:
177 | T a x a t i o n
a.P30,000 b. P45,000 c. P240,000 d. P360,000
594. The output VAT for the quarter is

a.P42,000 b. P63,000 c. P240,000 d. P360,000
595. Assuming that the downpayment is P350,000, VAT exclusive, and 12 equal monthly
installment payment on the balance every month-end, starting 31, 2015, the
output VAT in the month of sale is:
a. P58,500 b. P87,750 c. P240,000 d. P360,000
596. Which of the following is deemed a taxable gift?

a Condonation or remission of a debt. b Sale of residential house and lot for less
than adequate and full consideration in money or money’s worth. c Both “a”
and “b” d Neither “a” and “b”
VAT payments for January and February P 100,000
Gross receipts from practice of profession, net of 10% withholding tax 1,710,000
Expenses in connection with the practice of profession (80% VAT-subject) 100,000 597.
How much is the taxable net income using OSD?
598. Statement 1. A taxpayer who is in trade or business shall have his/her/its invoices
or receipts registered with the BIR. If the taxpayer is a VAT or non- VAT taxpayer, suck
invoices or receipts shall clearly show that he/she it is a VAT or non-VAT taxpayer.
Statement 2. The registration of any person as a VAT or non-VAT taxpayer maybe
cancelled if that person has ceased to carry an his/her/its trade or business and does
178 | T a x a t i o n
not expect to recommence any trade or business within the next 12 months a
Both statements are correct b Both statements are incorrect c Statement 1 is
correct while statement 2 is incorrect d Statement 2 is correct while statement 1 is
correct
599.Ronald Aquino was assessed on January 10, 2009. Ronald did not protest. The
assessment become final and executory. BIR issued a warrant of distraint on December
2014. What should the taxpayer do? a Raise defense of prescription b File a
Protest for Reinvestigation
c Pray for temporary restraining order with CTA
d File criminal complaint with the Office of the Ombudsman
600. What is the prescriptive period for an assessment fraud?

a. 5 years discovery
b. 10 years from discovery
c. 5 years from the return of deadline prescribe by law whichever is later;
d. 10 years from the date of deadline prescribe by law whichever is later;
601. Mr. Bill Morgan, a Canadian citizen but resident of El Nido, Palawan, donated
in 2018 his car in Canada to his future daughter in-law who is to be married to his
only son in Canada. His son an d future daughter-in-law are both citizens and
residents of Canada.
What is the tax implication of the above donation?
a The donation is not subject to donor’s tax since the donee is a non-resident
alien and the donated property is located in Canada.
b The donation is taxable at 6%, however, dowry exemption may be claimed as
deduction. c The donation is taxable at 6% in excess of P250, 000
without any deduction for dowry.
d The donation is subject to graduated rates.
602. A stockholder of a closely held corporation owns 100,000 shares before the
IPO. The par value of the share is P1,000,000. During the IPO, the shares are selling at
P12 per share. His broker-friend advises him not to sell his shares during the IPO but
instead wait until after the IPO. After the IPO, the outstanding shares of the closely held
corporation are 1,000,000 shares and are now selling at P14 per share at the local stock
179 | T a x a t i o n
exchange. The stockholder of the closely held corporation approaches you to seek your
advice because he is also planning to sell the shares directly to his friend and, therefore,
not traded through the local stock exchange at P15 per shares. How much is the capital
gains tax if he sells the shares directly to his friend?
603. The following are data, VAT exclusive, of Magic Appliance Center for the last
quarter of 2017:
Sales up to December 15 P300,000
Purchases up to December 15 200,000
Importation of appliances for sale, with dutiable
value plus customs duties and other legitimate
charges while within the custom custody 150,000
Additional information:
On December 16, 2017, Magic Appliance Center Retired from its business and the
inventory (all from VAT-registered suppliers) valued at P190,000 was taken and
transferred to New Era Appliance Center. There is a deferred input taxes from the third
quarter of P2,500.
How much is the VAT payable by Magic Appliance Center in its last quarter operations
and its retirement from business?
a 12,000 b
12,300 c
10,500 d
114,300
Anthony Cabe, single, an American but resident of Friendship Road, Angeles, Pampanga,
died in year 2018 left the following properties:
Gross estate in Philippines

Family Home P7,000,00
0
Agricultural land inherited
8,000,000
Cash and investment 15,000,00
180 | T a x a t i o n
0
Gross estate Foreign Country
Dodge Calibre P12,000,0
00
Tiny House 8,000,0
00
Funeral Expenses P
200,000
Administrative Expenses 2,000,00
0
Claims against the estate 5,000,00
0
Unpaid mortgage 2,000,00
0
604. How much is the gross estate?

a P50,000,000 b P30,000,000 c P20,000,000 d P 0
605. How much is the total ordinary deductions?

a P5,000,000 b P7,000,000 c P9,000,000 d P9,200,000
606. How much in the special deduction?
a P12,000,000
b P15,000,000 c P7,500,000 d P7,000,000
607. How much is the estate tax due?

a P1,680,000 b P1,860,000 c P2,160,000 d P2,610,000
608. Hagrid ,63 years old grandmother , was treated by her grandchildren Conrado ,
Crispin and Pedro to Max's restaurant during grandparents day and their total bills
P 2,240.00 How much is the VAT ?
a. P 240.00 b. P 160.00 c. P 100.00 d. P 400.00
609. Mr. Hinada, a Japanese citizen residing in Osaka, sold his shares of stock in UCC
181 | T a x a t i o n
Corp. to Ms. Japlos, a Filipina, for P700,000 at the time when its fair market value was
P1,000,000. It was agreed between the parties that as long as the seller lives, he shall be
entitled to the dividends. After two years from the date of sale, Mr. Hinada died. The
fair market value of the shares at that time is already P1, 500,000. Other than Japan
(Head Office), UCC Corp. also operates in Singapore, Korea, France, United Kingdom and
USA.
Based on the above data, which of the following statements is correct?
a The sum of P300, 000 shall be subject to donor’s tax.
b The estate of Mr. Hinada will include P800, 000 in the computation of gross
estate.
c The above transaction may be subject to donor’s tax or estate tax upon the
election of Mr. Hinada or the executor or administrator of his estate.
d The above transaction is neither subject to donor’s tax nor estate tax.
A domestic common carrier by air has the following data for the month:
Gross receipts from transport of passengers from Manila to Cebu P2,000,000
Gross receipts from transport of passengers from Manila to Hongkong 2,500,000
Gross receipts from transport of passengers from Manila to Cebu 1,500,000
610. How much is the VAT for the month?

a. P600,000 b. P480,000 c. P300,000 d. None
611. A VAT-registered taxpayer had the following sales (tax inclusive) in the month:
Cash sales P224,000
Open account sales 392,000 Installment
sales 168,000
Consignment sales:
0-30 days old (consignee remittance, P112,000) 560,000
31-60 days old 784,000 61
days old and above 896,000
How much is the value-added tax on the sales for the month?
a 180,000 b
192,000 c
201,600 d
215,040
182 | T a x a t i o n
The following events happen in a vat enterprise :
June Performance of services
July Received invoice in the amount of P 112,000
August Paid the services
612. When and how much input vat will be claimed ?

a July P 12,00
b July P 13,440 c
August P
12,000
d August P 13,440
The next four (4) questions are based on the following data:
Mr. and Mrs. Pinagpala donated the following:
March 30
• Land valued at P620, 000 to Ana, legitimate daughter, on account of
marriage.
• Cash of P100,000 to Juan, legitimate son, for successfully passing the
CPA Licensure exam.
• Second hand car (capital property) valued at P400,000 to Mr.
Pinagpala’s long-time friend, Pedro.
May 15
• Cash of P200,000 to Melda, mother of Mrs. Pinagpala
• Jewelry (Paraphernal property) worth P100,000 to Emma; Mrs.
Pinagpala’s best friend
December 25
• Cash of P250, 000 to Quezon City government for public use.
183 | T a x a t i o n
613. Assume taxable year was 2017. The donor’s tax due on March 30 donation should
be:
a P0 for Mr. & Mrs. b
P8,000 each for Mr. & Mrs. c
P68,000 each for Mr. &
Mrs.
d P128,000 for Mr.; P8,000 for Mrs.
614. Assume taxable year was 2018. The donor’s tax due March 30 donation should be:
a P0 for Mr. & Mrs. b P18,600
each for Mr. & Mrs. c P30,600 for
Mr.; P6,600 for Mrs.
d P30,000 for Mr.: P6,000 for Mrs.
615. Assume taxable year was 2017. The donor’s tax due on the December 25 donation
should be:
a P0 for Mr. & Mrs.
b P8,000 each for Mr. & Mrs. c P68,000 each for
Mr. & Mrs.
d P128,000 for Mr.; P8,000 for Mrs.
616. Assume the taxable year was 2018. The donor’s tax due on the December 25
donation should be:
a P0 for Mr. & Mrs. b P6,000
for Mr.; P12,000 for Mrs. c
P36,000 for Mr.; P18,600 for
Mrs.
d P40,000 for Mr. and Mrs.
617. A VAT-registered practicing lawyer received P291,000 from a retainer

mediumsized establishment client for service rendered. The lawyer’s expected
annual gross income has consistently been more than P720,000 (for creditable
withholding tax purpose). The output tax included in the Official Receipt issued is:
a 31,179 b 34,235 c 34,940 d 36,000
184 | T a x a t i o n
618. A vat enterprise had a vat transaction , however , it only has a vat invoice . As the
accountant of the enterprise what will you advice ?
a Stamp "vat-exempt" on the duplicate vat invoice
b Charge and collect output vat from client
c Charge output and refund to client

d Error in transaction does not pay output
619. Eleanor, resident citizen, married and under the absolute community of property
regime, died on August 20, 2014: the following are the data on properties and
obligations:
Exclusive properties of Eleanor:

Personal properties P 2,500,000
Family home 2,000,000
Community properties:
Real properties 1,400,000
Personal properties 1,750,000
Judicial expenses incurred until February 20, 2015 30,000
Judicial expenses incurred after February 20, 2015 20,000
Unpaid taxes 12,500
Casualty loss occurred November 2, 2014 350,000
Casualty loss occurred March 5, 2015 130,000
How much is the net taxable estate?

a. P 3,268,500 b. P3,278,750 c. P3,238,000 d. P3,228,000
620. The net distributable estate is –

a. P 3,278,750 b. P3,483,750 c. P5,483,750 d. P5,418,750
185 | T a x a t i o n
Rent of 50 residential units at P20,000 per unit 1,000,000 Rent of
200 residential units at P10,000 per unit 2,000,000 621. How much
is the output tax?
622. Statement 1. Sales of certain goods and services to senior citizens are zero-
rated VAT sales, hence, the value-added tax on the transaction is zero.
Statement 2. Sales of certain goods and services to senior citizens are exempt from
value-added tax, hence, the value-added tax on the transaction is zero.
a Both statements are wrong b Both statements
are correct c Statement 1 is correct while statement 2
is wrong d Statement 2 is correct while statement 1 is
wrong
623. Which of the following statements is most correct in case of involuntary

termination?
a The benefits are taxable
b The benefits are exempt from fringe benefits
tax
c The benefits are exclusion from gross
income d The benefits are party taxable and partly
exempt

Rogelio 65 years old with dual citizenship who lives in Quezon City for the
last six months during the year
186 | T a x a t i o n
624. The total restaurant bill on the purchase of food and drinks, net of Vat, is P 10,000.
How much is the total amount to be paid by the four customers excluding 10%
service charge and local tax?
625. The following are the various VAT methods and system application. Which one is a
contradiction?
a Tax credit method b Cost deduction method c Mixture of tax credit and
cost deduction methods d Neither tax credit method nor cost deduction
method
DhannelMasangkay married in year 2014, but died in year 2016 because of an awful
marriage left the following properties:
• Real Property in USA inherited from his father during marriage P3,500,000. 
Real Property donated to wife prior to marriage, with P500,000 Market Value at
date of donation, P700,000 MV at date of death.
• Family Home worth P3,600,000 but with mortgage P1,000,000
• Jewelry P400,000
• Funeral Expenses: P300,000
• Medical Expenses: P500,000
626. How much is the total conjugal properties?

a P4,500,000 b P4,700,000 c P3,500,000 d P8,200,000
627. Ordinary deductions a P200,000 b P1,200,000 c P1,700,000 d
P1,800,000
628. Special deductions a P4,000,000

b P4,250,000 c
P4,350,000 d
P4,500,000
629. Estate Tax

a P355,000 b P217,500 c P206,500 d P190,000
187 | T a x a t i o n
Nymphadora, a Resident Corporation provided you the following information for the
year 2015
Sales net of withholding tax in the Philippine P 4,455,000
Sales without the Philippine 5,500,000
Direct Cost 3,800,000 Dividend
paid to stockholder 650,000
630. Determine the Taxable Income:
a. 6,200,000 b. 6,700,000 c. 4,500,000 d. 2,790,000
Mr. and Mrs. Bungo opened and joint saving account under “and/or” signatories. When
Mr. Bungo died, the BIR included the joint deposit as part of the estate. The lawyer of
Mrs. Bungo objected on the ground that the deposit account is not jointly owned by the
spouses and that, in fact, the bank allowed the withdrawal by Mrs. Bungo of the deposit
even after the knowledge of Mr. Bungo’s death.
631. Will the argument of Mrs. Bungo and her lawyer prosper?
a No, under the estate tax law, the bank deposits by the spouses are jointly
owned irregardless of whether their property is under the system of absolute
community or the conjugal partnership or gains.
b Yes, because the conjunction “and/or” used as basis of the required signatories
to operate the bank account may be taken separately or together, hence the
bank deposit of the spouses is not jointly owned. The burden of proof that the
deposit is jointly owned by Mr. and Mrs. Bungo rests with the BIR.
c No, because the conjunction “and/or” used as basis of the required signatories
to operate the bank account may be taken separately or together, hence, the
bank deposit of the spouses should be considered as jointly owned by them.
The burden is on Mrs. Bungo and her lawyer to prove that the deposit is not
jointly owned.
d Yes, the mere approval by the bank of Mrs. Bungo’s withdrawal of the deposit in
knowledge of Mr. Bungo’s death is a clear evidence that the deposit account is
not jointly owned by the spouses.
188 | T a x a t i o n
632. Did the bank act correctly in allowing the withdrawal of the deposit?
a Yes, because the joint saving account deposits of the spouses is under the
“and/or” signatories scheme.
b No, because if a bank has a knowledge of the death of the person who
maintained a bank deposit account alone or jointly with another, is shall not
allow any withdrawal from the said deposit account except if there is a
certification from the BIR that the estate taxes have been paid.
c Yes, because under existing law and co-depositor of a deceased person is
allowed to withdraw in an amount not exceeding P20,000 from their joint bank
account even without a written authorization from the BIR.
d No, because if one of the depositors in a joint bank account is dead, the dual
signatories on withdrawals is no longer tenable, hence, the bank shall not allow
withdrawal of deposits under the signature alone.
633. The manager of Agnes Company receives transportation and representation

allowances on a regular monthly basis. He asks you if there is a way to exclude
them from his taxable compensation income. What will you tell him?
a There is no way for such allowances to be excluded from his taxable
compensation income.
b He has to liquidate or account for such allowances at the end of each month. c
He has to include the allowances in the miscellaneous expenses.
d He has to include the allowances in the fringe benefits expenses.
634. Which one of the following is not among the characteristics or nature of VAT?
a An indirect tax b A percentage tax c A tax on property
d A tax on consumption
635. Your client is Mr. Irving Ackerman, consulted you on how he can transfer all his
properties to his lone son with a minimum tax consequence. What will advise Mr.
Irving Ackerman?
a Sell all his properties in favor of his son b Incorporate and give all
stockholding to his son
c Liquidate ,convert all his properties into cash Get a life insurance , the
proceeds d there from will cover the tax consequence
189 | T a x a t i o n
636. Local taxes may be assessed within years from date they became due.
a. 2 years c. 5 years
b. 3 years d. 10 years
637. Taxpayer is a VAT-registered processor of fruits and canned sardines. Selling prices,
VAT exclusive:
Processed fruits P400,000
Processed sardines 600,000
Purchase costs, VAT exclusive:
Fruits Fish
Fruits, purchased from farmers P60,000
Sardines (fresh “tamban”) purchased from fishermen 40,0
00
Tomatoes purchased from farmers 16,0
00
Olive oil purchased from processor of olive oil 12,0
00
Raw cane sugar purchased from millers 24,000
Bottles 8,000
Tin can containers 14,000 30,0
00
Paper labels 10,000 14,0
00
Cardboard for boxes 16,000 18,0
00
Howling services of 9,000 20,0
forwarders The value- 00
added tax payable is: a
85,080 b 96,280 c
99,800 d 101,240
190 | T a x a t i o n
638. A group of four friends went out to dine. They are follows:
Nagini 60 years old, resident citizen living in Quezon City
Peeves 59 years old, deaf, resident of Marikina City
James 65 years old with dual citizenship who lives in Quezon
Fleur 24 years old, single, resident of Quezon City
The total restaurant bill on the purchase of food and drinks, net of Vat, is P 10,000.
How much is the total deductions that may be claimed by the restaurant on account
of discount given to the four customers?
a. P1,400 b. P1,500 c. P2,000 d. None of choices
639. FIRST STATEMENT: The estate tax return should be filed with the authorized agent
bank, Revenue district officer, collection agent or duly authorized treasurer of the
municipality in which the decedent was domiciled at the time of his death.
SECOND STATEMENT: If the decedent was a non-resident, not a citizen of the
Philippines, the estate tax return may be filed with the
commissioner of internal revenue.
b Both statement is false
c First statement is the true while second statement is false.
d First statement is false while the second statement is true.
640. The taxpayer has days from receipt of notice of assessment to file a written
protest with the local treasurer.
a 15 days c. 60 days
b 30 days d. 180 days
Rent of 50 residential units at P20,000 per unit 1,000,000 Rent of
200 residential units at P10,000 per unit 2,000,000
191 | T a x a t i o n
641. To be exempt from VAT, the threshold amount for the sale of residential lot is:
642. Taxpayer is a VAT-registered taxpayer.

Data for the month of January 2017 (VAT not included) follow:
Sales of goods P1,500,000
Sales of property:
No. 1, purchased from non-VAT taxpayer 100,000
No. 2, purchased from VAT taxpayer 200,000
Purchases of goods from VAT suppliers 400,000
Purchases of property from VAT suppliers:
No. 3, with useful life of 6 years 900,000
No. 4, with useful life of 8 years 2,000,000
No. 5, with useful life of 3 years 1,500,000
The value-added tax payable for the month is:
a 145,200 b
147,000 c
147,200 d
157,200
An individual taxpayer, married resident citizen, asked you to assist him in the
preparation of his tax return for his income in 2014. He provided you the following
information:
Cost of Sales, Philippines 500,000
Business Expenses, Japan 800,000
Interest income, Philippine peso bank deposit 20,000
Gross Sales, Japan 7,000,000
Interest income, US dollar deposit under EFCDS, Phil. 50,000
Yield on deposit substitute, Japan 100,000
Business Expenses, Philippines 200,000
Winnings, Japanese Sweepstakes 500,000
Interest on long-term deposit, certificate issued by financial institution other than bank,
Philippines 100,000
Gross Sales, Philippines 1,500,000
192 | T a x a t i o n
Gain from sale of shares of stock (listed and traded) but the publicly-listed company is
not compliant to
the mandatory minimum ownership, Philippines 150,000
Cost of Sales, Japan 2,000,0
00
Tax payments, first three quarters (if applicable) 1,000,0
00
643.How much was the total final withholding taxes on certain passive income?

a When a compulsory heir is given by will less than his legitime, the provision of
the will should be modified in such a way that he will receive his legitime
b The CIR may examine the bank deposit of a decendant for the purpose of
determining his gross estate even if the estate did not request for a compromise
on the ground of financial capacity
c The P500,000 standard deduction for medical expenses for estate tax purposes
is a legal mechanism to further exempt the less privileged estate and heirs from
tax burden
d The sharing of heirs in testamentary succession must satisfy the rules on
legitime
645. Josef received a final assessment notice (FAN) from the BIR on October 30, 2018.
Josef submitted his protest and the supporting documents within the time
prescribed by the law. After 180 days, the subsequent step/s available to Josef
shall be:
I. Elevate the case on appeal to the CTA, alleging inaction of the CIR,
within 30 days from the 180th day since he submitted the supporting
documents on his protest.
II. Wait for the decision of the Commissioner of Internal Revenue (CIR)
and if adverse, appeal the case before the CTA within thirty days.
a. I only c. Either I or II
b. II only d. Neither I nor II
193 | T a x a t i o n
646. How much is the Vat on the sale of food and drinks?
a. P500 b. P1,200 c. P1,400 d. None of the choices
647. Analysis of the balances in selected accounts of a taxpayer, with VAT and non-VAT
business is shown below. There were no inventories at the beginning and end of
the taxable period. All amounts shown are VAT exclusive.
Purchases, all from VAT suppliers P1,600,000
Export sales, VAT business 1,000,000
Export sales, non-VAT business 600,000
Domestic sales, VAT business 2,000,000
Domestic sales, non-VAT business 400,000
The net value-added tax payable (refundable) for the taxable period is:
a. (48,000)
b. 48,000
c. (96,000)
d. 96,000
ESTATE TAX RATES

Over But not over Tax shall be Plus Of the Excess
over
P200,000 Exempt
P200,000 500,000 0 5% P200,000
500,000 2,000,000 P15,000 8% 500,000
2,000,000 5,000,000 135,000 11% 2,000,000
194 | T a x a t i o n
5,000,000 10,000,000 465,000 15% 5,000,000
10,000,000 1,215,000 20% 10,000,000
DONOR TAX RATES

Net Gift Over But not over Tax shall be Plus Of the Excess
over
P100,000 Exempt
P100,000 200,000 0 2% P100,000
200,000 500,000 P2,000 4% 200,000
500,000 1,000,000 14,000 6% 500,000
1,000,000 3,000,000 44,000 8% 1,000,000
3,000,000 5,000,000 204,000 10% 3,000,000
5,000,000 10,000,000 404,000 12% 5,000,000
10,000,000 and over 1,004,000 15% 10,000,000
Donation made to a stranger is subject to 30% of the net gift.
648. Quezon City imposes real property tax within its territorial jurisdiction over lands,
buildings and other improvements in accordance to Local Government Code shall:
a Not exceed 1% of assessed value within its territorial jurisdiction where the
property is situated
b Not exceed 1% of zonal value within its territorial jurisdiction where the owner
resides
c Not exceed 1% of fair market value within its territorial jurisdiction where the
property and its owner may be found
d Not exceed 2% of assessed value within its territorial jurisdiction where the
property is situated
649. Statement 1. Real estate tax is a local government tax imposed by LGUs, namely:
Cities , provinces, municipalities and barangays.
Statement 2. All internal revenue taxes are imposed and collected by the BIR.
195 | T a x a t i o n
a Both statement are true b Both statement are false c Statement 1 is false
but statement 2 is true d Statement 2 is true but statement 1 is false

Purchases of goods sold to private entities, gross of 12% VAT 896,000
Sales to government owned corporation (GOCC), net of 12% VAT 1,000,000
Purchases of goods sold to GOCC, net of 12% VAT 700,000
650. How much is the withholding VAT?
651. Statement 1: The distinction between the VAT-exempt transactions and the
VATexempt entity is that the former shall not be the subject of any billing for
output VAT and shall not be allowed any input tax credits while the latter being
zero –rated is allowed to claim input tax credit
Statement 2: In the case of tax-free importation of goods into the Philippines by
taxexempt persons where such goods are subsequently sold in the Philippines to
nonexempt persons, the latter shall be liable for the VAT on such importation a
Both statements are correct. b Both statements are
incorrect. c Only statement 1 is correct but not statement 2.
d Only statement 2 is correct but not statement 1.
652. On March 30, 2016 Emmett Foods, Inc. received a notice of assessment and a letter
of demand on its April 15, 2012 final adjustment return from the BIR. Emmett
Foods then filed a request for reinvestigation together with the requisite
supporting documents on April 25, 2015. On June 2, 2015, the BIR issued a final
assessment reducing the amount of the tax demanded. Emmett Foods was satisfied
with the reduction, it did not do anything anymore. On April 15, 2020 the BIR
garnished the corporation’s bank deposits to answer for the tax liability. Was the
BIR action proper (2012 Bar Question).
a Yes. The BIR has 5 years from the filing of the protest within which to collect.
b Yes. The BIR has 5 years from the issuance of the final assessment within which
to collect.
196 | T a x a t i o n
c No. the taxpayer did not apply for a compromise. d No. without the taxpayer’s
prior authority, the BIR action violated the Bank Deposit Secrecy law.

653. What is the treatment of the excess actual input VAT attributable to sales to GOCC?
a. Input tax credit b. Expense or cost c. Income d. None of
the choices
654. Sales in any preceding year never exceed P1,919,500. Data in January, 2017, follow:
Sales, any tax not included P240,000
Purchases from VAT suppliers, VAT inclusive 44,800
Inventory, all purchased from VAT suppliers:
January 1, VAT inclusive 67,200
January 1, VAT exclusive 20,000
The taxpayer opted to be a VAT taxpayer beginning January of 2017.
The value-added tax payable for January of 2017 is:
a. 16,224
b. 16,800
c. 22,080
d. 22,656
655. In the preceding question, such Real Property will be tax based on a Owner’s
Tax Declaration b Fair market values c Zonal Values
d Fair market values multiply by assessed level
656. Statement 1. Unpaid internal revenue taxes can be collected immediately by the
Bureau of Internal Revenue(BIR) by summary proceedings of Distraint and/or levy
property belonging to the taxpayer.
197 | T a x a t i o n
Statement 2. The Commissioner of Internal Revenue (CIR) is authorized (under the
tax code, as amended) to look into the bank deposit of a decedent to determine gross
estate or to establish the true financial worth of a taxpayer who applied for compromise
of his tax liability by reason of financial incapacity to pay.
a. Both statement are correct b Both statement are wrong c statement 1

is correct but statement 2 is wrong d Statement 2 is correct but
statement 1 is wrong
Vanderwoodsen is a radio-TV broadcasting franchise grantee. The previous year, its

gross receipts did not exceed P 10,000,000. In the first month of the current year, it had
the following data:
Gross receipts, sale of airtime P 2,000,000

Payments received from user of radio station’s communications facilities for overseas
communications 500,000
657. How much was the overseas communications tax?

a. P250,000 b. P200,000 c. P75,000 d. P50,000
658. ABC, an international air carrier imported aviation fuel at a total landed cost Php
500M. thereafter, it sold Php 100M of the importation to DEF, a domestic air
carrier.
Which of the following is correct?
a. ABC is subject to VAT on its sale to DEF b DEF is considered as an
importer of the fuel purchased from ABC c The importation and sale
made by ABC is exempt from VAT d The importation and sale made by
ABC will be subject to VAT

A company has been assessed of deficiency income tax of P1,000,000, exclusive of
interest and surcharge for 2018 taxable year. The tax liability has remained unpaid
despite the lapse of June 30, 2020, the deadline for the payment stated in the notice
198 | T a x a t i o n
and demand issued by the Commissioner. Payment was made by the taxpayer on Feb.
10, 2021.
659. The correct amount of deficiency interest and delinquency interest shall be:
DeficiencyDelinquency
a P103,215.09 P145,315.07 b P145,315.07
P103,215.09 c 103,215.09.06 103,215.09 d 103,215.09
145,315.07
660. The total amount due on Feb. 10, 2021 shall be:
a P103,215.09 c P248,530.16
b P145,315.07 d P1,498,530.16
661. A prospective client wanted to dispose of his personal car. He bought the car on
January 15, 2014. He required from his friend who is an Accountant whether or not
it is advantageous to sell the car at the end of the year because he was planning to
buy a new car the following year. His friend told him that he had to sell his car after
January 15, 2015 so he would have to report 50% capital gain only. Afraid that he
might be committing tax evasion, he asked your advice as to the propriety of his
friend’s advice. What would you tell him?
a He would not be committing tax evasion because postponing a sale of a capital
asset after 12 months from the date acquired is a form of tax avoidance which is
allowed under the law.
b He would be committing tax evasion because he will report 50% capital gain
only which is not allowed under the law
c He would be committing tax evasion because capital gain from sale of personal
car is not subject to income tax.
d He would be committing tax evasion because the postponement of the sale is
deliberate.
662. The taxpayer has both a VAT and non-VAT business with two sets of invoices.
Sales, VAT not included of:
VAT business, issuing VAT invoice P500,000
Non-VAT business, but issuing VAT invoice 100,000
199 | T a x a t i o n
Non-VAT business, issuing non-VAT invoice 200,000
Purchases of goods from VAT suppliers, VAT not included, for:
VAT business 120,000
Non-VAT business 110,000
Purchase of supplies for use of both VAT and non-VAT businesses
from VAT suppliers, VAT not included 5,000
Other operating expense paid for:
VAT business 300,000
Non-VAT business 50,000
The value-added tax payable is:
a 45,225 b 45,600 c
57,150 d 57,600
663. Continuing No. 65 and assuming that there were no inventories beginning and end
of the taxable period, the net income is: a 201,650 b 201,800 c 214,850 d 215,000
MangTado, has an apartment building situated at Mabalacat, Pampanga.
Owner’s Declaration showed the following valuation:

Land – P9,000,000
Assessor’s Value per assessment rolls:

Land – P7,000,000
Land Use Assessment Levels
Residential 20%
Agricultural 40%
Commercial, Industrial and Mineral 50%
Timberland 20%
Special classes: cultural, scientific 15%
200 | T a x a t i o n
Hospital, and water districts 10%
COMMERCIAL/ INDUSTRIAL BUILDING

FMV Over But Not Over Assessment Level
300,000 30%
300,000 500,000 35%
500,000 750,000 40%
750,000 1,000,000 50%
1,000,000 2,000,000 60%
2,000,000 5,000,000 70%
5,000,000 10,000,000 75%
10,000,000 80%
664. How much is the assessed value?

a P9,000,000 b
P13,000,000 c
P14,000,000 d
P16,000,000
665. Basic real
property tax a
P180,000 b
P65,000 c
P90,000
d P130,000
666. What is the maximum penalty for local taxes? a 12% b

24% c 36% d 72%
667. Assessed value shall be based on:

a Actual use b
Owner’s declaration c
Assessor’s
201 | T a x a t i o n
declaration d Fair market
value
Ginoo is the CEO of Mahusay Corporation and received as corporation income (net of all
exclusions) the amount of P5,000,000 in 2018. He did not give up though his modest
business ventures being an MBA graduate. In 2018, his total sales from his fast growing
business amounted to P3,000,000 for the first three (3) quarters and P3,500,000 in the
4th quarter. The details of his business operations in 2018 follow:
1st Quarter 2nd Quarter 3rd Quarter 4th Quarter
Total sales P 500,000 P500,000 P2,000,000 P3,500,000
Cost of sales (300,000) (300,000) (1,200,000)
(1,500,000)
Operating expenses (120,000) (120,000) ( 480,000) (520,000)
Taxable income P 80,000 P 80,000 P 320,000 P
1,480,000
668. The total income tax for 2018 is:
a. P478,000 b. P1,450,000 c. P1,928,000 d.
P2,077,200
669. What is Ginoo signified his intention to be taxed at 8% income tax rate on gross
sales in his 1st quarter income tax return be filed? The total income tax due and
payable (after tax credit/s) for 2018 is:
a.P387,200 b. P407,200 c. P1,837,200 d. P1,857,200
670. A car dealer could not pay his taxes on sales. The dealer delivered several units of
the car to the BIR in payment of the taxes. Which of the following statements is
correct? a This is a valid payment of the tax b This is in effect a collection of the
tax by distrait c This is a valid forfeiture of property
d This is not a valid procedure for collection of the tax
671. A PAN shall not be required in the following, except
202 | T a x a t i o n
a When the finding for any deficiency tax is the result of mathematical error in the
computation of the tax appearing on the face of the tax return filled by the
taxpayer
b When the excise tax due on excisable article has been paid
c When a discrepancy has been determined between the tax withheld and the
amount actually remitted by the withholding agent
d When a tax payer who opted to claim a refund or tax credit of excess creditable
withholding tax for a taxable period was determined to have carried over and
automatically applied the same amount claimed against the estimated tax
liabilities for the taxable quarters of the succeeding taxable year
672. How much is the output tax?

a. P600,000 b.P588,000 c. P540,00 d. None of the choices
673. A donation was made on April 15, 2010. The donor’s tax return was filed on May
30, 2011. The assessment was sent on June 1, 2013 which was protested
administratively by the taxpayer by filling a request for reconsideration on June 15,
2013. When the last day for the BIR to decide on the request for reconsideration?
a July 15, 2013 b August 14, 2013
c December 12, 2013

203 | T a x a t i o n
d Cannot be determined, date of submission of documents not given
Penduko married in 2013 under the absolute community of property regime, died on
August 30, 2015. He left the following properties and obligations:
Properties:
Cash in bank P
200,000
Residential lot inherited from his father on June 12, 2012 1,200,0
Family home: 00
House (community property) 1,300,0
00
Lot (exclusive property of Penduko) 1,000,0
00
Personal properties acquired by the spouses during marriage 200,00
0
Receivable from his sister (insolvent) 100,00
0
Inter vivos donation from his mother on July 2015, revocable 150,00
0
Receivable from SSS as indemnify for hospitalization
12,000
Obligations:
Unpaid mortgage on the residential lot contracted by the father:
At the time of death of father 300,000
At the time of death of Penduko 100,000
Funeral expenses (40% were shouldered by relatives) 80,000
Judicial expenses (30% were incurred after 6 months) 35,000
Claims against the estate (includes unpaid medical expenses of
P12,000) 35,000
Unpaid mortgage on the house (loaned to Penduko’s brother) 100,000
Casualty loss (50% was indemnified by the insurance company) 60,000
Donation to Barangay Engkanto (verbal donation) 25,000
204 | T a x a t i o n
674. The gross estate on the estate of Penduko is –
a. P 4,062,000 c. P 3,962,000
b. P 3,900,000 d. P 4,000,000
675. The vanishing deduction on the estate of Penduko is –

a. P 375,450 c. P 300,500
b. P 375,540 d. P 367,450
676. The total ordinary deductions from the community property of Penduko is –
a.P 807,000 c. P782,950
b. P582,900 d. P682,950
677. The net taxable estate is –

a.None c.P96,525
b.P 46,525 d. P 122,025
678. Which of the following is not a characteristic of the LGU’s taxing power?
I. Not an inherent power
II. Not an absolute power
III. The Local executive as the taxing authority
a. III only c. All of the above
b. I and II only d. None of the above

679. Who among the four will be entitled to discount on the purchase of good and
drinks?
205 | T a x a t i o n
a All of them c Lola Nidora and Rogelio only b All
of them except Yaya Dub d None of them
Domestic Export
Sales to private entities P500,000 P500,000
Sales of exempt goods 500,0
Input taxes passed on by VAT-registered suppliers on: 00
Sales to private entities 30,000
Sales to the government 25,000 20,000
Sales of exempt goods 10,000
Purchase of depreciable capital goods not attributable to any
specific activity (monthly authorized for 60 months) 120,000
The sales to the government were subjected to the automatic deduction of the 1%
creditable withholding tax (CWT) on its purchases from domestic suppliers.
680. The input taxes attributable to export sales which may be refunded or credit
against any other internal revenue tax, including the value-added tax on domestic
sales to private entities: a 20,000 b 30,000 c 50,000 d 60,000
681. What is the treatment of the different between the actual and standard input tax
on sales to the government?
a Income
b Expense
c Input tax credit d Capitalized cost
682. The journal entry to take up the domestic sales to the government is:
a. Cash or AR 560,000
Sales 560,000
b. Cash or AR 560,000
Sales 500,000
Output tax 60,000
c. Cash or AR 535,000
206 | T a x a t i o n
Final withholding VAT 25,000
Sales 500,000
Output tax 60,000
d. Cash or AR 530,000
Final withholding 25,000
Creditable withholding tax 5,000
Sales 500,000
Output tax 60,000
683. The journal entry to recognize the difference between the actual and standard
input tax on the sales to the government is:
a. Output tax 60,000 Income summary
20,000
Input tax 55,000
b. Output tax 60,000
Input tax 15,000
Incoming summary 20,000
c. Output tax 60,000
Input tax 55,000
Income summary 5,000
d. Output tax 60,000 Income summary
20,000
Input tax 55,000
VAT payable 25,000
Leonell Corp., a VAT-registered corporation has the following data taken from the books
of accounts for the first calendar quarter of 2015:
207 | T a x a t i o n
684. How much is the taxable sales for VAT purposes?
a. P5,000,00 b.P4,900,00 c. P4,500,000 d. None of the choices
685. Which of the following statement is incorrect?

a Registered BMBE’s shall be exempted from the coverage of the Minimum Wage
Law.
b Registered BMBE’s shall be exempted from the coverage of social security and
health care benefits for employees.
c LGUs are encouraged either to reduce the amount of local taxes, fees and
charges.
d BMBEs are exempt from GRT imposition under the Tax Code.

686. How much is the creditable input tax on sale to private entities?
a. P176,000 b. P96,000 c. P70,000 d.None of the choices
A closely-held domestic corporation had the following data in 2018:

Gross income from business P 3,000,000
Dividend from domestic corporation 100,000
Capital gain on sale of idle land on a selling price of P3,600,000, but
With a zonal valuation of P4,000,000 1,000,000
Capital gain on direct sale to buyer of shares of stock of
domestic Corporation 200,000
Interest on Philippine currency bank deposit 100,000
208 | T a x a t i o n
Business expenses 2,000,000
Net operating loss in 2017 250,000
Income taxes paid for the first three quarter of the year 150,000
Dividend declared and paid within the year 500,000
Appropriation of retained earnings for additional working capital purpose 800,000
Retained earnings at the start of the year 900,000
Paid in capital 1,000,000
687.The income tax still due and payable in 2018 is:
a. P 60,000 b. P 75,000 c. P150,000 d. P225,000
688 The improperly Accumulated Earnings Tax (IAET) is:

a. P 27,000 b. P36,000 c. P51,000 d. P 61,000
A resident citizen, married, with two qualified dependent children has the following
income and expenses for the year 2008:
Gain from sale of shares of stock listed and traded in
the local stock exchange, (Selling Price, P100,000) P30,000
Business expenses, USA 300,000
Interest income, peso bank deposit BPI-Manila 20,000
Gross income, Philippines 3,000,000
Interest income, US dollar deposit, BPI-Manila 50,000
Gross income, USA 2,000,000
Gain from sale of apartment house and lot
(Selling Price, P3,000,000: FMV, time of sale P5,000,000) 500,000
Gain from sale of share of stock not traded in the local exchange 150,000
Business expenses, Philippines 5,000,000
689. How much is the capital gains tax due?

690.Services contemplated under BMBE rules shall exclude:

I. Persons who are duly licensed by passing a government licensure
examination in connection with the exercise of one’s profession.
209 | T a x a t i o n
II. Juridical persons such as partnerships or corporations engaged in
consultancy, advisory and similar services where the performance of such
services are essentially carried out through licensed professionals.
a I only c Both I and II
b II only d Neither I nor II
691. Which among the following transactions is subject to capital gains tax?
a Transfer through adjudication of real property to an heir as a result of an
extrajudicial partition
b Sale by religious organization of a land and its improvements used for religious
purposes, and the proceeds thereof shall be used to purchase a new church site
and construction of a church building thereon
c Consolidation of more than one title owned by the same owner into one mother
title
d Sale by an individual of a condominium unit which is his principal place of
residence
692. For the given year 2015 the following information from business:
Gross Receipts from Business P 900,000

Rental Income 650,000
Operational Expenses 400,000
Real Properties 17,000,000
Compute Corporate Community Tax

a P 7,920 b P 7,560 c
P 1,120 d P10,500
Mr. and Mrs. Genaro Robles got married on August 3, 1988. They had a pre-nuptial
agreement under conjugal partnership of gains. Mr. Robles died in 2014. The following
properties with their fair market values, among others, were left behind:
210 | T a x a t i o n
Properties inherited by the decedent before the marriage P5,000,000
Properties received as donation by the surviving wife before marriage 3,000,000
Properties inherited by the decedent during the marriage 1,000,000
Income received during the marriage from the properties
inherited by the decedent before the marriage 100,000
Income from properties inherited by the decedent during the marriage 200,000
Properties acquired before the marriage by the decedent who had legitimate
descendants by a former marriage 500,000 Properties acquired
during the marriage 2,000,000 You were engaged
to assist the administrator in computing the gross estate of the decedent.
693. How much were the total exclusive properties of the decedent?
694. Ana’s residential land is located in Angeles City. Additional information are as
follows:
• Land area-500 sq. meters
• Fair market value in the tax declaration-P10,000/sq. m. 
Zonal value-P8,000/sq. m.
ASSESSMENT LEVELS
On lands:
CLASS ASSESSMENT LEVELS
Residential 20%
Agricultural 40%
Commercial 50%
Industrial 50%
Mineral 50%
Timberland 20%
The province has maximized the assessment level, the rate to that allowed by
law, and imposed
Special Education Fund. The assessed value (taxable value) of the land and the
total real property tax due, respectively is.
211 | T a x a t i o n
a P1M; P30,000 c P5M; P30,000 b P1M; P20,000
d P5M; P20,000


a. P244,000 b. P204,000 c. P120,000 d. None
696. Where is tax situs of Business Permit?
I. Local Government Unit where the sales outlet or business is located.

II. If there is no sales outlet the Local Government Unit where the principal office
is situated.
III. If the manufacturer principal office and factory outlet are the same the Local
Government Unit where the manufacturer’s principal office is situated.
IV. If manufacturer’s office different from factory outlet, 30% of business permit
tax will go to LGU where manufacturer’s office and 70% of business permit goes
to LGU where factory is situated.
a Only 1st statement is

correct b 1st and 2nd statement is
correct c 1st and 3rd
statement is correct d All
statement are correct
697. A domestic corporation’s 2018 computed NCIT and MCIT and creditable income
taxes withheld at source and excess MCIT and excess withholding tax from prior
year follow:
212 | T a x a t i o n
NCIT P 520,000
MCIT 550,000
Taxes withheld at source 125,000
Excess MCIT over NCIT (2years ago) 30,000
Excess Withholding income tax prior year 10,000
Quarterly income taxes paid 250,000
The income tax due and payable at the end of the year is:
a. P165,000 b. P135,000 c. P115,000 d. P105,000
698. Using the same date in the preceding number, only the NCIT amounted to
P670,000 and MCIT was P530,000. The income tax due and payable at the end of
the year is:
a. P 115,000 b. P145,000 c. P255,000 d. P285,000
deceased bought and used on the occasion of the burial 20,000 Expenses for
the deceased’s wake, including food and drinks 30,000
Medical expenses of the last illness 15,000
Card of thanks published on December 26,2014 5,000
How much were the deductible funeral expense? a P100,000 b. P80,000
c. P50,000 d. None of the choices
The following data were provided by the Estate of Jose Juan, head of family, a resident
of Quezon City. Mr. Juan died intestate on September 30, 2005.
213 | T a x a t i o n
Unpaid mortgage on inherited agricultural land 30,000
Other real properties 1,000,000
Judicial expenses incurred within six months after death 100,000
Bank deposit, PNB-Manila representing amount received by
heirs under R.A. No. 4917 500,000
Medical expenses of last illness (unpaid as of the time of death,
supported by bills and statements from hospital) 600,000
Land and house (family home) 3,000,000
Actual funeral expenses (30% paid for from
the estate, 70% paid for by relatives) 500,000
Claims against the estate other than unpaid mortgage 250,000
Agricultural land inherited from his father who
died 2 ½ years before his death 800,000 Claims
against insolvent persons 100,000
Other tangible personal properties 200,000
th
Unpaid real estate tax for the 4 quarter of 2005 20,000 The
agricultural land was inherited by the present decedent. Its value at the time of
inheritance was P 500,000. It had an unpaid mortgage of P 80,000.
700. How much was the taxable net estate?
701. What is the VAT treatment for sales within customs territory?
a Sales made by supplier from the ecozone to a purchaser in the customs territory
shall be considered an importation into the customs territory and therefore
vatable importation.
b Sales made by a supplier from the customs territory to a purchaser in the
ecozone shall be treated as exportation from the customs territory shall be zero
rated vat.
c Exempt if will not breach threshold of 30%. d None, beyond territorial
jurisdiction.
702. A taxpayer’s last entry in the books of accounts was on December 31, 2015. The
due date for filing the annual return was April 15, 2016 but its annual income tax
214 | T a x a t i o n
return was filed on May 15, 2016. The taxpayer has to preserve its books of
accounts, including subsidiary books and other accounting records up to when?
a December 31, 2025 c May 15, 2026
b April 15, 2026 d May 15, 2025
703. Who is the taxpayer as far as the initial public offering in the local stock exchange
of closely held corporations is concerned? a The purchaser of shares of stock
offered in the IPO. b The corporate purchaser.
c The corporate issuer.
d The local stock exchange.
704. S1: Under the TRAIN law, foreign currency denominated sale of goods to a
nonresident customer in the Philippines is subject to 0% VAT.
S2: Monthly lease of residential unit amounting to P15,000,000 is subject to VAT. S3:
Input tax on purchases of capital goods, aggregate acquisition cost of which exceeds
P1M, can now be claimed in full upon acquisition.
a True, True, True b True, False, True c False, True, False
d False, False, False
An international air carrier having or maintaining flight operations to and from the
Gross receipts, sales of tickets to passenger originating
705. You were asked to compute the tax due to the Philippine Government. How much
is the gross receipts for the Philippine common carrier’s tax purposes? a
P6,500,000 b. 4,500,000 c. P1,500,000 d. None of the choices
706. If the shares of Edu were also at P1.50 per share, how much is the total tax on the
Initial Public Offering?
215 | T a x a t i o n
a P 3,000 b. 3,750 c. 6,75 d.None
707. The Philippines adheres to promote small scale business as essential to country’s
economic development since the government gave tax exemption for income
generated from its activities by Micro Business Enterprises. What, is therefore, a
“Micro Business Enterprise”?
a Any business engaged in production, processing or manufacturing of products

or commodities, including agro-processing, trading and services whose total
assets excluding loans and lands not exceeding P3,000,000.
b Any business engaged in production, processing or manufacturing of products
assets including loans and excluding lands not exceeding P 3,000,000.
c Any business engaged in production, processing or manufacturing of products
capitalization not exceeding P3,000,000.
d Any business engaged in production, processing or manufacturing of products
capitalization excluding lands not exceeding P3,000,000.
708. Which business is required quarterly submission of Percentage Tax Return?

a International Carriage b Banks c Overseas Communication d Amusement places
VAT payments for January and February P
100,000
00
00
216 | T a x a t i o n
Gross receipts from practice of profession, net of 10% withholding tax 1,710,000
Expenses in connection with the practice of profession (80% VAT-subject) 100,000
709. How much is the taxable net income using itemized deductions?
a. P1,300,000 b. P1,175,000 c. 1,140,000 d. None of the choices
710. If in June 2015, Bataan Corporation again decides to increase capitalization by

offering another 30,000 of unissued shares to the public at P2 per share, such
followon/follow-through shall be exempt from – a Percentage tax and
documentary stamp tax b Documentary stamp tax but not percentage tax c
Percentage tax but not documentary stamp tax d Neither percentage tax
nor documentary stamp tax

I – Once excise tax is paid, VAT shall not be paid.
II – Taxpayer can be file VAT and percentage tax return in the same quarter.
a True, True b True, False c False, True d False, False
P12 per share. His broker-friend advises him not to sell his shares during the IPO
but instead wait until after the IPO. After the IPO, the outstanding shares of the
closely held corporation are 1,000,000 shares and are now selling at P14 per share
at the local stock exchange. The stockholder of the closely held corporation
approaches you to seek your advice because he is also planning to sell the shares
directly to his friend and, therefore, not traded through the local stock exchange at
P15 per shares. How much is the percentage tax if he sells his shares during the
IPO?
713. In case Taba decides to offer his existing 50,000 shares to the public subsequent to
IPO at P2 per share; the percentage tax shall be –
a.P25 b. 500 c . 300 d. 4,000
217 | T a x a t i o n
714. Statement 1 – Qualified individuals who availed of the 8% income tax rate shall be
allowed a deduction and/or exemption of the first P250,000 from the gross sales
and/or gross receipts (including other non-operating income) whose sources of
income come from compensation, trade, business and exercise of profession.
Statement 2 – the option to avail of the 8% income tax rate be signified annually on or
before May 15 each calendar taxable year. such election shall be irremovable for said
calendar taxable year unless the gross sales and/or gross receipts (including other
nonoperating income) exceeded the VAT threshold of P 3million in which case the
taxpayerindividual, shall automatically be subject to the graduated income tax rates of
0%-35%.
a Both statement are true b Both statement are false c Statement 1 is true
but statement 2 is false d Statement 1 is false but statement 2 is true
715. Pioneer enterprise shall mean a registered enterprise, except a Engaged in

the manufacture, processing or production of goods, products, commodities or raw
materials that have not been or are not being produced in the Philippines on a
commercial scale.
b This uses a design, formula, scheme, method, process or system of production or
transformation of any element, substance or raw materials into another raw
materials or finished goods which is new and untried in the Philippines. c
Engaged in the assembly or packaging of goods, products, commodities or
raw materials that have not been or are not being produced in the Philippines. d
materials that have not been produced 1in the Philippines on a commercial scale.
Wilson died of a car accident. He died intestate on October 10,2015, survived by his
wife, Ging and a son. Exclusive properties of Ging:
Car P
400,000
Lot in Quezon City 2,000,0
00
Other real and personal properties 800,0
Exclusive properties of Wilson: 00
House and lot in Sta. Rosa Laguna, family home 1,900,0
218 | T a x a t i o n
00
Other personal properties 800,0
00
Other real properties 1,500,0
Conjugal properties of the spouses: 00
Cash on hand in bank 500,0
00
Receivables as prize in a raffle sponsored by 50,0
PICPA Receivable from an insurance company where the son, 00
Gino was designated as a revocable beneficiary. The premiums
were
paid out of the conjugal funds. 150,00
The following deductions were claimed: 0
0
Judicial expenses
15,000
Claims against the estate, not notarized 50,000
Claims against insolvent persons 30,000
Unpaid mortgage on the real properties (contracted for the
benefit of the conjugal property 200,000
Unpaid mortgage on house and lot in Laguna (the proceeds
of which did not redound to the benefit of the family) 350,000
Accrued income taxes 35,000
Income tax on income earned from October 11 to
December 31, 2015 7,500
716. The gross estate is – a P 4,930,000 b. 4,900,000 c. 4,850,000 d. 8,130,000
717. The deductible share of surviving spouse is – a P 255,000 b. 127,500 c.

112,500 d. 2,227,500
718. The net estate subject to tax is –

a P 1,962,500 b. 1,977,500 c. 1,850,000 d. None
219 | T a x a t i o n
719. Shares of stock of Sweety Pie Co., a domestic corporation, held as investment by
Benru bought at P1,000,000 cost in mid 2017, are listed and traded in the local
stock exchange. A year later, Benru sold his stockholding thru his stock broker for
P2,850,000, net of a P150,000 commission paid to the agent.
The appropriate tax in the transaction is:
a P17,100 percentage tax b
P18,000 stock transaction tax c
P180,000 final capital gain tax d
P277,500 final capital gain tax
720. To be entitled to registration under the Investment Priorities Plan, applicant must
satisfy that Board of Investments that the applicant is, except a Filipino citizen
b If it is a partnership or association, that it is organized under the laws of the
Philippines and that at least 60% of its capital is owned or controlled by
Filipinos.
c If it is a corporation, it is organized under Philippine laws and that at least 60%
of the authorized capital stock is owned and held by Philippine nationals. d If it
is a corporation, it is organized under Philippine laws and that at least sixty
60% of the capital stock outstanding and entitled to vote is owned and held by
Philippine nationals and at least 60% of the members of the Board od Directors
are citizens of the Philippines.
721. The following among other are amendments to the NIRC of 1997 as amended by
R.A. 10963 or the Train Law. Which one is Not?
a Removal of personal and additional exemptions allowed to individual income
taxpayers, whether the source of income is purely derived from employment or
self-employment or even as mixed income earner.
b Raising the limit of 13th month pay and other benefits received by officials and
employees of public and private entities of up to P90,000 exclusion from gross
income.
220 | T a x a t i o n
c employee’s share in the GSIS, SSS, Philhealth and PAG-IBIG contributions, as
well as the union dues are no longer allowed as mandatory deductions from
gross compensation of employees in arriving at the taxable compensation
income.
d individuals earning purely self-employment and/or practice of profession
income whose gross sales and/or gross receipts and other non-operation
income do not exceed the new VAT threshold of P3,000,000 shall have the
option now to avail of being taxed under the new graduated rates of from 0% to
35% or at 8% income tax rate based on gross sales and/or gross sales and/or
gross receipts and other non-operating income in excess of P250,000 in lieu of
the graduated income tax rates under Section 24(A)(2)(a) and the percentage
tax of 3% under section 116, all under the tax Code, as amended.
722. One of the following statements is false. Which is it?

a Foreign owned firms are nor eligible to register their activity with the BOI.
b Filipino enterprises are eligible to register their activity with the BOI if their
project is listed as a preferred project in the current Investment Priorities Plan
(IPP).
c An activity which is not listed with the BOI may also be entitled to incentives if
at least 50% of the production is foe export (for 60% Filipino and 40%
foreignowned enterprises).
d An activity of more than 40% foreign-owned enterprises which is not listed with
the BOI may also be entitled to incentives if at least 70% of its production is for
export.
723. Statement 1 -every individual who is receiving self-employment income, whether
it constitutes the sole source of his/her income or in combination with
compensation and other fixed or determinable income shall make and file a
declaration of his/her estimated income tax for the current calendar taxable year
on or before May 15 of the same current taxable year.
Statement 2 - the amount of estimated income tax for the current calendar taxable year
shall be paid in four (4) installments as follows:
First installment – on or before May 15
Second installment – on or before August 15
Third installment – on or before November 15; and
221 | T a x a t i o n
Fourth installment – on or before April 15 of the following calendar taxable year
when the final or adjustment annual income tax return covering the previous calendar
taxable year would have been filled.
a Both statement are correct b Both statement are incorrect c Statement

1 is correct but statement 2 is incorrect d Statement 2 is correct but statement
1 is incorrect
724. Alanis, a resident citizen, single but head of family, died January 3, 2015. The
following are his data:
Properties:
Real properties (excluding family home of P1,100,000) P 3,200,000
House and lot in Sydney, Australia 1,500,000
Other personal properties 800,000
Deductions:
Claims against insolvent persons 100,000
Claims against the estate, not notarized 50,000
Unpaid mortgage on the family home 30,000
The personal properties do not include shares of stocks valued at P50,000 which were
purchased by the decedent from Astra Company one month prior to his death. The
house in Sydney was inherited by Alanis from his father who died 2 ¼ years ago. Said
property was mortgaged for P200,000 which was paid by the decedent before his death.
The gross estate is –
a P 4,050,000 b. 6,750,000 c. 6,650,000 d. 5,550,000
725. The total deductions (excluding standard deductions) is –

a P 250,000 b. 300,000 c. 1,250,000 d. 2,001,111
222 | T a x a t i o n
726. Mr. and Mrs. Genaro Robles got married on August 3, 1988. They had a pre-nuptial
agreement under conjugal partnership of gains. Mr. Robles died in 2014. The
following properties with their fair market values, among others, were left behind:
Properties inherited by the decedent before the marriage P5,000,000
Properties received as donation by the surviving wife
before marriage 3,000,000
Properties inherited by the decedent during the marriage 1,000,000
Income received during the marriage from the properties inherited
by the decedent before the marriage 100,000
Income from properties inherited by the decedent during the marriage 200,000
Properties acquired before the marriage by the decedent who had
legitimate descendants by a former marriage 500,000
Properties acquired during the marriage 2,000,000
You were engaged to assist the administrator in computing the gross estate of the
decedent.
How much were the total conjugal properties?

a. P5,100,000 c. P2,000,000
b. P2,100,000 d. None of the choices
727. Trillo, a resident of Quezon City, died on June 5, 2015 with the following data:
Property acquired by Trillo before marriage P

1,500,000
Property acquired by his wife before marriage
Conjugal family house and lot, Quezon City, certified by 1,000,000
Barangay Chairman 1,600,0
House in Marbel City (exclusive of Trillo), certified as family 00
home by Barangay captain 1,000,0
Proceeds of the life insurance, irrevocable, beneficiary is the 00
estate 500,00
0
Claims against insolvent debtors (40% uncollectible) 100,00
0
223 | T a x a t i o n
Inter vivos donations to City Government of Quezon 200,00
0
Actual funeral expenses (50% paid by relatives) 300,00
0
Judicial expenses 250,00
0
The net taxable estate is –

a P 6,040,000 b. 1,580,000 c. 1,550,000 d. 1,370,000
Lana, single, an American residing in the Philippines, died leaving the following properties:
Location of property Net estate Foreign estate tax
paid
Philippines P 1,500,000 P–
“A” foreign country 2,000,000 210,000
“B” foreign country 2,500,000 30,000
728. Common carrier 1: Domestic sea or air carriers for passengers or cargoes.
Common carrier 2: International Sea or carriers of cargoes.
What is the respective business tax rate on the common carriers identified above if they
travel from the Philippines to a foreign country?
Carrier 1 Carrie
r2
a. 0% 3%
b. 3% 3%
c. 0% 0%
d. 12% 3%
729. The franchise tax on grantees of radio and television broadcasting companies whose
annual gross receipts in any year do not exceed P10,000,000 shall be
a 1% of gross receipts b 2% of gross receipts c 3% of gross receipts d 3% of gross

receipts
224 | T a x a t i o n
Radio Station DYKKL has an annual gross receipts ranging from P4,000,000 to P5,000,000.
During the month, it had a gross receipts from advertisements of P330,000, while the
disbursement subject to VAT amounted to P224,000, inclusive of tax.
730. The franchise tax payable by DYKKL is –

a P 30,000 b. 9,900 c. 50,000 d. 10,000
225 | T a x a t i o n
731. How much is the VAT payable if it is registered under the VAT system?
a P 10,000 b. 9,900 c. 11,357 d.
15,600
Too Big Company, a public service company, is a holder of a franchise to engage in

the business of supplying water to several towns and cities in Luzon. As recorded in
its books during the month, its total gross receipts from the sale of water amounted
to P2,550,000, while the receipts from rental of equipment and other services was
P280,000. The operating expenses amounted to P2,000,000; 11% of which was paid
to VAT registered persons.
732. The percentage tax due is –

a P 51,000 b. 5,000 c. 16,500 d. 56,500
733. The value-added tax payable for the month is –

a P 33,600 b. 5,000 c. 16,500 d.7,200
ANSWER KEY
TAXATION
202 | T a x a t i o n
1 B 31 A 61 B 91 B 121 D 151 B
2 C 32 A 62 B 92 C 122 C 152 C
3 B 33 C 63 B 93 D 123 A 153 A
4 A 34 A 64 A 94 A 124 A 154 B
5 C 35 A 65 D 95 A 125 D 155 C
6 D 36 C 66 B 96 C 126 B 156 A
7 C 37 B 67 A 97 A 127 B 157 C
8 B 38 D 68 A 98 A 128 A 158 A
9 A 39 B 69 D 99 B 129 D 159 D
10 A 40 A 70 B 100 B 130 C 160 D
11 C 41 D 71 A 101 D 131 C 161 C
12 A 42 A 72 B 102 C 132 C 162 A
13 A 43 A 73 B 103 C 133 C 163 D
14 A 44 D 74 D 104 C 134 A 164 A
15 D 45 C 75 C 105 C 135 A 165 B
16 A 46 B 76 C 106 A 136 B 166 A
17 A 47 A 77 B 107 C 137 B 167 A
18 A 48 D 78 C 108 C 138 C 168 C
19 B 49 C 79 D 109 B 139 D 169 D
20 D 50 B 80 B 110 C 140 A 170 D
227 | T a x a t i o n
ANSWER KEY
21 B 51 A 81 A 111 B 141 D 171 B
22 B 52 A 82 A 112 C 142 A 172 C
23 A 53 B 83 A 113 C 143 A 173 A
24 B 54 D 84 A 114 C 144 A 174 A
25 D 55 C 85 A 115 E 145 B 175 A
26 A 56 A 86 B 116 A 146 B 176 A
27 C 57 C 87 B 117 A 147 B 177 D
28 B 58 C 88 C 118 B 148 D 178 A
29 B 59 C 89 D 119 B 149 C 179 B
30 A 60 D 90 C 120 C 150 A 180 D
TAXATION
181 D 211 D 241 A 271 B 301 D 331 B
182 C 212 A 242 B 272 A 302 B 332 B
183 A 213 D 243 D 273 D 303 A 333 D
184 D 214 A 244 B 274 D 304 C 334 D
185 A 215 C 245 B 275 C 305 D 335 A
186 D 216 D 246 D 276 A 306 B 336 A
187 D 217 A 247 A 277 C 307 D 337 A
188 A 218 C 248 C 278 C 308 B 338 C
189 D 219 D 249 C 279 C 309 D 339 D
190 B 220 B 250 A 280 A 310 B 340 C
191 B 221 D 251 D 281 C 311 D 341 A
192 A 222 D 252 D 282 A 312 D 342 A
193 B 223 D 253 A 283 A 313 A 343 B
228 | T a x a t i o n
ANSWER KEY
TAXATION
194 A 224 C 254 D 284 A 314 C 344 D
195 A 225 C 255 A 285 A 315 C 345 D
196 D 226 A 256 C 286 C 316 C 346 A
197 A 227 A 257 C 287 C 317 B 347 B
198 C 228 D 258 C 288 C 318 B 348 B
199 A 229 A 259 D 289 A 319 A 349 D
200 A 230 A 260 A 290 D 320 B 350 A
201 B 231 C 261 B 291 D 321 A 351 A
202 D 232 A 262 B 292 C 322 B 352 A
203 B 233 A 263 D 293 C 323 B 353 A
204 A 234 D 264 A 294 B 324 D 354 C
205 A 235 B 265 C 295 C 325 A 355 A
206 D 236 C 266 A 296 D 326 C 356 B
207 C 237 D 267 A 297 D 327 B 357 D
208 D 238 D 268 A 298 B 328 D 358 A
209 C 239 D 269 A 299 D 329 A 359 C
210 B 240 A 270 C 300 D 330 B 360 A
361 B 391 A 421 D 451 D 481 B 511 D

362 A 392 A 422 A 452 D 482 D 512 C
363 A 393 A 423 C 453 D 483 B 513 B
364 B 394 B 424 B 454 C 484 B 514 C
365 B 395 B 425 D 455 A 485 D 515 C
366 C 396 B 426 C 456 B 486 C 516 B
229 | T a x a t i o n
ANSWER KEY
367 B 397 A 427 C 457 B 487 D 517 A
368 C 398 A 428 A 458 B 488 A 518 B
369 C 399 D 429 B 459 B 489 C 519 C
370 B 400 B 430 C 460 A 490 B 520 C
371 D 401 D 431 B 461 A 491 A 521 B
372 B 402 B 432 C 462 B 492 B 522 C
373 B 403 A 433 D 463 A 493 C 523 A
374 C 404 D 434 A 464 A 494 B 524 B
375 D 405 B 435 D 465 D 495 B 525 C
376 B 406 B 436 C 466 B 496 D 526 D
377 B 407 C 437 A 467 A 497 D 527 A
378 C 408 A 438 C 468 D 498 C 528 A
379 C 409 D 439 D 469 B 499 B 529 D
380 A 410 C 440 B 470 D 500 D 530 B
381 D 411 C 441 B 471 A 501 B 531 C
382 C 412 B 442 B 472 A 502 C 532 C
383 A 413 B 443 D 473 C 503 C 533 B
384 B 414 D 444 D 474 A 504 B 534 D
385 C 415 C 445 C 475 D 505 D 535 B
386 C 416 B 446 C 476 C 506 B 536 D
387 A 417 A 447 B 477 B 507 B 537 A
388 C 418 C 448 C 478 D 508 B 538 B
389 C 419 B 449 B 479 C 509 C 539 D
390 D 420 D 450 C 480 C 510 C 540 B
230 | T a x a t i o n
ANSWER KEY
TAXATION
541 B 571 D 601 C 631 A
542 C 572 D 602 B 632 B
543 D 573 A 603 D 633 B
544 A 574 B 604 A 634 C
545 C 575 A 605 B 635 B
546 B 576 C 606 A 636 C
547 B 577 D 607 B 637 D
548 B 578 B 608 B 638 B
549 C 579 D 609 D 639 A
550 B 580 C 610 C 640 C
551 C 581 A 611 B 641 B
552 A 582 C 612 C 642 A
553 D 583 C 613 D 643 B
554 B 584 C 614 C 644 C
555 C 585 C 615 A 645 C
556 D 586 D 616 A 646 A
557 B 587 B 617 D 647 D
558 B 588 A 618 A 648 D
559 B 589 D 619 B 649 C
560 C 590 D 620 A 650 C
561 D 591 C 621 B 651 A
562 A 592 C 622 D 652 B
563 C 593 B 623 C 653 B
564 B 594 B 624 D 654 B
565 A 595 D 625 D 655 D
231 | T a x a t i o n
566 C 596 A 626 B 656 D
567 B 597 C 627 B 657 D
568 A 598 A 628 B 658 B
569 A 599 A 629 B 659 B
570 B 600 B 630 D 660 C
661 C 691 C 721 C

662 C 692 A 722 A
663 C 693 B 723 A
664 A 694 A 724 B
665 A 695 B 725 C
666 C 696 D 726 D
667 A 697 A 727 B
668 D 698 C 728 A
669 A 699 B 729 C
670 B 700 B 730 B
671 B 701 A 731 D
672 C 702 D 732 A
673 B 703 C 733 D
674 D 704 D
675 A 705 B
676 C 706 C
677 C 707 B
678 A 708 C
679 B 709 A
680 C 710 C
681 B 711 D
682 D 712 A
232 | T a x a t i o n
ANSWER KEY
TAXATION
683 A 713 B
684 C 714 D
685 B 715 C
686 B 716 A
687 B 717 B
688 C 718 B
689 D 719 B
690 C 720 C
233 | T a x a t i o n
209 | T a x a t i o n

Taxation Sir Salva

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Taxation Sir Salva

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1.

Among the nature of taxation is that it is an inherent power that is an attribute of

a. Courts cannot issue an injunction to enjoin the collection of taxes.

a. Inherent limitation c. Legislative in character

a. international law. c. reciprocity.

a. valid because there is a proper classification.

5. Public money or property may be appropriated:

a. That he has been deprived of due process of law.

7. In case of ambiguity, tax laws shall be interpreted:

a. strictly against the taxpayer.

a. Yes, because it was issued as a source of revenue.

10. What is the prescribed minimum percentage of compromise in case of doubtful

a. 40% of basic assessed tax c. 30% of the basic assessed tax

12. Which tax cases need not be covered by an LA?

a. Both I and II c. I only

a. Both statements are correct

The following data were provided by an international air carrier:

Freight and cargo fees (cargo originating from the

25. Which of the following statements is incorrect?

26. Which of the following will constitute a taxable income?

29. How much is the income tax due?

a. gross annual sales, earnings, receipts or output exceed Three million

a. Both statements are correct.

36. Which of the following statements is incorrect?

a. Both statements are correct

46.Under the TRAIN Law, the estate tax rate is:

The deductible funeral expense is:

The deductible judicial expenses are:

a. Quezon City c. Masbate City

The taxable net estate is:

61. Jose made the following gifts:

a. I only c. Both I and II

a Only the first statement is correct b

78. Which of the following is incorrect? The percentage tax is:

How much is the next tax due and payable?

89. Which of the following is not correct?

90. Which of the following statement is incorrect?

a. True, true c. True, false

95. Under the Philippine Constitution, a non-profit, non-stock educational institution is

96. Which of the following is not an example of excise tax?

98. A non-profit, non-stock educational corporation earned interest on its bank

102. One of the characteristics of a tax is that:

Judith exclusive properties of P5,000,000

109.The taxable net estate of Mocha was:

Net income during the month P 40,000

110. The business tax payable if Makasalanan Corporation is a bus company

Regular monthly bills P 770,000

The percentage tax to be remitted by BATELCO during the quarter is –

a I, II, III and IV

116. Tax as distinguished from license fee

118. Which statement refers to police power as distinguished from taxation?

122. Which of the following is not an example of excise tax

124. Which of the following is false?

125. One of the following is not a remedy against double taxation

128. Statement 1. The power of taxation is inherent in sovereignty being essential to

130. Which of the following statements is true?

132. Which of the following statement is wrong?

133. Choose the best answer

135. Decedent was a citizen of the Philippines.

The estate tax due and payable is: