1.

Under the TRAIN, the donor’s tax for each calendar year shall be:

a. six percent (6%) computed on the basis of the total gifts made during the calendar year.
b. six percent (6%) computed on the basis of the total gifts in excess of Thee hundred thousand pesos
(P300,000) exempt gift made during the calendar year.
c. six percent (6%) computed on the basis of the total gifts including those made in the previous calendar
year in excess of Two hundred fifty thousand pesos (P250,000) exempt gift made during the calendar year.
d. 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.

2. (First statement: The computation of the donor’s tax is on a cumulative basis over a period of one
calendar year.
Second statement: Husband and wife are considered as separate and distinct taxpayers for purposes of the
donor’s tax.

a. Both statements are correct

b. Both statements are incorrect
c. Only the first statement is correct
d. Only the second statement is correct

3. Patricia donated P110,000.00 to her friend Kimberly who was getting married. Patricia gave no other gift
during the calendar year. What is the donor's tax implication on Patricia’s donation?
a. The P100,000.00 portion of the donation is exempt since given in consideration of marriage.
b. A P10,000.00 portion of the donation is exempt being a donation in consideration of marriage.
c. Patricia shall pay a 6% donor's tax on the P110,000.00 donation.
d. The P110,000.00 donation is exempt from donor's tax.

4. Mr. Gerardo Ireneo transfers inter vivos a personal property to his son on March 15, 2018. His son who
lives in another province let his father know that he is accepting the gift on March 31, 2018. The personal
property was delivered and received on April 15, 2018. When shall be the last day to file the donor’s tax
return and pay the donor’s tax to avoid penalties?

a. April 14, 2018 c. May 15, 2018

b. April 30, 2018 d. None of the choices

The following donations during the calendar year 2018 are made to relatives:

Date Amount
January 30, 2018 P 2,000,000
March 30, 2018 1,000,000
August 15, 2018 500,000

5. How much is the tax due on the gift made on January 30, 2018?
a. P 204,000 c. P 80,000
b. P 105,000 d. P 50,000

6. How much is the tax due on the gift made on March 30, 2018?
a. P 204,000 c. P 60,000
b. P 124,000 d. P 50,000
7. How much is the tax due on the gift made on August 15, 2018?
a. P 204,000 c. P 80,000
b. P 124,000 d. P 30,000

Mr. Jose Mapagbigay donated P500,000 to the City of Manila and P100,000 to his best friend who
graduated summa cum laude.

8. For donor’s tax purposes, how much should be the gross gifts?
a. P 600,000 c. P 400,000
b. P 500,000 d. None of the choices

9. For donor’s tax purposes, how much should be the deductions?

a. P 500,000 c. P 100,000
b. P 400,000 d. None of the choices

10. On one date, Lara made donations of property in the Philippines to a non-stranger, and of property
outside the Philippines to a stranger. In taking a credit for the foreign donor’s tax paid, the credit shall be
against the Philippine donor’s tax on the:
a. donation to the non-stranger plus that to the stranger.
b. donation to the non-stranger.
c. donation to the stranger.
d. none of the options given.

On June 10, 2018 Mr. Paolo Sao donated P50,000 cash to his favourite grandson who is getting married on
June 16, 2018. For donor’s tax purposes the exempt dowry shall be:
a. P50,000. c. P5,000.
b. P10,000. d. none.

11. Mr. Andres, VAT-registered real estate dealer, transferred a parcel of land held for sale to his son as gift
on account of his graduation. For VAT purposes, the transfer is:
a. not subject to VAT because it is a gift.
b. subject to VAT because it is a deemed sale transaction.
c. not subject to VAT because it is subject to gift tax.
d. subject to VAT because it is considered an actual sale.

12. Sale of orchids and other ornamental plants is:

a. subject to 12% VAT. c. exempt from VAT.
b. subject to 0% VAT. d. none of the choices

A VAT-registered taxpayer has the following transactions during a particular month:

a. Sale of two (2) adjacent condominium units, P2,500,000
b. Sale of one (1) residential lot, P1,500,000
c. Sale of one (1) parking lot in the condominium, P500,000
d. Sale of fresh fruits, vegetable and fish, P2,000,000

13. He approaches you to ask how much shall be subject to VAT. What will your answer be?
a. P4,500,000 c. P500,000
b. P3,000,000 d. None of the choices
14. A lessor leases his 15 residential units for P14,500 per month and the other 15 residential units for
P15,500 per month. During the taxable year, his accumulated gross receipts amounted to P5, 400,000.
How much is the output VAT?
a. P648,000 c. P313,200
b. P334,800 d. None of the choices

The Anong Pizza Na, VAT-registered issued the following official receipt to a customer who was with a
senior citizen: Ordered by a senior citizen
Parma pizza P880.00
Mango basil 180.00 P1,060.00
Ordered by the non-senior citizen
House salad 420.00
Beef rendang 590.00
Avocado smoothie 190.00 1,200.00
Total sales (VAT inclusive) P2,260.00

15. How much is the VAT-exempt sale?

a. P2,017.85 c. P946.43
b. P1,060.00 d. None of the choices

16. How much is the sales discount for senior citizen?

a. P403.57 c. P189.29
b. P212.00 d. None of the choices

A VAT subject real estate dealer sells a residential lot on January 15, 2018. The following information are
made available onthe terms of the sale:
Gross selling price P 3,000,000
Initial payments on January 15, 2018
(consisting of down payment and instalments in the year of sale) 900,000
Balance to be paid in equal installment,
installments starting February 15, 2018 2,100,000

The zonal value of the residential lot was P2,800,000.

17. Does the sale qualify under installment plan?

a. Yes, because the sale has initial payments and, therefore, qualify under installment plan.
b. No, because the initial payments exceed 25% of the selling price.
c. Yes, because the initial payments include installments in the year of sale.
d. No, because the initial payments exceed 25% of the zonal value.

18. What is the tax base for VAT purposes?

a. P3,000,000 c. P2,100,000
b. P2,800,000 d. None of the choices

19. How much was the output tax on January 15, 2018 using 12% VAT rate?
a. P 360,000 c. P 108,000
b. P 300,000 d. None
20. How much was the output tax on February 15, 2018 using 12% VAT rate?
a. P 360,000 c. P 108,000
b. P 300,000 d. None

21. VAT-registered person issues a VAT invoice or VAT official receipt for a VAT-exempt transaction, but
fails to display prominently on the invoice or receipt the words “VAT-exempt sale”, the transaction shall:
a. still be exempt from value-added tax.
b. become taxable and the issuer shall be liable to pay VAT thereon.
c. be effectively subject to zero percent.
d. be considered erroneous transaction and must be disregarded.

22. Suppose the accounting period adopted by the taxpayer is fiscal year ending October 2018, when is the
due date for the filing of his monthly VAT declarations for the first and second month of the first fiscal
quarter?
a. November 20, 2018 and December 20, 2018
b. August 20, 2018 and September 20, 2018
c. November 20, 2017 and December 20, 2017
d. December 20, 2017 and January 20, 2018

A taxpayer is engaged in VAT-subject transactions but his annual gross sales do not exceed the VAT
threshold. Hence, he did not register under VAT system. However, during the current year, his quarterly
gross sales follow:
First quarter P1,000,000
Second quarter 1,000,000
Third quarter 1,000,000
Fourth quarter 1,000,000

23. Which of the following statements is correct?

I – The taxpayer is required to update his registration from non-VAT to VAT taxpayer in the fourth quarter.
II - The taxpayer is required to update his registration from non- VAT to VAT taxpayer until taxpayer is
liable to VAT.
III - VAT shall be imposed prospectively.
IV - Percentage tax due on the non-VAT portion of the sales/receipts shall be collected without penalty, if
timely paid on the due date immediately following the month/quarter when taxpayer ceases to be a non-
VAT.

a. I, II, III and IV are correct

b. I, II and III are correct
c. Only I and II are correct
d. Only III and IV are correct

24. How much is the VAT due?

a. P480,000 c. P90,000
b. P120,000 d. None of the choices because the taxpayer cannot claim input tax
X Company, a restaurant business, used accrual basis of accounting in its financial statements. Its operation
for the year ended showed the following:

Gross revenue on account to customers 3,500,000

Gross receipts from senior citizens, net of 20% discount 400,000
Purchases, directly attributable to customers other than senior 300,000
citizens, net of VAT
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

25. What is the Output VAT?

A. 420,000
B. 468,000
C. 396,000
D. 372,000

26. What is the creditable input VAT?

A. 132,000
B. 129,000
C. 123,000
D. 120,000

X Company, a hardware business, used accrual basis of accounting in its financial statements. The
operations for the current year showed the following information:

Gross revenue 3,500,000

Sales returns 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

27. What is the Output VAT?

A. 420,000
B. 396,000
C. 372,000
D. 360,000
28. What is the creditable input VAT?

A. 120,000
B. 184,800
C. 166,800
D. 108,000

Mr. Jose made the following donations for the year:

January - to his Son amounting to P250,000

February - to an Officemate P30,000
March - to his daughter who got married in the same month P60,000
March - to his daughter in law P40,000

29. How much is the donor’s tax for the month of January?

A. 4,000
B. 3,000
C. 2,000
D. 1,000

30. How much is the donor’s tax for the month of February?

A. 9,000
B. 5,200
C. 1,000
D. Exempt

31. How much is the donor’s tax for the month of March?

A. 14,000
B. 8,000
C. 4,000
D. Exempt

Mrs. Mapagbigay made the following donations for taxable year?

February : to a legitimate daughter who got married on Valentine’s day amounting to P290,000.

July : to legitimate son’s birthday celebration amounting to P150,000.

: to an adopted child who got married P9,500

31. What is the donor’s tax due for month of February?

A. 6,000
B. 5,600
C. 5,200
D. 900
 32. What is donor’s tax due for month of July?

A. 6,000
B. 5,600
C. 5,200
D. 11,200

33. What is donor’s tax due for month of July if the gift given to the son was split into P75,000 in July and
P75,000 in August next year?

A. 3,000
B. 2,800
C. 2,600
D. 5,100

34. What is donor’s tax due for month of August?

A. 3,000
B. 2,800
C. 2,600
D. Exempt

35. A nontaxable entity that dissolves and transfers all its property in favor of another entity will remain
nontaxable if it meets the requirements of the law, except

A. The transferee is another nonstock nonprofit organization.

B. Not more than 30 % of the donation is used for administrative purpose.
C. The transferee is a educational, charitable, religious, cultural or social welfare, philanthropic
organization.
D. The transferee is a nongovernment organization.

36. I. Gross selling price, In the absence of zonal value or fair market value as determined by the BIR
Commissioner, shall refer to the market value shown in the latest real property tax declaration or the
consideration, whichever is higher.

II. Vat may be imposed together with other percentage tax

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

37. DKOMAGETS a manufacturer of “GETS - cigarettes”. In making sales, taxes on the products and
transactions are passed on to the buyers. For vat purposes, which of the following forms part of the gross
selling price?
A. Value added tax C. Excise tax
B. Percentage tax D. Income tax
38. When the donee is a stranger, the tax payable by the donor for a donation made in 2018 shall be:
A. M6% of net gifts in excess of P250,000
B. 30% of net gifts.
C. Based on graduated rates
D. Based on the graduated rates or 30% of the net gifts, at the option of the donor.

39. Company A sells real property in the course of its business. During the last quarter of 2018, it had sold a
parcel of land under the following terms (vat inclusive):
Total contract price P1,120,000
Down payment 10/05/2018 112,000
1st installment (12/31/2018) 112,000
2nd installment (2/1/2019) 560,000

The output vat in the last quarter of 2018 is

A. P12,000
B. P24,000
C. P26,000
D. P0

40. Which of the following is not subject to VAT?

A. Importation of goods in the ordinary course of business
B. Importation of items for personal use
C. Franchise grantees of radio broadcasting whose gross receipt for the preceding year was ₱9, 000,000.
D. VAT-registered person, whose annual gross receipt is less than ₱3,000,000.

41. Which statement is correct? The output value added tax on goods or properties sold:
A. Is based on gross sales and not on net sales
B. Is not imposed on goods exported
C. Is imposed on actual sale only
D. May be due even in the absence of actual sale

42. One of the following statements is wrong. When a donor with several donations during the year falls to
file the donor’s tax return for each the dates that donations were made:
A. Such failure shall be cured by filling a donor’s tax return at the end of the year reflecting all donations
made within the year and paying taxes shown in that one return.
B. Each failure is subject to penalties for non-filling of return and nonpayment of the tax on time.
C. He can voluntarily file late the donor’s tax return for each date the donations were made and make
payments of the tax due shown shown on each return, with penalties
D. If the different donor’s taxes were not paid on the original due dates because of request for extension
seasonably filled with the Commissioner of Internal Revenue, each required payment of tax shall have an
extended period of not more than six months

43. In 2019, Digong made the following donations

•June 1, 2019: To his best friend, Mr. Dugong - ₱1,500,000 on account marriage celebrated on May 1, 2018
•July 10, 2019: To Mr. Barrera, His mentor – a parcel of land worth ₱1,800,000 subject to the condition
that Mr. Barrera would assume mortgage indebtedness of Lester in the amount of ₱400,000.
•September 30, 2019: ₱1,500,00 dowry to his daughter on account of her schedule marriage on December
25, 2019 and another wedding gift worth ₱200,000 on December 31, 2018

How much is the total net taxable gift for the year?
A. ₱4,600,000. C. ₱4,590,000.
B. ₱4,570,000. D. ₱4,350,000.
44. Which of the following constitutes a taxable gift?
A. Creditor’s gratuitous discharge of a debtor’s obligation.
B. One day rent free use of another’s property.
C. A gratuitous transfer by incompetent
D. An agreement to make a future transfer which is not supported by a consideration.

45. Which of the following shall not be subject to vat?

I. MP Promotions vat registered, but gross sales for the year do not exceed ₱3,00,000
II. Mayweather Corporation, a foreign licensor or nonresident lessor who is not vat registered
III. Mailag Company, a domestic corporation required to register under vat system but failed to
register

A. MP Promotions and Mayweather Corporation

B. MP Promotions and Mailag Company
C. All of the above
D. None of the above

46. Which of the following importation is subject to value added tax?

A. Importation for personal use of the importer
B. Importation intended for resale
C. Importation of machinery for the importers factory
D. All of the above

A donor gave the following donations during 2019:

•Jan. 24- Land located in the Philippines valued ₱2,000,000 to her uncle subject to the condition that the
latter will pay the donor’s tax due to unpaid mortgage amounting ₱500,000
•Nov, 30- Building Europe was ₱400,000.

47. The donor’s tax payable on the January 24 donation shall be:
A. ₱0 C. ₱90,000
B. 75,000 D. ₱120,000

48. The donor’s tax payable on the November 30 donation shall be:
A. ₱0 C. ₱248,750
B. ₱11, 250 D.₱345,000

49. Which of the following statements is false?

I. Contracts of donation between husband and wife are void in all cases
II. The Donation by CJ Sereno to Digong in view of his public office is void in all cases
III. Donations between persons guilty of adultery or concubinage are void
IV. Donations to conceived or unborn children are valid
A. I only
B. II And
C. I and II only
D. II, III and IV only

50. Statement 1: Tax credit for the donor’s tax paid to a foreign country allowed only if the donor is a
citizen or resident of the Philippines.
Statement 2: There can be a donor’s tax paid to a foreign country even if the citizen or resident donor had
no donation of property in the Philippines.
a. Both statements are correct
b. Only first statement is correct
c. Both statements is incorrect
d. Only first statement incorrect

51. Statement 1: If the sale involves goods, properties or services some of which are subject to and some of
which are VAT zero-rated or VAT- exempt, the invoice or receipt shall clearly indicate the break-down of
the sales price between its taxable, exempt and zero-rated components, and the calculation of the vat on
each portion of the sale shall be shown on the invoice or receipt.

Statement 2: The seller has the option to issue separate invoices or receipts for the taxable, exempt, and
zero-rated components of the sale.

A. Statements 1 and 2 are false

B. Statement 1 is true but statement 2 is false
C. Statement 1 is false but statement 2 is true
D. Statement 1 and 2 are true

52. Which of the following statements is false?

A. Construction in progress is not depreciated until the asset is placed in service.
B. For purposes of claiming input tax, as a purchase of service, the value of which shall be determined
based on the progress billing.
C. The input tax credit on the labor contracted shall be recognized on the month the payment was made
based on the progress billing.
D. Once the input tax has already been claimed while the construction is still in progress, no additional
input tax can be claimed upon completion of the asset when it has been reclassified as depreciable capital
asset and depreciated.

53. 41. A dealer in securities has the following for the year 2018:
Sales, shares held for sale in the ordinary course ₱5,000,00
Of trade business
Sales, shares held as capital asset 1,500,00
Cost of shares, held for sale in the ordinary course 2,000,000
of trade business
Cost of shares, held as capital asset 500,000
Supplies Expense, net of vat 100,000
Rent expense, net of vat 200,000

How much is the vat payable?

A. ₱470,000 C. ₱270,000
B. ₱324,000 D. vat exempt

54. Persons or firms engaged in the processing of sardines, mackerel and milk, and in manufacturing
refined sugar and cooking oil shall be allowed.
I. Creditable input tax
II. Transitional input tax
III. Presumptive input tax
IV. Refundable input tax
A. I only
B. I and II only
C. I, II, and III only
D. I, II, III and IV
55. Which of the following is the benefit of a vat registered taxpayer if he is subject to zero percent (0%)
vat rate?
A. Exclusion from tax audit by tax examiner
B. Not required to file VAT return whether monthly or quarterly.
C. He does not have any output tax although he may have an input tax credit which can be claimed for
refund.
D. He is entitled to tax discount equivalent to 20%.

A Vat taxpayer had the following data on its operations for the month of January:
Sales, total invoice price P592,480
Purchases of goods, Vat not included:
From Vat registered persons 100,000
From non- vat registered persons 80,000
Purchases of services, Vat not included:
From Vat registered persons 20,000
From non- vat registered persons 8,000
From persons subject to percentage taxes 10,000
Salaries of Employees 60,000
Other operating expenses 12,000

This is the first month of being liable to the value added tax. Data on inventories at the beginning of the
period bought from VAT registered persons follow:
Inventory at cost P44,800
Inventory at net realizable value 49,000
Value added tax paid on beginning inventory 4,800
56. Input taxes are
A. P24,800
B. P20,400
C. P19,200
D. P19,650

57. The value added tax payable is

A. P43,830
B. P44,280
C. P46,680
D. P59,248

58. Input vat on purchases of capital assets shall be spread (amortized over 60 months or useful lives of the
capital assets if shorter than 60 months) when:
A. Capital assets have been acquired from enterprises registered with and located at the export processing
zones
B. Value of asset, excluding VAT, exceeds P1,000,000
C. Aggregate monthly purchases of capital assets, excluding VAT, exceeds P1,000,000
D. VAT taxpayer has secured prior approval for him to amortized input tax on purchases of capital assets

59. Statement 1: The input value-added-tax on purchase of capital goods valued at P1,000,000 shall be
spread over 60 months if the life of property is equivalent to 5 years or more.
Statement 2: The input value-added tax on purchase of capital goods valued at P1,000,000 shall be spread
over the life of property if the life of property is less than 5 years.
A. Statements 1 and 2 are false
B. Statements 1 is true but statement 2 is false
C. Statement 1 is false but statement 2 is true
D. Statement 1 and 2 are true

60. Hananiah Corporation has the following sales and purchases for the quarter ending December 31,
2018:
October Sales ₱50,000
Purchases 40,000
Nov. & Dec. Sales 100,000
Purchases 80,000
Carry-over input tax from previous quarter 6,000

How much is vat payable(carry-over) for the quarter ending December 31, 2018?
a. P5,000 c. (P2,400)
b. P3,500 d. (P5,000)

61. Reciprocity clause is applied to which of the following?

A. Non-resident alien donating real property
B. A donation of tangible property by a non-resident alien
C. When a resident alien donates intangible property
D. A donation by a non-resident alien of intangible property

62. When a property is donated, the basis of the donor’s tax is

A. The cost of acquisition if acquired by purchase or the fair market value at acquisition date, whichever is
higher.
B. The agreed value by the donor and the donee.
C. The fair market value at the time of donation.
D. Any of the above

63. Statement 1: A receivable from a debtor can be a donation only if the creditor notifies the debtor that
he is not collecting anymore and the debtor makes a positive act signifying his acceptance of the
benevolence of the debtor.
Statement 2: A donation inter vivos that had paid the donor’s tax can still be reduced if the legitimates of
the compulsory heirs were reduced, and there would be a resulting refundable donor’s tax.
A. Statements 1 and 2 are false
B. Statement1 is true but statement 2 is false
C. Statement 1 is false but statement 2 is true
D. Statements 1 and 2 are true

64. Which of the following statements is false?

A. The donor’s tax for each calendar year is computed on the basis of the total net gifts made during the
calendar year
B. Gifts in property shall be valued at the fair market value of the property at the date of donation.
C. A gift to the International Rice Research Institute is exempt from gift
D. None of the above

65. On June 1, 2018, Pedro, a resident citizen, donated a parcel of land to a relative in Makati and a real
property located in Canada to a friend. In taking a credit for the foreign donor’s tax paid, the credit shall be
against the Philippines donor’s tax on the
A. Donation to a friend
B. Donation to a relative
C. Donation to the relative and to a friend
D. None of the above.