“- Chapter 5 - Final Income Taxation F 6. PCSO winnings are exempt rom all types of income tax. "Je Final Tay ‘i a regular income tax return.on their compensatiy income. — 8. ‘The final tax on interest on tax-free corporate covenant bonds applies only | in the Philippines. poseive, to fle the regular income tax return. upon interest on foreign currency loans, anks under the expanded foreign currency deposit system. Te is not subject to final tax. FE 13, The banks from fellow depositary banks under the expand foreign currency deposit system is subject to 10% final tax, ")s exer PC Tu. PeRleai Sere ROE are subject to 8% final tax on their income fro and controlled corporatio Multiple Choices - Theory 1 1, The final tax rates on pre-termination of long-term deposits are not relevant to i c. resident aliens, % resident citizens. d. non-resident citizens. \iv = on is ae with regard to the final income taxation? . It covers all items of passive income from whatever sources, c. It applies to all items of gross income of any non-resident earned fre sources within the Philippines. d._ Itapplies to passive income earned abroad. 3. en statement is correct regarding final income tax? Items of income subjected to final tax can still be subjected to regular tax. ® within ¢ ilippines. c._ Items of income exempt under final tax are subject to regular tax. d. Final income tax applies to all passive income from Philippines sources. 4. Interest income from which of the following sources is subject to final income ta a, Lending Investment in corporate bonds b. Morgagelans — @Moneymarkerlaemen’s 5. The final tax does not apply to interest on (select the best answer) a. Long-term deposit c. Dey ubstitute b. Trustfunds Qiang noted 160 Scanned with @ camscannerChapter 5 - Final Income Taxation 6. The exemption on final tax on interest from long-term deposit is not applicable to a. Citizens individuals c. Resident corporation or individuals d. All of these 7. Which interest income is not subject to any income tax? a. Interest income from discount notes b. Interest income from bonds issued by a bank [. Interest income from deposit substitute 8. Which of the following is subject to 15% final tax on interest from foreign currency deposits made with Philippine banks? a. Non-resident corporation b. Non-resident citizen ¢. Non-resident alien not engaged in trade or business 9. The following are subject to final tax on all income from sources within the Philippines. Which is the exception? a. Non-resident foreign corporation or business ase None of thes 10. The interest income from lo1 a. subject to 20% final tax. b. exempt from any tax. one of 11. What is the final tax on interest income on 6-year deposit pre-terminated less than 2 years before maturity? ey % om 12. Which of the following recipients is exempt from finaltax.on dividends? a. Resident tzen (Giese oreraton b. Non-resident alien ident alien 13. A dividend declaration in 2019 is subject to a final tax of a 6%. b. 8%. 2 a. exemptfrom any tax. (c.Subject to regular income tax. 14. Dividends declared bya Geto is ‘subject to 20% final tax. ©. subject to 10% final tax. oe 161 Scanned with @ camscannerChapter 5 - Final Income Taxation 15, Between the date of declaration and the date of record, BCD, Inc. sok investment representing stock of ABC, Inc, a domestic corporation. w = ’ if the buyer of the sale i © individual. b, ABC, Inc. shall withhold 10% dividend tax if the buyer of the sale corporation, c, ABC, Inc. shall withhold 10% dividend tax ‘if the seller of the sale | individual, d, ABC, Inc, shall withhold 10% dividend tax if the seller of the sale corporation, Multiple Choices - Theory 2 1, Prizes from sources abroad is subject to final tax ; ifthe amount of prizes exceeds P10,000. b. ifthe amount of prizes does not exceed P10,000. 3 ifitis im to the ay ‘without effort. 2 Which is covered by final tax? a__ Interest income fro1 i P10,000 taxable prizes from the Philippines 4. Share in the net income of a general professional partnership 3. Which is not subject to 20% final tax? Often d. Winnings ’ ’ 4, Which is not subject to 10% final tax? a. Royalties from literary works b. Dividends from a domestic corporation c, Share in the netincome ofa business partnership 6 5. Which of the following is taxable? a. Prize on sports competitions sanctioned by the national sports organizati © ats d. Any prize received without effort 6. Which winning is taxable to a final tax? e a, Winnings exceeding P10,000 Winnings from PCSO lotto b. Winnings not exceeding P10,00 162 Scanned with |\CamScannerChapter 5 - Final Income Taxation 7. The following are subject to final tax, except one. Which Is the exception? ¢. PCSO winnings not exceeding P10K 4 exceeding P10K d.All of these 8, Which of the following Is exempt from final tax? a. Interest income earned by a bank from deposits in another bank bb. Royalties from books G re tls nied DEK lin ate 9. The share In the net income of a business partnership Is subject to which tax if received by a domestic corporation? > a, 10% final tax gular income tax b. 20% final tax [15% capital gains tax 10. Prizes arising from sources within the Philippines may be a, subject to final tax. Sel b, subject to regular tax. c. exempt from ta © ¢ 11, Any royalties earned abroad by a non-resident corporation is fi c._subjectto either final tax or regular tax. d._always subject to regular tax. 12, The winnings ofa resident alien from abroad is a, subject to regular tax. b, subject to final tax. aa 13, Saucoreiee from abroad is a subject to final tax. ¢, subject to either final tax or regular tax. d. not subject to Philippine income tax. 14, Winnings from PCSO are generally GS exntomany an ‘ 7; subject to regular’ ¢ subject to 20% final tax d, subject to both final and regular tax. 163 Scanned with @ camscannerChapter 5 - Final Income Taxation 15. The final tax rates on passive income are generally similar to the follow taxpayers, except one. Select the exception. . a. Domestic corporation _ ¢. Non-resident citizen b. Resident alien @ 16, The tax informer’s reward may be granted to a. Officials of the BIR b. Public officials or employees c. Close relatives of public government employees «: Relatives of overnment employees beyond the 6 degree of consanguinity c 17. Which is not subject to final tax? a. Compensation to non-resident aliens not-engaged in trade or business b. Fringe benefits of supervisory and managerial employees ¢._ Income of non-resident foreign corporations © 18. Which of the following is exempt from final tax? a. Winnings in competitions sponsored by a local trading company Prizes i i petition Winnings from a casino Multiple Choice -Problems1 1.__Certain debt instruments were issued at the following scenario: Instrument L. Treasury notes 14 tL. Investment certificate 20 TL Certificate of deposit 30 Iv. Investment certificate 18 ‘The interest income from which of the foregoing is not subject to final tax? a. LlLllandlV cll and IV b. Lland iV . 2. Winnie, a resident citizen, deposited P2,000,000 in the 180-day time deposi Banco de Oro. The deposit pays 8% interest. Compute the final tax on maturit the deposit. ‘ a. 6,000 P2090 KV - hy b. P8,000 40 x Ue Wik 3, Assume-that Winnie is a non-resident alien not engaged in trade or busi compute the final tax on maturity of the deposit. a. 6,000 + ‘ b. 8,000 P1600 1 Fe K9 Sx Byes 164 = ak Scanned with @ camscannerChapter 5 - Final Income Taxation 4. Renz received P42,000 interest from short-term deposits. Compute the final tax withheld on the interest. a; "PIOs00 P5000 4aK./.to = €2 00 . P9,000 d. P4,500 (471000) 10 ,C00 5. On January 1, 2021, Mr. Albuera invested P2,000,000 in the six-year time deposit of Sulu Unibank which pays 10% annual interest. Compute the final tax to be by Sulu Unibank on December 31,2021. a .P200,000 BY Kee Che earen B. P100,000 .P250,000 feat aig te 6. Assume Mr. Albuera pre-terminated the time deposit on July 1, 2025; compute the final tax to be withheld on pre-termination. a. P5,000 am lot b. 12,000 |. P108, gone Inyo ¥ 42 = ToGKK 7. Boy, aresident citizen, received the following interest income: OK *S7 © P80,000 from short-term Peso time deposit 9 =r £1 X* _P16,000 from a five-year bonds issued by a commercial bank oun er %* _P24,000 from 5/6 lending to market vendors How much final tax must ™G been withheld from Boy’s interest income? 200K y¥4 a PO SOK [es = OOK b. P16,000 d. P24,000 we “10K 8. Jack Corporation, a domestic corporation, deposited P1,000,000 In the five-year time deposit of Banco Pilipino which pays 10% annual interest. Compute Jack Corporation's net interest income in the first year of the deposit. a, P100,000 {ehanaco My IN" = 100K xX, Po=VoK b. 90,000 70, Ne. dRO ke OM 9. Assume Jack Corporation is a non-resident corporation; compute the final tax on interest income. OOK. 456 a. PO «.P25,000 ~ \mx%Io7* 5 b. 20,000 GPs0.000~ 10. On January 2, 2021, Quezon, Inc, placed P1,000,000 in the 5-year time deposit of Bank of Laguna. The placement earns 10% annual interest. Quezon, Inc. pre- terminated the deposit on June 30, 2024. Compute the final tax to be withheld on pre-termination. a. PO pi7so0 INV bole = OK + 42,000 WY Ibrfe X[\2-= SOK BsoK * We 4 teak 165 Scanned with @ camscanner