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Business Taxation

It refers to the taxes that businesses must pay as a normal part of business operations with sole proprietor or a corporation for adhering to tax regulations.

income tax

self-employment tax

employment tax

excise tax

direct taxes and indirect taxes

regressive

proportional

progressive

payroll taxes

property taxes

value-added tax

Which of the following acquisitions or transfers of properties is deemed taxable under estate taxation?

  • The merger of u usufruct in the owner of the naked title
  • Transmission or delivery of the inheritance or legacy by the fiduciary heir or legatee to the fideicommissary
  • All bequests, devises, legacies or transfers to social welfare, cultural and charitable institutions
  • Transmission from the first heir or done in favor of another beneficiary in accordance with the desire of the predecessor

Five Star Finance Company presented the following data for the first quarter of 2016: Dividend income on stock investments Php 23, 250 Interest on lending activities with 3 years maturity Php 286, 000 Rental income on company equipment Php 48, 400 Commission/discounts on financial leasing With 6 years maturity Php 372, 500 Interest income on medium term maturity loan Php 82, 650 What is the percentage tax due?

  • Php 14, 642
  • Php 17, 204. 50
  • Php 18, 367
  • Php 8, 580

Which unpaid taxes are NOT deductible from the gross estate?

  • Estate taxes paid in a foreign country
  • Other taxes accruing before death
  • Property taxes accruing before death
  • Income taxes incurred before death

Complete the statement: A real property which was acquired at Php 150, 000, with a fair market value on the date of the death of the decedent of Php 500, 000 but is still subject to a mortgage of Php 100, 000 shall ___

  • Be included in the gross estate at Php 500, 000
  • Be included in the gross estate at Php 150, 000
  • Be included in the gross estate at Php 400, 000
  • Allow a deduction of Php 250, 000 from the gross estate

Soxy Soriano, a Filipina, passed away in the US with the following properties:

  • All the above properties except the car
  • The properties located in the Philippines except the intangibles
  • Only the properties located in the Philippines
  • All the above properties

Read and analyze the statements: I. In the books of accounts of a VAT-registered taxpayer, purchases are recorded net of input taxes. II. In the books of accounts of a VAT-registered taxpayer, output taxes are included as part of sales.

  • Only statement I is correct.
  • Only statement II is correct.
  • Both statements are true.
  • Both statements are false.

Leslie is an operator of parking lots. What business tax is due on his income from the business?

  • Common carrier's tax
  • Value added tax
  • Broker's tax
  • Caterer's tax

If a 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 purchaser shall:

  • Not entitled to claim an input tax credit on his purchase because there is no passed-on VAT
  • Not entitled to claim an input tax credit on his purchase because there is no passed-on VAT
  • Consider the transaction erroneous and must be disregarded
  • Ask for a refund of the VAT erroneously included in the VAT invoice or VAT official receipt
  • Be entitled to claim an input tax credit on his purchase

When should be the donor's tax due on donations be settled?

  • Sixty days after the last donation in a year
  • Within six months after each donation during the year
  • Two months after each donation during the year
  • Within thirty days after each donation during the year

Which is not replaced by VAT?

  • Compensating tax
  • Contractor's tax
  • Common carrier's tax
  • Sales tax on original sale

Which proceeds of life insurance policies is exempted from estate tax? I. Life insurance on the life of Elizia, appointing her sister as the irrevocable beneficiary. II. Life insurance on the life of Elizia, appointing her brother as the revocable beneficiary. III. Life insurance on the life of Elizia, appointing her executor as the irrevocable beneficiary. IV. Life insurance on the life of Elizia, appointing her children as the beneficiary. The policy does not say as to whether the appointment is revocable or irrevocable.

  • All of them
  • I only
  • I and IV
  • II and III

What theory of taxation states that the estate tax is paid in return for the services rendered by the state in the distribution of the estate of the decedent and for the benefits that accrue to the estate and the heirs?

  • Benefit received theory
  • Redistribution of wealth theory
  • State partnership theory
  • Ability to pay theory

The lease of property, real or personal, by a bank is subject to:

  • None of the choices.
  • 12% VAT.
  • 7% gross receipts tax.
  • 5% gross receipts tax.

What theory of taxation provides that the estate tax being paid is considered as the share of the state in the accumulation of property as a "passive and silent partner"?

  • Benefit received theory
  • Redistribution of wealth theory
  • Ability to pay theory
  • State partnership theory

The BIR Commissioner has the power to suspend the business operations of a taxpayer given certain circumstances. Which is an exception?

  • Failure to issue receipts
  • Understatement of taxable sales or receipts by 30 % or more of his actual taxable sales or receipts for the taxable quarter
  • Failure to file a VAT return as required
  • Failure to add VAT to the total invoice price

Which is subject to donor's tax?

  • Donation inter vivos to El Shaddai
  • Donation inter vivos to International Rice Research Institute
  • Remission of debt where the debtor did not render services in favor of the creditor
  • Cash contribution to a political candidate, duly reported to the Commission on Election

Which is NOT true about medical expenses as allowable deductions from gross estate?

  • The amount of medical expenses shall not be over two hundred thousand pesos (Php 200, 000)
  • Medical expenses should be duly substantiated with receipts
  • The amount of medical expenses shall not be over five hundred thousand pesos (Php 500, 000)
  • Medical expenses should be incurred within one (1) year prior to the decedent's death

For estate tax purposes, the rule of reciprocity applies:I- When the decedent is a non-residents alienII- With respect to intangible personal properties situated in the Philippines

  • Only I is correct
  • Only II is correct
  • Both I and II are correct
  • Neither I nor II are correct

One of the following is not an intangible personal property situated in the Philippines.

  • Shares, obligations or bonds issued by any foreign corporation if such shares, obligations or bonds have acquired business situs in the Philippines
  • Shares obligations or bonds issued by any corporation or sociedad anonima organized or constituted in the Philippines in accordance with its laws
  • Shares, obligations or bonds issued by a non-resident foreign corporation
  • Shares, obligations or bonds issued by any foreign corporation 85% of the business of which is located in the Philippines

Who shall conduct an annual inspection of the books of accounts?

  • A certified public accountant
  • The secretary
  • The treasurer
  • The book keeper

What business tax is due to the income from the business of Wowie who is an operator of parking lots?

  • Caterer's Tax
  • Value added Tax
  • Common carrier's Tax
  • Broker's Tax

Complete the statement: The value added tax on goods sold ___

  • Is based on gross sales and not on net sales
  • Is not imposed on goods exported
  • May be due even if the goods were not actually sold
  • Is a selling expense of the trader

Willy is an operator of parking lots. What business tax is due on his income from the business?

  • Broker’s tax
  • Caterer’s tax
  • Common carrier’s tax
  • Value added tax

Which is NOT a requisite for property previously taxed (vanishing deduction) to be allowed as deduction from gross estate?

  • The property previously taxed should have been received by the current decedent as an inheritance from a prior decedent.
  • The fair market value of the property previously taxed should be included in the decedent's gross estate.
  • No vanishing deduction was previously claimed on the property previously taxed.
  • The property previously taxed should be located in the Philippines.

the common characteristic of transfer taxes is the transfer of property:

  • Is gratuitous
  • Takes effect during the lifetime of the transferor
  • Is onerous
  • Takes effect upon the death of the transferor.

Given the data from the previous number, how much is the net VAT payable (refundable) for the month?

  • (Php 24, 000)
  • (Php 12,000)
  • Php 22, 000
  • Php 12, 000

Mrs. Pulido, a Filipina residing in Malabon died a widow on October 1, 2000, leaving the following properties: A parcel of land in New York Php 1, 000, 000 House and lot (conjugal family home) 600, 000 Claim against an insolvent individual 25, 000 Cash in bank (current account) 50, 000 Proceeds of life insurance with the only daughter as an irrevocable beneficiary 100, 000 Shares of stocks in a foreign corp. based in the US 450, 000 Car in Ireland 125, 000 Total Php 2, 650, 000 The deductions claimed are as follows: Funeral expenses Php 125, 000 Medical expenses 275, 000 Judicial expenses 17, 500 Claims against the estate 36, 250 Claims against an insolvent individual 25, 000 Real property tax for 2001 5, 000 Family home allowance 500, 000 Total Php 983, 750 How much is the total allowable deductions from gross estate?

  • Php 1, 378, 750
  • Php 928, 750
  • Php 1, 428, 750
  • Php 878, 750

Who is subject to estate tax on properties situated within the Philippines only?

  • Resident citizen
  • Nonresident alien
  • Nonresident citizen
  • Resident alien

Rigley, Inc., imported 100 cases of wine from South Africa. The shipment was assessed duties and value-added taxes of P300,000 which Rigley, Inc. immediately paid. The Bureau of Customs did not, however, issue the release papers of the shipment yet since the Food and Drug Administration (FDA) needed to test the suitability of the wine for human consumption. Is the Bureau of Customs at fault for refusing to release the shipment just as yet?

  • No, if the amount paid as duties and value-added taxes due on the importation was insufficient.
  • Yes, the Bureau of Customs is estopped from holding the release of the shipment after receiving the payment.
  • Yes, because the importation was already terminated as a result of the payment of the taxes due.
  • No, because the Bureau of Customs has not yet issued the legal permit for withdrawal pending the FDA's findings.

What is the tax on the interest, commission, discounts and all other items treated as gross income of other non-bank financial intermediaries doing business in the Philippines?

  • 1% on the gross receipts.
  • 5% on the gross receipts.
  • 0% on the gross receipts.
  • 7% on the gross receipts.

Which is a creditable input tax allowed on one who became subject to VAT for the first time?

  • Transitional input tax
  • Excess input tax
  • Presumptive input tax
  • Total input tax

Lisa, the decedent, owns a property amounting to Php 750, 000 at the time of his death. The said property was sold at Php 350, 000 by Lisa during her lifetime to Enrique. Nevertheless, its fair market value was Php 600, 000. It was agreed that the transfer of ownership will be done after Lisa's death. For estate tax purposes, how much should be included in the gross estate of Lisa?

  • Php 400, 000
  • Php 750, 000
  • Php 250, 000
  • Php 600, 000

On which situation does the designation of the beneficiary is considered irrelevant in determining whether or not the proceeds from life insurance should be included as part of the gross estate of the decedent?

  • When the beneficiary is the decedent himself
  • When the designation is revocable
  • When the designation is irrevocable
  • When the beneficiary is a third person

Which is INCORRECT?The judicial expenses that may be claimed as deductions from the gross estate ___

  • Shall be allowed even if the estate is settled extrajudicially
  • Are the entire expenses incurred for the settlement of the estate regardless of time it was incurred by the decedent
  • Includes accountant's fees and payment for the appraiser of the value of the properties
  • Are the expenses incurred for the settlement of the estate, but within the period for filing the estate tax return

In computing the percentage tax on domestic carriers and keepers of garage, which of the following shall be considered correct minimum quarterly gross receipts?

  • Taxis, Manila and other cities - P98, 600
  • Jeepney for hire, Manila and other cities - P65, 700
  • Taxis, provincial - P2,400
  • Jeepney for hire, provincial - P32, 900

Casualty losses are deductible from the gross estate if ___ I. such loss was incurred during the settlement of the estate II. such loss was incurred not later than the last day for the payment of the estate tax

  • Both statements are true.
  • I is false; II is true
  • Both statements are false.
  • I is true; II is false

Using the data from the previous number, and assuming the decedent was a non resident alien, how much will be the deductible funeral expenses?

  • Php 15, 000
  • Php 50, 000
  • Php 62, 500
  • Php 25, 000

What should be done to the certificate or receipts showing payment of taxes issued to a person engaged in a business?

  • Keep in the ledger
  • Return it to the BIR
  • Keep in the portfolio
  • Keep it conspicuously exhibited in plain view in or at the place where the business is conducted

Which constitutes a taxable gift?

  • An agreement to make a future transfer which is not supported by a consideration
  • A gratuitous transfer by an incompetent
  • One day rent-free use of another's property
  • Creditor's gratuitous discharge of a debtor's obligation

Which is NOT subject to excise tax?

  • Fuel
  • Beer
  • Commercial lot
  • Cigarette

Leila D. imported a car from the U.S. for her personal use. The total landed cost is Php 250, 000 including the custom duties of Php 50, 000. How much is the VAT payable?

  • Php 10, 000
  • Php 30, 000
  • Php 25, 000
  • None, because the importation is for personal use

Which sales by VAT-registered person shall NOT be subject to zero percent (0 %) rate?

  • Transfer, use or consumption not in the course of business of goods, properties originally intended for sale or for use in the course of trade or business
  • Effectively zero-rated sales
  • Export sales
  • Foreign currency denominated sales

Peter gave a cash of Php 80, 000 as a birthday gift to his son Edward in 2006. Peter has not given any other gifts or donation for that year but made only a donation to his daughter in the same amount in 2007. With the above information in 2006, Peter is ___

  • Exempted from paying donor's tax
  • Liable to pay donee's tax
  • Exempted from paying donee's tax
  • Liable to pay donor's tax

Which is NOT included in the BIR registration?

  • Taxpayer's name
  • Sanitation permit
  • Place of business
  • Business name

Which has a tax rate of Php 10.00 per metric ton?

  • natural gas
  • coal
  • quarry products
  • liquefied natural gas

Mrs. Santos is a producer of fermented liquors. All taxes on the products and transaction are passed on to buyers in making sales. Which is included in the gross selling price?

  • Value-added tax
  • Documentary stamp tax
  • Percentage tax
  • Excise tax

Liza, an American residing in the Philippines, bought garments from Hanash Corp., a domestic corporation, and exported the same to the US. The total value of export is Php 50, 000. Compute for the VAT (output tax) due?

  • Php 5, 000.00
  • None, because 0 % applies
  • Php 2, 500.00
  • None, because the sale is exempt from VAT

Which transaction by a VAT-registered person does not result to output VAT?

  • Export sales
  • Cash sales
  • Sales and leaseback
  • Sales on account

Which refers to all the properties owned by the wife prior to the marriage, as well as all the properties she acquire during the marriage which the law considers as her exclusive property?

  • Conjugal property
  • Community property
  • Capital property
  • Paraphernal property

Which of the following statements regarding donation of an immovable property is incorrect?

  • None of the choices
  • The acceptance may be made in the same Deed of Donation or in a separate public document, but it shall not take effect unless it is done during the lifetime of the donor.
  • If the acceptance is made in a separate instrument, the donor shall be notified thereof in an authentic form, and this step shall be noted in both instruments
  • The donation must be made in a public document specifying therein the property donated and the value of the charges which the donee must satisfy.

Which is NOT a requisite in order that claims against the decedent's estate may be deductible?

  • They must be existing against the estate.
  • They must be reasonably certain as to amounts.
  • They must be enforced by the claimants.
  • They must have been prescribed.

International carriers doing business in the Philippines is subject to the:

  • 3% percentage tax of their quarterly gross receipts.
  • 0% percent value-added tax on their gross receipts.
  • 3% percentage tax on their actual gross receipts or minimum gross receipts whichever is higher.
  • 12% value-added tax on their gross receipts.

On which documents can the tax identification number be used?

  • All of these
  • Application for mayor's permit
  • Building construction permits
  • Application for loan with banks, financial institutions, or other financial intermediaries

Mr. Yusingco furnished the following records of his horse races in the first quarter of 2012: Horses a. Lucky 7 1st Php 45, 000 b. Skyline 3rd Php 125, 000 c. Pigeon Hole 4th Php 30, 000 d. Paco 2nd Php 87, 500 e. Jurassic 5th None How much is the percentage tax due?

  • Php 27, 850
  • Php 14, 375
  • Php 5, 750
  • Php 28, 750

Which is subject to tax besides estate tax?

  • Transfer in contemplation of death
  • Transfer for insufficient consideration
  • Bona fide sale for an adequate and full consideration in money or money's worth
  • Revocable transfer

Which is a valid donation?

  • Oral donation of a passenger jeepney amounting to Php 150, 000
  • A parcel of land amounting to Php 500, 000 in a private document
  • Oral donation of a mobile phone amounting to Php 4, 500
  • A parcel of land amounting to Php 5, 000 in a private document

Which is NOT exempted from transfer tax?

  • Transmission from the first heir or done in favor of another beneficiary in accordance with the desire of the predecessor
  • Transmission or delivery of the inheritance or legacy by the fiduciary heir or legatee to the fideicommissary
  • The merger of usufruct in the owner of the naked title
  • All bequests, devisees, legacies or transfers to social welfare, cultural, and charitable institutions

Seven Aces Finance Company presented the data for the first quarter of 2017: Interest, commissions, discounts from lending Activities / financial leasing: On short-term maturity Php 47, 500 On long term maturity (over 7 years) Php 107, 500 On medium term maturity Php 87, 500 Rental income on personal properties Php 22, 500 Dividend income Php 12, 500 Other ordinary income under the NIRC Php 180, 000 How much is the total percentage tax due?

  • Php 15, 750
  • Php 9, 000
  • Php 8, 500

What should be the cost basis in computing gain or loss from the sale or other disposition of property acquired as gift or donation?

  • The purchase plus expenses of acquisition
  • The same cost basis as it would be in the hands of the donor
  • The last inventory value
  • The fair market value as of the date of acquisition

One of the following transfers is not included in the gross estate.

  • Transfer in contemplation of death
  • Transfer for adequate and full consideration
  • Transfer with reservation and retention of certain rights
  • Transfer passing under general power of appointment

Which is allowable as deduction from the gross estate of a nonresident, not a citizen of the Philippines decedent?

  • Medical expenses
  • Transfers for public use
  • Family home allowance
  • Standard deduction

How much is the annual registration fee for every place of business or establishment?

  • Php 750
  • Php 500
  • Php 250
  • Php 1,000

The following are motives of a taxpayer that preclude the transfer in contemplation of death except one. What is it?

  • To make dependents financially independent
  • To avoid payment of estate tax
  • To relieve the taxpayer of the burden of management
  • To save income and property taxes

How much is the tax rate for vehicles worth Php 500, 000?

  • Php 112,000+ 40% in excess of Php 500,000
  • Php 12,000 + 20% in excess of Php 500,000
  • 2 %
  • Php 512,000 + 60% in excess of Php 500,000

Mr. Ang, an importer, requests to withdraw its importation from the Bureau of Customs. The imported goods were subjected to a 12 % customs duty in the amount of Php 6, 250 and to other changes amounting to Php 4, 750. How much is the VAT due?

  • Php 6, 682
  • Php 6, 250
  • Php 7, 570
  • Php 7, 350

Which is NOT subject to franchise tax of 2 % or 3 %?

  • Franchise grantees selling gas and water
  • Franchise grantees selling electricity
  • Franchise grantees of radio and/or TV broadcasting whose annual gross receipts of the preceding year is not more than Php 10, 000, 000
  • Franchise grantees of telephone and telegraph services

Which deduction from the gross estate is deductible without amount limitations?

  • Judicial expenses
  • Medical expenses
  • Family home allowance
  • Funeral expenses

Which is NOT true about VAT?

  • VAT is not a part of the gross selling price.
  • VAT on purchases forms part of the cost of inventory.
  • VAT is a tax credit.
  • VAT is not an expense.

Who is considered a stranger under the donor's tax law?

  • A granduncle
  • A nephew
  • A grandchild
  • A step-child

Which is not a requisite of a donation for purposes of the donor's tax?

  • Capacity of the donor
  • Delivery of the subject matter of gift
  • Capacity of the donee
  • Donative intent

Leslie Incorporated, a VAT registered trader had the following data during the last quarter of the year: Purchases Sales October Php 627, 200 Php 392, 000 November Php 599, 200 Php 862, 400 December Php 959, 616 Php 789, 600 All of these are inclusive of VAT. How much is the VAT payable for the month of October?

  • Php 0
  • Php 16, 500
  • Php 2, 000
  • Php 25, 200

Which is not commonly used for estate valuation purposes?

  • Fair market value at the time of death
  • Fair market value at the time of payment of estate tax
  • Pawn value times three in the case of tangible personal property not being sold
  • Book value in the case of investment in shares of stock not traded in the stock exchange

Bread Chat bakeshop sells pastry items to canteens in the National Capital Region. Based on records, the canteens are allowed credit. For April of 2015, the total amounts received or receivable from sales by the shop amounted to Php 110, 000, including the value added tax. 75 % of the sales are usually on account. What is the VAT on the sales amount for the month of April?

  • Php 11, 000
  • Php 8, 250
  • Php 7, 500
  • Php 13, 200

Mr. Arellano pays the occupation tax as an architect. He is also a building contractor. What tax is due on his business?

  • Excise tax-ad valorem
  • Value added tax
  • Excise tax-specific
  • Percentage tax

Which is NOT included in the gross estate of a non-resident alien decedent?

  • Real property located in the Philippines
  • Intangible personal property located in the Philippines but is subject to a reciprocity clause entered into with a foreign country
  • Intangible personal property with a situs in the Philippines not subject to a reciprocity clause
  • Tangible personal property located in the Philippines

Letty is a restaurant owner. What business tax is due on his business?

  • Value added tax
  • Broker's tax
  • Caterer's tax
  • Common carrier's tax

Mr. Lumapas, a VAT-registered individual, furnished the following information for a taxable month, VAT not included: Domestic sale to consumers Php 350, 000 Domestic sale to export traders Php 100, 000 Direct export sale Php 200, 000 Purchases, total invoice cost, From VAT-registered individuals: Of goods Php 330, 000 Of services Php 220, 000 Given the data above, compute for the input taxes.

  • Php 66, 000
  • Php 55, 000
  • Php 65, 000
  • Php 53, 000

Who is in charge of safekeeping of books?

  • Owner
  • Book keeper
  • Secretary
  • Treasurer

880 Corp. is a VAT-registered dealer of appliances. The following details were provided for the final quarter of 2014:

  • Php 35, 250
  • Php 40, 000
  • Php 60, 250
  • Php 79, 250

The following are the amounts of total invoice costs/prices: Mr. A, a non-VAT taxpayer, sells to Mr. B, a VAT taxpayer Php 27, 500 Mr. B, a VAT taxpayer, sells to Mr. C, a VAT taxpayer Php 44, 000 Mr. C, a VAT taxpayer, sells to Mr. D, a VAT taxpayer and an exporter Php 77, 000 Mr. D, a VAT taxpayer, exports Php 137, 500 Compute for the VAT of Mr. C.

  • Payable of Php 3, 300
  • Payable of Php 0
  • Refundable of Php 7, 500
  • Payable of Php 9, 240

Paco imported a car from Japan for his personal use. Total landed cost is Php 125, 000 including custom duties of Php 25, 000. How much is the VAT payable?

  • Php 5, 000
  • Php 2, 500
  • Php 15, 000
  • None, because the importation is for personal use.

Complete the statement:A donation of one hectare of timberland ___

  • Can be done orally in writing
  • Must be in a public document
  • Must be in writing
  • Maybe in a private document

Mr. Lim, an importer, requests to withdraw its importation from the Bureau of Customs. The imported goods were subjected to a 12 % customs duty in the amount of Php 6, 250 and to other changes amounting to Php 4, 750. How much is the VAT due?

  • Php 6, 250
  • Php 6, 682
  • Php 7, 570
  • Php 7, 350

Which should be secured from the BIR to facilitate printing of the official receipts?

  • Authority to print
  • Business permit
  • BIR registration
  • Tax identification number

Which is NOT CORRECT?

  • Export sales by VAT registered persons are not subject to VAT.
  • Export sales by persons who are not VAT-registered are VAT exempt.
  • Amounts received from services performed by a person under an employer-employee relationship are exempt from VAT.
  • Transitional input tax is 2 % of the value of the inventory or the actual VAT paid, whichever is higher.

Which deductions from the gross estate is allowable provided that the amount shall not be over Php 500, 000?

  • Funeral expenses
  • Medical expenses
  • Family home allowance
  • Standard deductions

In January 2011, the BIR issued a ruling that Oliver's vodka imports were not subject to increase excise tax based on his claim that his net retail price was only Php 200 per 750 milliliter bottle. This ruling was applied to his imports for May, June, and July 2011. In September 2011, the BIR revoked its ruling and assessed him for deficiency taxes respecting his May, June, and July 2011 vodka imports because it discovered that his net retail price for the vodka was P250 per bottle from January to September 2011. Does the retroactive application of the revocation violate Oliver's right to due process as a taxpayer?

  • No, because he acted in bad faith when he claimed a lower net retail price than what he actually used.
  • Yes, since the presumption is that the BIR ascertained the facts before it made its ruling.
  • Yes, since he had already acquired a vested right in the favorable BIR ruling
  • No, since he could avail of remedies available for disputing the assessment.

Which deductions from the gross estate is allowable provided that the amount shall not be over Php 1,000,000?

  • Family home allowance
  • Standard deductions
  • Medical expenses
  • Funeral expenses

Which is deductible as claim against the estate?

  • An obligation which shall be paid by the heirs
  • An obligation contracted by the decedent one (1) day before he died
  • An obligation of the decedent which prescribed while the decedent was still alive.
  • An obligation which was not reduced in writing under the Statutes of Fraud

Which deductions from the gross estate is deductible without amount limitations?

  • Funeral expenses
  • Family home allowance
  • Medical expenses
  • Judicial expenses

Jenny, a Korean residing in the Philippines bought clothes from Choi Corporation, a local corporation, and exported the same to Korea. Total value of export is Php 100, 000. How much is the output tax due on the transaction?

  • None because the sale is exempt from VAT
  • Php 10, 000
  • None because 0 % applies
  • Php 5, 000

Which deduction from the gross estate is allowable provided that the amount shall not be over Php 1,000,000?

  • Funeral expenses
  • Family home allowance
  • Medical expenses
  • Standard deductions

Safer Inc., a local insurance company, provided the following data for the second quarter of 2015 as follows: Total insurance premiums due and collectible Php 912, 500 The above premiums consisted of the following: Life and disability insurance premium Php 300, 000 Marine insurance premium Php 212, 500 Health & accident insurance premium Php 250, 000 Property insurance premium Php 150, 000 Collections during the quarter on the above premiums were 65 %, 45 %, 50 %, and 70 % respectively. What is the percentage tax due?

  • Php 6, 250
  • Php 9, 750
  • Php 16,000
  • Php 26, 031

Which is NOT considered a percentage tax?

  • 3 % tax on keepers of garage
  • ½ of 1 % stock transaction tax on shares traded through the local stock exchange
  • 10 % - 20 % stock transaction tax on shares not traded through the local stock exchange

Which is a similarity between donor's and estate taxation?

  • Effectivity of the transfer of property
  • Rates of tax used
  • Amount of exemptions
  • Basis of valuation

What business tax is due on the restaurant business of Mr. Yan?

  • Broker’s tax
  • Caterer’s tax
  • Common carrier’s tax
  • Value added tax

Which is NOT a major class of deduction from the gross estate of a resident decedent?

  • Medical expenses
  • Judicial expenses
  • Vanishing deduction
  • Retirement benefits received by the heirs under RA 4917

What is the explanation for the formula: output taxes - input taxes = value added tax payable?

  • Value-added taxes on purchases exceed the value added taxes on sales.
  • Value-added taxes during a taxable period may not appear in the financial statements.
  • Value-added taxes paid on purchases are inventorial costs.
  • Value-added taxes are deductible from gross income.

Which is not included as part of gross estate for purposes of determining the net estate subject to estate tax?

  • Capital of the surviving spouse
  • Conjugal assets of the spouses
  • Exclusive assets of the decedent
  • Share of decedent in properties jointly owned with a third person

Statement I. The account title, "VAT payable" refers exclusively to the excess of output tax over the input tax.

  • Statements 3 and 4 are correct.
  • Statement 2 is incorrect.
  • Statements 2 and 4 are correct.
  • Statements 1 and 2 are incorrect.

Complete the statement by choosing the appropriate situation. The value of the gross estate of the decedent shall be determined by including the value at the time of his death of all property, real or personal, tangible or intangible, wherever situate: Provided, however, that ___

  • In the case of a resident decedent who at the time of his death was a citizen of the Philippines, only that part of the entire gross estate which is situated in the Philippines shall be included in his taxable estate.
  • In the case of a nonresident decedent who at the time of his death was a citizen of the Philippines, only that part of the entire gross estate which is situated in the Philippines shall be included in his taxable estate.
  • In the case of resident decedent who at the time of his death was not a citizen of the Philippines, only that part of the entire gross estate which is situated in the Philippines shall be included in his taxable estate.
  • In the case of a nonresident decedent who at the time of his death was not a citizen of the Philippines, only that part of the entire gross estate which is situated in the Philippines shall be included in his taxable estate.

An individual becomes subject to the value added tax for the first time can have an input tax out of the inventory of goods, material and supplies on hand at the time he became accountable. What do we call this tax?

  • Value added tax deemed paid
  • Prepaid input tax
  • Presumptive input tax
  • Transitional input tax

Mr. and Mrs. Garcia, citizens and residents of the Philippines, made the following donations: June 5, 2001 To Mario, a legitimate son, on account of marriage, Php 230, 000 To Nieva, a legitimate daughter, property with mortgage of Php 2, 000 which was assumed by Nieva, with fair market value of Php 10, 000. Oct. 7, 2001 To Dennis, a legitimate son of Mrs. Garcia by a prior Marriage, given on account of marriage, Php 40, 000 April 3, 2002 To Our Lady of Fatima Parish, Php 50, 000 To Merle, a family friend, Php 20, 000 How much is the donor’s tax for the October donation ?

  • Php 12, 000
  • Php 2, 160
  • Php 0
  • Php 6, 000

Motivated by love, Mr. D donated a car to his brothers, Mr. E and Mr. F,the naked title to Mr. E and usufruct to Mr. F for one year. Is the transfer of the car, naked title to Mr. E and usufruct to Mr. F a valid donation?

  • No, the donation is not valid because a right (usufruct) cannot be donated
  • Yes the donation is valid provided that Mr. E agrees to the donation of usufruct to Mr. F
  • Yes the transfer of the naked title to E and usufruct to F is a valid donation, provided all the donees are living at the time of donation
  • No, the donation is not valid because it is specifically provided in the Civil Code that such donation is not allowed.

For estate tax purposes, one of the following is not an intangible personal property.

  • Bank deposit
  • Livestock
  • Investment in stock
  • Accounts receivable

Which is NOT necessary for vanishing deductions to be allowed as deductions from the gross estate of a decedent?

  • The property previously taxed must have been identified as the one originally received or one which was received in exchange thereof.
  • The said property must be received by the current decedent within five (5) years before his death.
  • The donor's tax or estate tax on the property previously taxed must have been paid before the death of the current decedent.
  • The said property must be received by the current decedent five (5) years after the death of the prior decedent.

How many days shall be given to corporations, partnerships or persons that retire from business to submit their books of accounts, subsidiary books, and other accounting records to BIR?

  • 15 days
  • 10 days
  • 30 days
  • 5 days

Which of the following is NOT true if a donor is a non-resident, not a citizen of the Philippines?

  • Property located in the Philippines but donated to a done abroad will pay the donor's tax
  • Property outside the Philippines donated on account of marriage to a resident of the Philippines has a deduction of Php 10, 000
  • Property located abroad, but donated to a citizen of the Philippines will not pay the donor's tax
  • Property in the Philippines with a value of Php 150, 000, donated to a citizen of the Philippines, will pay the donor's tax

Who should pay for the excise tax of indigenous petroleum, natural gas or liquefied natural gas for local sale?

  • Third buyer
  • First buyer
  • Second buyer
  • Last buyer

Which of the following is not included in the decedent's gross estate?

  • Transfer in contemplation of death
  • Property passing under special power of appointment
  • Extent of decedent's interest in property
  • Revocable transfer

In default of testamentary heirs, the law determines who are to succeed to the inheritance of the deceased. Which ranks first in the order of succession?

  • Legitimate children
  • Surviving spouse
  • Illegitimate children
  • Legitimate parents

Mr. Lumapas, a VAT-registered individual, furnished the following information for a taxable month, VAT not included: Domestic sale to consumers Php 350, 000 Domestic sale to export traders Php 100, 000 Direct export sale Php 200, 000 Purchases, total invoice cost, From VAT-registered individuals: Of goods Php 330, 000 Of services Php 220, 000 What is the VAT of the sales?

  • Php 550, 000
  • Php 350, 000
  • Php 450, 000
  • Php 650, 000

Which is NOT applicable when a purchase from a VAT-registered person is for use both in the VAT and non-VAT business of the purchaser?

  • Must be allocated between the VAT and non-VAT business at the end of the taxable period.
  • The VAT component of the amount paid for the purchase should be allocated at once and at the time of purchase between the VAT and non-VAT business.
  • The VAT component of the amount paid for the purchase may be debited at the time of purchase to the Purchases account.
  • The VAT component of the amount paid for the purchase may be debited at the time of purchase to the input taxes account.

Fortune Finance Company presented the data for the first quarter of 2017: Interest, commissions, discounts from lending Activities / financial leasing: On short-term maturity Php 47, 500 On long term maturity (over 7 years) Php 107, 500 On medium term maturity Php 87, 500 Rental income on personal properties Php 22, 500 Dividend income Php 12, 500 Other ordinary income under the NIRC Php 180, 000 How much is the total percentage tax due?

  • Php 8, 500
  • Php 15, 750
  • Php 9, 000
  • Php 17, 500

Which is NOT allowable as deduction from the gross estate of a nonresident, not a citizen of the Philippines decedent?

  • Standard deduction
  • Share of surviving spouse in the net conjugal estate
  • Expenses, losses, indebtedness, and taxes
  • Property previously taxed

Which of the following donations inter vivos may not require that it be made in writing?

  • Donation of real (immovable) property, the value of which exceeds P5,000
  • Donation of personal (movable) property, the value of which is P5, 000
  • Donation of personal (movable) property, the value of which exceeds P5,000
  • Donation of real (immovable) property, the value of which is less than P5,000

Who should pay for the excise tax on exported products?

  • First buyer
  • Third buyer
  • The owner
  • Second buyer

Which is exempted from common carrier's tax?

  • Animal-drawn two wheeled vehicles regardless of quarterly gross receipts
  • Cars for rent
  • Auto calesas operated in cities with quarterly gross receipts of not more than Php 2,000
  • Jeepneys operated in the provinces with quarterly gross receipts f no more than Php 2,000

Which refers to a successor to an estate, whether through a last will and testament or not?

  • Legatee
  • Devisee
  • Legacy
  • Heir

Which is a requisite for donation given to qualified children on account of marriage to be deductible?

  • Neither item I nor II
  • Both I and II
  • Only item I
  • Only item II

What tax should Engr. Junio pay as a building contractor?

  • Value-added tax
  • Excise tax
  • Contractor's tax
  • Percentage tax

Which proceeds of life insurance should be included in the taxable gross estate?

  • Insurance proceeds from SSS or GSIS
  • Proceeds of a group insurance taken out by a company for its employees
  • Amount receivable by any beneficiary revocably designated in the insurance policy
  • Amount receivable by any beneficiary irrevocably designated in the policy by the insured

Which is NOT a major business internal revenue tax in the Tax Code?

  • Income tax
  • Percentage tax
  • Excise tax
  • Value added tax

The executor of a married decedent provided the following data about his estate: I. Properties within the Philippines, Php 1, 250, 000 II. Properties outside the Philippines, Php 2, 500, 000 III. Actual funeral expenses in the Philippines, Php 45, 000 IV. Actual funeral expenses outside the Philippines, Php 30, 000 Assuming that the decedent was a citizen or resident of the Philippines, How much is the deductible funeral expenses?

  • Php 45, 000
  • Php 100, 000
  • Php 187, 500
  • Php 75, 000

Which deductions from the gross estate is allowable provided that the amount to be deducted shall be the lowest among the actual, 5 % of the gross estate, or Php 200, 000?

  • Funeral expenses
  • Standard deductions
  • Medical expenses
  • Family home allowance

Which BEST describes a ledger?

  • A book of stockholders
  • A book containing accounts to which debits and credits are posted from books of original entry
  • A book of debits only
  • A book of credits only

Which properties or transfers are not exempt from estate tax under a special law?

  • The transmission or delivery of the inheritance or legacy by the fiduciary heir or legatee to the fideicommissary
  • The merger of the usufruct in the owner of the naked title
  • The transmission from the first heir, legatee, or done in favor of another beneficiary in accordance with the desire of the predecessor
  • Grants and donations to the Intramuros administration

Which is an exemption to the authority to suspend by the Commissioner of Internal Revenue?

  • Understatement of taxable sales or receipts by 30 % or more of his correct taxable sales or receipts for the taxable quarter
  • Failure to add VAT to the total invoice price
  • Failure to issue receipts or invoices
  • Failure to file a VAT return

Which is NOT a justification for donation made by a stockholder to a corporation which is subject to a donor's tax?

  • Benefit received principle
  • Entity theory
  • Lifeblood theory
  • Tax benefit rule

In the case of life insurance proceeds in which the designated beneficiary is a third person, which is relevant in determining whether or not such proceeds should be included as part of the gross estate?

  • Amount of the proceeds
  • Civil status of the decedent
  • Designation of the beneficiary
  • Age of the beneficiary

Lifeline, a domestic insurance corporation, posted the following data for the third quarter of 2000:

  • Php 16, 000
  • Php 6, 250
  • Php 26, 031
  • Php 9, 750

ABC Financing, Corp. gathered these data on the third quarter of 2014 as follow: Dividend income from various stock investments, Php 29, 800. Only 85 % of such income was received by the company. Rental income on personal property of the corp., Php 72, 500. Only 65 % on said income was collected by the company. Interest, discounts and commissions earned: Short term maturity Php 317, 500 Medium term maturity Php 248, 350 Long term maturity (over 7 years) Php 197, 950 Long term maturity ( not over 7 years) Php 292, 700 Only the following percentage based on the above amounts were collected respectively: 75 %, 65 %, 40 % & 60 %. Other gross income earned and collected Php 97, 500 What is the percentage tax due (rounded off)?

  • Php 25, 000
  • Php 27, 500
  • Php 22, 138
  • Php 27, 013

When is the tax on overseas dispatch, message or conversation originating from the Philippines paid?

  • Five (5) days after the end of the quarter
  • Twenty (20) days after the end of the quarter
  • Twenty (20) days after the end of the month
  • Thirty (30) days after the end of the month

First Statement: Donor's tax shall be levied, assessed, collected and paid upon the transfer of property by any person, resident or non-resident, as a gift.

  • True, True
  • False, False
  • True, False
  • False, True

Banks and non-bank financial intermediaries performing quasi-banking functions are subject to:

  • Amusement tax.
  • Franchise tax.
  • Gross receipts tax.
  • Value-added tax.

Which is NOT a requisite for casualty losses to be allowed as deduction from gross estate?

  • Fully compensated for by insurance and claimed as deduction in the decedent's income tax return
  • Must be arising from fire, storms, shipwreck or other casualties or from robbery, theft or embezzlement
  • Must be incurred during the settlement of the estate but not later than the last day as required by the law for the payment of estate tax due
  • Not fully compensated for by insurance and not claimed as deduction in the decedent's income tax return

A property which is firmly fixed, settled or fastened is called:

  • Intangible property
  • Tangible personal property
  • None of the choices
  • Real or immovable property

Who are mandated to keep a journal or ledger of accounts?

  • All of these
  • Corporations
  • Partnerships or persons required by law to pay internal revenue taxes
  • Companies

Complete the statement:Books and records shall be subject to examination and inspection by internal revenue officers; Provided, that for income tax purposes, such examination and inspection shall be made only once in a taxable year, except when ___

  • The taxpayer requests reinvestigation
  • There is a need for verification of compliance with withholding tax laws and regulations
  • There is fraud, irregularity or mistakes, as determined by the Commissioner
  • All of these

Which is subject to excise tax?

  • Gasoline
  • Inherited house
  • Donations for the church
  • Real property

What should be the amount included in the gross estate if transfer of property is done for insufficient and inadequate consideration in money or money's worth?

  • The amount of consideration received
  • The excess of the consideration received over the fair market value of the property transferred
  • The excess of the fair market value of the property transferred over the amount of consideration received
  • The fair market value of the property transferred

Which receipts from the following entities are subject to VAT?

  • Brokers
  • Operators of hotels and motels
  • All of the given choices
  • Bookstores

What should an invoice contain in order for it tax?

  • Neither I nor II
  • Only II
  • Only I
  • Both I and II

Which is/are TRUE? I. An individual subject to execise tax is also subject to value-added tax. II. An individual subject to value-added tax is also subject to percentage tax.

  • I only
  • II only
  • I and II
  • Both statements are incorrect

Which properties or transfers are NOT exempted from estate tax under a special law?

  • The transmission from the first heir, legatee, or done in favor of another beneficiary in accordance with the desire of the predecessor
  • The merger of the usufruct in the owner of the naked title
  • The transmission or delivery of the inheritance or legacy by the fiduciary heir or legatee to the fideicommissary
  • Grants and donations to the Intramuros administration

Which allowable deduction is fixed in amount?

  • Medical expenses
  • Funeral expenses
  • Family home allowance
  • Standard deductions

Which is NOT exempted from the excise tax?

  • Petroleum products sold to international carriers of Philippine or foreign registry on their use or consumption outside the Philippines
  • Petroleum products from exempt entities or agencies covered by tax treaties, conventions and other international agreements for their use or consumption
  • Petroleum products from entities which are by law exempt from direct and indirect taxes
  • None of these

Which CANNOT be found in the books of a VAT taxpayer?

  • Output taxes
  • Input taxes
  • Excess input tax carry-over
  • VAT payable

Which is NOT included in an official receipt?

  • The date of transaction
  • None of these
  • Unit cost
  • Quantity

When should donor's tax be filed?

  • 25 days after giving the gift
  • 6 months after the gift from the date of gift
  • 30 days after the gift has been made
  • 30 days after the end of every quarter

Complete the statement:A tax minimization scheme which is done by spreading the gift over numerous calendar years to avail of lower tax liability ___

  • Donation of life insurance
  • Spread-out method
  • Void donation
  • Splitting of gift

Which is NOT considered as export sale under the Tax Code?

  • Sale of gold to the Bangko Sentral ng Pilipinas
  • Sale to diplomatic missions and other agencies and/or instrumentalities granted tax immunities of locally manufactured, assembled, or repacked products whether paid in foreign currency or not
  • Sale of packaging materials to an export-oriented enterprise whose export sales is over 70 % of the total annual production
  • Sale by Board of Investment (BOI)-registered export producer to an export trader not actually exported by the latter

Which is NOT included as transactions considered "in the course of trade or business" subject to the business taxes?

  • Regular conduct or pursuit of a commercial or an economic activity by a non-stock, non-profit private organization
  • Regular conduct or pursuit of a commercial or an economic activity by a stock private organization
  • Isolated services in the Philippines by non-resident foreign individuals
  • Isolated sale services of goods or services for a gross selling price or receipts of Php 800, 000

Mr. Lumapas, a VAT-registered individual, furnished the following information for a taxable month, VAT not included: Domestic sale to consumers Php 350, 000 Domestic sale to export traders Php 100, 000 Direct export sale Php 200, 000 Purchases, total invoice cost, From VAT-registered individuals: Of goods Php 330, 000 Of services Php 220, 000 Given the data above, find the output taxes

  • Php 35, 000
  • Php 65, 000
  • Php 54, 000

Which transaction by a VAT-registered taxpayer is not subject to VAT?

  • Foreign currency denominated sales
  • Export sales
  • Transaction deemed sale
  • Sale of services rendered in foreign countries

What is the amount of funeral expenses that may be deducted from gross estate?

  • 5 % of the gross estate or actual funeral expenses, whichever is lower
  • Actual funeral expenses incurred
  • Always 5 % of the gross estate
  • 5 % of the gross estate or actual funeral expenses incurred whichever is higher

Mr. Wurtzbach, a resident alien, died leaving the following net estate: Location of Net Estate Fair Market Value Foreign Estate Tax Paid Philippines Php 500, 000 _________________ Japan 3, 000, 000 500, 000 Korea 1, 500, 000 230, 000 Total Php 5, 000, 000 730, 000 How much is the allowable tax credit and the Philippine estate tax due (before tax credit)?

  • Php 730, 000 and Php 607, 500
  • Php 693, 500 and Php 772, 500
  • Php 546, 750 and Php 607, 500
  • Php 730, 000 and Php 772, 500

Tony and Fely bakeshop sells pastry items to hotel cafes in the National Capital Region. Based on records, the hotels are allowed credit. For May of 2015, the total amounts received or receivable from sales by the shop amounted to Php 110, 000, including the value added tax. 75 % of the sales are usually on account. What is the VAT on the sales amount for the month of May?

  • Php 11, 000
  • Php 8, 250
  • Php 7, 500
  • Php 13, 200

Which is an example of excise tax?

  • Real property
  • Income
  • Transfer
  • Sales

Below is the data of selected accounts of a taxpayer, with VAT and non-VAT business. No inventories were done at the start and end of the taxable period. Purchases, all from VAT suppliers, Exclusive of VAT Php 750, 000 Sales, exclusive of any tax: Exports, VAT business 850, 000 Exports, non-VAT business 600, 000 Domestic sales, VAT business 200, 000 Domestics sales, non-VAT business 250, 000 How much is the net VAT payable (refundable) for the month?

  • (Php 12,000)
  • Php 12, 000
  • Php 22, 000
  • (Php 24, 000)

Mr. Cinco furnished the following records of his horse races in the first quarter of 2012: Horses a. Lucky 7 1st Php 45, 000 b. Skyline 3rd Php 125, 000 c. Pigeon Hole 4th Php 30, 000 d. Paco 2nd Php 87, 500 e. Jurassic 5th None How much is the percentage tax due?

  • Php 27, 850
  • Php 14, 375
  • Php 28, 750
  • Php 5, 750

Which is not a taxable transfer following the tax code?

  • Property passing under general power of appointment
  • Transfers for sufficient and adequate consideration
  • Transfers subject to revocation
  • Transfers for insufficient consideration

What is the maximum tax rate for diesel and gasoline?

  • 25 %
  • 100 %
  • 75 %
  • 50 %

Which proceeds of life insurance policy is NOT included as part of the gross estate?

  • Proceeds of life insurance receivable by the executor of the decedent's estate, who is irrevocably designated by the decedent
  • Proceeds of life insurance receivable by the heirs under a group insurance policy taken out by the employer of the decedent
  • Proceeds of life insurance receivable by the estate of the deceased which is designated as beneficiary subject to revocation
  • Proceeds of life insurance payable to an heir who is designated subject to revocation by the decedent

How much is the inspection fee for cigarettes?

  • Php 0.03 per kilogram or fraction thereof
  • Php 0.50 per thousand pieces or fraction thereof
  • Php 0.02 per kilogram or fraction thereof
  • Php 0.10 per thousand sticks or fraction thereof

Which refers to the tax on the right of the deceased individual to transmit his estate to his lawful heirs and beneficiaries?

  • Donor’s tax
  • Estate tax
  • Income tax
  • Property tax

When should an individual subject to any internal revenue register with the appropriate Revenue District Officer?

  • A day after the business has commenced
  • A week after the business has commenced
  • Before the business commence
  • The day of the commencement of business

Alex Pambid, an unmarried Filipino decedent, had the following data on the date of his death in 2001: I. Real property (excluding the family home) Php 1, 000, 000 II. House & lot (family home) 400, 000 III. Other properties 800, 000 IV. Charges and obligations on the estate 375, 000 (excluding the family home allowance & standard deductions) How much is the taxable net estate?

  • Php 700, 000
  • Php 1, 325, 000
  • Php 825, 000
  • Php 925, 000

What business tax is due on the restaurant business of Mr. Laudico?

  • Common carrier's tax
  • Broker's tax
  • Caterer's tax
  • Value added tax

Which is NOT included as part of the gross estate to be allowed as deduction there from?

  • Family home allowance
  • Claim against insolvent persons
  • Property previously taxed
  • Claim against the estate

Which is NOT VAT-Exempted?

  • Export sales by individuals who are VAT- registered
  • Services of agricultural contract growers and milling for others of palay into rice, corn into grits and sugar cane into raw sugar
  • Sales by agricultural cooperatives duly registered with Cooperative Development Authority to their members as well as sale of their produce, whether in its original state or processed form, to non-members.
  • Sale of nonfood agricultural products in their original state

Mrs. Lizardo owns a restaurant. What business tax is due on her income from the business?

  • Caterer's tax
  • Common carrier's tax
  • Value-added tax
  • Broker's tax

What should an invoice contain in order for it tax? I. The VAT registration numberII. The total amount which the purchaser pays or obliged to pay to the seller

  • Only I
  • Both I and II
  • Only II
  • Neither I nor II

All persons liable to VAT such as manufacturers, wholesalers, service providers, among others, shall be required to submit summary lists of purchases if their quarterly purchases:

  • Answer not given.
  • Exceed P1,000,000
  • Amount to P1,000,000 or less
  • Regardless of the amount of quarterly purchases

One of the following statements is incorrect.

  • The overseas communications tax is imposed whether the overseas communications are made in the course of trade or business or not.
  • Overseas communications tax is imposed on overseas communications origination from the Philippines.
  • The person liable to overseas communications tax may or may not be engaged in any trade or business.
  • The overseas communications tax is imposed on the owner of the communications facilities used to make overseas as communications.

If the decedent was a nonresident alien (with reciprocity), how much is the gross estate?

  • Php 250, 000
  • Php 1, 862, 500
  • Php 487, 500
  • Php 0

What should be the basis of the data in the Account Information Form?

  • Profit and loss statements
  • Schedules listing income-producing properties
  • Certified balance sheets
  • All of these

Mr. Abad is a dealer of locally manufactured wines and liquors. What tax is due on his sales?

  • Excise tax-ad valorem
  • Percentage tax
  • Excise tax-specific
  • Value added tax

In January 2011, the BIR issued a ruling that Oliver's vodka imports were not subject to increased excise tax based on his claim that his net retail price was only Php 200 per 750 milliliter bottle. This ruling was applied to his imports for May, June, and July 2011. In September 2011, the BIR revoked its ruling and assessed him for deficiency taxes respecting his May, June and July 2011 vodka imports because it discovered that his net retail price for the vodka was P250 per bottle from January to September 2011. Does the retroactive application of the revocation violate Oliver's right to due process as a taxpayer?

  • No, since he could avail of remedies available for disputing the assessment.
  • Yes, since the presumption is that the BIR ascertained the facts before it made its ruling.
  • No, because he acted in bad faith when he claimed a lower net retail price than what he actually used.
  • Yes, since he had already acquired a vested right in the favorable BIR ruling

If transfer in contemplation of death, revocable transfer or property passing under general power of appointment is made, created, exercised or relinquished for consideration in money or money's worth, but there is no bona fide sale for an adequate and full consideration in money or money's worth, the gross estate will include:

  • Fair market value or the assessed value of such property, at the time of death, whichever is higher
  • Excess of the fair market value of the property at the time of death over the value of the consideration received therefor
  • Historical cost of such property at the time acquired
  • Fair market value such property at the time of transfer

A VAT-registered individual, Mr. Agonias, posted the following information for a taxable month, VAT not included: Domestic sale to consumers Php 350, 000 Domestic sale to export traders Php 100, 000 Direct export sale Php 200, 000 Purchases, total invoice cost, From VAT-registered individuals: Of goods Php 330, 000 Of services Php 220, 000 What is the VAT of the sales?

  • Php 650, 000
  • Php 550, 000
  • Php 450, 000
  • Php 350, 000

The following are the amounts of total invoice costs/prices: Mr. A, a non-VAT taxpayer, sells to Mr. B, a VAT taxpayer Php 27, 500 Mr. B, a VAT taxpayer, sells to Mr. C, a VAT taxpayer Php 44, 000 Mr. C, a VAT taxpayer, sells to Mr. D, a VAT taxpayer and an exporter Php 77, 000 Mr. D, a VAT taxpayer, exports Php 137, 500 Find the VAT of Mr. C.

  • Refundable of Php 7, 500
  • Payable of Php 3, 300
  • Payable of Php 9, 240
  • Payable of Php 0

Which is NOT true? [2]

  • Export sales by VAT registered individuals are subject to VAT.
  • Transitional input tax is 5 % of the value of the inventory or actual VAT paid whichever is higher.
  • Export sales by individuals who are not VAT registered are exempted from VAT.
  • Amounts received from services rendered by individuals under an employer-employee relationship are exempted from VAT.

On which factor is estate taxation similar to donor's taxation?

  • Time of filing tax returns
  • Extension of payment of tax
  • Time of payment of tax
  • Maximum amount exempted from tax

Global Link Communication, Inc. has gathered the following data for the last quarter of 2015:

  • Php 14, 250
  • Php 65, 750
  • Php 142, 500
  • Php 80, 000

Read and analyze the statements.

  • False, true
  • True, true
  • False, false
  • True, false

Which is NOT necessary for claims against the decedent's estate to be allowed as deduction from the gross estate?

  • They must be existing against the estate
  • They were contracted in good faith for an adequate and full consideration in money or money's worth
  • They were already condoned or have prescribed
  • They must be reasonably certain in amount

Which of the statement/s is/are correct? I. The estate tax accrues at the moment of death of the decedent. II. In estate taxation, the taxpayer is the decedent.

  • Both I and II are incorrect
  • Statement I only
  • Statement II only
  • Both I and II are correct

Which is an appropriate distinction between donor's and estate tax?

  • Notice of donation is not required in donor's tax while notice of death is required in estate tax.
  • A CPA certificate may be required in some instances for donor's tax; a CPA certificate is not needed for estate tax.
  • Filing of donor's tax return is within three (3) months from date of donation while estate tax return may be filed within six (6) months from date of death.
  • Donor's tax has a higher progressive rate than estate tax.

Which refers to ad valorem tax?

  • The excise tax which is based on selling price or other specified value of the goods/articles
  • An act to purify especially by repeated or fractional distillation
  • The excise tax imposed which is based on weight or volume capacity or any other physical unit of measurement
  • The price at which the distilled spirit is sold on retail in ten (10) major supermarkets in Metro Manila

Which of the following shall also be considered as personal property?I- Obligations and actions which have for their object movables or demandable sumsII- Shares of stock of agricultural, commercial and industrial entities, although they may have real estate

  • Both I and II
  • I only
  • II only
  • Neither I nor II

Unfortune Insurance Corp. provided the data for the final quarter of 2013 as follows:

  • Php 72, 656. 50
  • Php 29, 062. 50
  • Php 23, 407. 50
  • Php 43, 594

Wowa died leaving the following properties: I. Stocks of Leslie Corp. (2,000 shares) – listed in the Phisex (highest-Php 40; lowest-Php 39) II. Common stocks of Pesto Corp. (1,500 shares) – not listed in the stock exchange. Cost-Php 50 per share; book value – Php 45 per share. III. Car (cost-Php 600, 000; book value – Php 350, 000; market value – Php 400, 000). IV. Real properties (zonal value – Php 120, 000; assessed value – Php 72, 000) How much is the gross estate?

  • Php 666, 500
  • Php 624, 000
  • Php 618, 500
  • Php 867, 500

Below is the data of selected accounts of a taxpayer, with VAT and non-VAT business. No inventories were done at the start and end of the taxable period. Purchases, all from VAT suppliers, Exclusive of VAT Php 750, 000 Sales, exclusive of any tax: Exports, VAT business 850, 000 Exports, non-VAT business 600, 000 Domestic sales, VAT business 200, 000 Domestics sales, non-VAT business 250, 000 How much is VAT payable on domestic sales?

  • Php 53, 000
  • Php 27, 000
  • Php 0
  • Php 14, 400

Which of the following judicial expenses is not deductible?

  • Expenses on the anniversary of the death of the deceased
  • Compensation of the executor or administrator of the estate
  • Attorney's or legal fees
  • Court expenses for the settlement of the estate, whether testamentary or intestate

Which is NOT taxable?

  • A and B are the only heirs of C. A renounces his share.
  • On June 12, 2006, A made a gift of Php 200, 000 to his daughter on account of her marriage celebrated May 1, 2005.
  • Mr. Ramos, a multi-millionaire, gives his wife a diamond ring worth Php 120, 000 as a birthday gift.
  • A Filipino citizen donated a parcel of land located in the US to B, a nonresident alien.

Which transfer of property is exempt from estate tax under the tax code?

  • Benefits received by members from the GSIS and the SSS by reason of death
  • Amounts received from the Philippines and the United States governments for damages suffered during the war
  • Benefits received by beneficiaries residing in the Philippines under laws administered by the U.S. Veterans Administration
  • The transmission from the first heir, legatee, or done in favor of another beneficiary in accordance with the desire of the predecessor

Which is NOT exempted from the registration fee?

  • Individuals earning purely compensation income
  • Business establishment
  • Cooperatives
  • Overseas workers

Mr. Linao donated the following properties:

  • Php 215, 000
  • Php 225, 000
  • Php 230, 000
  • Php 250, 000

L and M are married couple. J and K are their legitimate children. N is L's illegitimate child. L died and left a total estate of P 6M. How is his estate going to be divided?

  • M- Php 1.125M J- Php 2.25M K- Php 2.25M N- Php 1.125M
  • M- Php 1.5M J- Php 2.25M K- Php 2.25M N- None
  • M- None J- Php 3M K- Php 3M N- None
  • M- Php 1.5M J- Php 1.5M K- Php 1.5M N- Php 1.5M

Don Bodgie, a Filipino decedent, left the following properties: I. Car, Manila -- Php 275, 000 II. House and lot, Manila – Php 3, 500, 000 III. Shares of stocks, Chicago, USA – Php 125, 000 IV. Accounts receivable, insolvent debtor – Php 100, 000 V. Accounts receivable, with situs in the USA – Php 150, 000 VI. Amount received by heirs from decedent’s employer under R.A. 4917 – Php 200, 000 What is the taxable gross estate?

  • Php 3, 900, 000
  • Php 4, 150, 000
  • Php 4, 250, 000
  • Php 4, 350, 000

Which transfer of property is exempted from estate tax under the tax code?

  • Benefits received by members from the GSIS and the SSS by reason of death
  • Benefits received by beneficiaries residing in the Philippines under laws administered by the U.S. Veterans Administration
  • The transmission from the first heir, legatee, or done in favor of another beneficiary in accordance with the desire of the predecessor
  • Amounts received from the Philippines and the United States governments for damages suffered during the war

Which is not a difference between estate tax and donor’s tax?

  • The exemption granted in the tax table
  • The tax imposed is an excise tax
  • Extension for payment
  • Effectivity of the transfer of property

Which is TRUE about excise tax?

  • Goods may be subject to both VAT and excise tax
  • Goods subject to VAT are exempted from excise tax
  • Lots are subject to excise tax
  • All products are subject to excise tax

How much is the tax rate for diesel from 1801 to 2300 liters?

  • 35 %
  • 30%
  • 20 %
  • 15 %

When are the proceeds of life insurance not payable to estate, executor, or administrator excluded in the gross estate? If the beneficiary appointed in the policy is ___

  • Revocable
  • Irrevocable
  • The executor
  • Revocable or irrevocable

Which is a funeral expense that is NOT deductible?

  • Cost of tombstone
  • Funeral services paid out of a decedent's estate
  • Cost of coffin assumed by a family friend
  • Mourning clothing of deceased's unmarried minor children and surviving spouse

Malia, an agent of a foreign insurance firm, provided the following data for the final quarter of 2015: Total receipts of non-life insurance premiums Php 225, 000 Insurance premiums receipts (included above) Deemed exempted from the percentage tax Php 12, 500 Rental income on business assets Php 7, 500 Compute for the percentage tax due.

  • Php 10, 625
  • Php 6, 375
  • Php 11, 250
  • Php 6, 750

Which is NOT true?

  • Estate tax is more of a revenue tax rather than that of a special tax.
  • If the decedent died September 5, 2006 but the actual transfer of the possession of the property to the heirs took place on June 5, 2010, the estate tax will be computed based on the prevailing law on September 5, 2006.
  • Under the Benefit-Received Theory in estate taxation, the state is a partner of the decedent in the distribution of the latter’s estate.
  • An essentially mortis causa transfer which has been filed as inter vivos shall be subject to donor’s tax.

Kelvin, a non-VAT taxpayer, bought goods amounting to Php 5, 600.00, VAT inclusive, from Vincent, a VAT registered seller. The passed on VAT of Php 560.00 on the purchases is ___

  • Ignored
  • A tax credit
  • An expense
  • Part of the cost of purchases

How much is the tax rate for gasoline from 2001 up to 2700 liters?

  • 50 %
  • 25 %
  • 30 %
  • 70 %

Orange Corporation is registered under the laws of the US Teritorry. It has extensive operations in Southeast Asia. In the Philippines, its products are imported and sold at a mark-up by its exclusive distributor, Lam's Trading, Inc. The BIR compiled a record of all the imports of Lam from Orange and imposed a tax on Orange net income derived from its exports to Kim. Is the BIR correct?

  • No. Orange is a non-resident foreign corporation not engaged in trade or business in the Philippines.
  • Yes. Orange is a non-resident foreign corporation engaged in trade or business in the Philippines.
  • Yes. Orange is doing business in the Philippines through its exclusive distributor Lam's Trading. Inc
  • No. The tax should have been computed on the basis of gross revenues and not net income.

Which is NOT a requisite for claims against the estate to be deductible from the gross estate?

  • They were conducted in good faith.
  • They must be existing against the estate.
  • They must be reasonably certain in amount.
  • They must be contracted within three (3) years before the death of the decedent.

Which is not included, partly or completely, in the gross estate for the purposes of determining the net estate subject to estate tax?

  • Proceeds of life insurance policy receivable by an heir whose designation as beneficiary is irrevocable
  • Claim against insolvent persons
  • Unpaid mortgage on decedent's estate
  • Decedent's interests in property

The administrator of the estate of a decedent who is unmarried has presented the following data which may or may not be relevant in the determination of the net estate subject to tax: Gross estate ( appropriately determined) Php 2, 500, 000 Medical expenses 175, 000 Funeral expenses (actual) 300, 000 Judicial expenses 25, 000 Casualty losses 50, 000 Claims against insolvent individuals 75, 000 Income tax incurred by the estate 62, 500 Transfers for public use 100, 000 Estate tax paid in a foreign country 40, 000 Unpaid mortgage on a property included 87, 500 in the above gross estate How much should be the funeral expenses to be deducted from the gross estate?

  • Php 200, 000
  • Php 50, 000
  • Php 150, 000
  • Php 125, 000
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