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A tax on a person's income, emoluments, profits arising from property, practice of profession, conduct of trade or business or on the gross income.
They are usually called “period cost” because they are related to a particular period of time of business operation.
Co-ownership income is not taxable.
Which value should be used as tax base to compute the fringe benefit on the property assigned for the use of employers?
The special deduction from trust is allowed to reduce the income of trust if such trust is administered in foreign country.
Which of the following taxes incurred in the conduct of business is not allowed as deduction from business income?
Sovereign equality dictates that a nation cannot impose taxes on the property of another country.
The fringe benefit tax is the income on income earned by the employee.
A joint venture is taxed like a corporation.
It is a scheme of reducing payment of taxes through legally permissible means.
A government officer considered as tax enforcer by having the power to ascertain the validity of tax laws subject to the review of the Courts of Justice
They provide current and future benefits in business operations.
The grossed-up monetary value is the benefit expense of the employer.
The net income received by a partner of a general co-partnership is subjected to
The absolute exemption allowed to estates and trusts is
An income of a professional entertainer can be reduced by OSD.
Which of the following companies would report release reserved funds as part of gross income in the year of release?
Revenues derived from taxes cannot be used for the exclusive use of private persons.
The liability of the employer is to withhold the corresponding income tax from the fringe benefit earned by the employee.
Income earned outside the Philippines by domestic helpers is tax-exempt because they are corresponded nonresident citizen.
Taxation co-exist with the four elements of the state which includes all, except
All of the following are National taxes as to collecting authority except
Protection is the basic consideration that justifies tax situs.
Professional or talent fees for services rendered by an individual shall be subjected to a creditable withholding value-added tax.
All of the following are not taxes except
One of the following is not creditable against the total computed tax per ITR.
The existence of a Constitution is necessary for the exercise of the inherent powers of the Sovereign State.
In general, bills need not to be signed by the President to become a law.
The income of the trust which is accumulated for future distribution is taxed against the beneficiaries.
Dealings in property refers to the disposal through sale or exchange of ordinary assets or capital assets.
A taxpayer that allowed with both personal exemption and additional exemption is a/an
The monetary value of availed vacation and sick leaves is compensation income.
The income of several irrevocable trusts shall be included in the consolidated income of the grantor to avail of one personal exemptions.
Taxation is the primary source of government revenue. Hence, all government funds come from taxes.
It is an activity intended to make profit
Which of the following statements is not correct?
Distinctions of Income
The deferred payment method adopts the present value of reporting income.
Cash method of reporting income can deduct prepaid expenses in the year of payment.
Interest income from foreign currency deposit of a nonresident Filipino is subjected to final withholding tax of 7.5%.
It represents basic interest of ownership in a corporation. Stockholders holding common shares are called common stockholders.
It must be imposed directly upon the taxpayer.
The amount of income tax withheld by the withholding agent is constituted as a full and final payment of the income tax due from the payee on the said income.
Which of the following is not true?
As a rule, business expenses are deductible only if they are incurred in relation to the business income taxable in the Philippines. If a business expense could not be traced whether incurred within or not, such expense shall be allocated based on the gross income within and without.
Capital Gain refers to the excess of the determined cost over the value received from the sale or exchange of a capital asset.
Tax affects the area or nation as a community rather than as individuals. This is a specific explanation of
Statement 1: The income of the undistributed estate is subject to income tax.
Which of the following characteristics describes our internal revenue laws?
Allowance on his retirement.
Co, ownership which exists in 10 years for more than 10 years, is subjected to tax if less than 720,000php per year.
Which of the following is a party in a joint venture?
Reward for a contest.
Dividend income earned by general commercial partnership is no longer taxable against the partner upon its distribution as share of the partner.
The income of co-ownership that is distributed to the beneficiary is subjected to 10% withholding tax if less than 720,000php per year.
A trustee is the person who establishes a trust.
It is an inter-corporate dividend received by a nonresident foreign corporation from a domestic corporation is subject to 15% final withholding tax provided that foreign law allows taxpayer clause
An allowance paid to a widow or heir out of the corpus of the estate trust is not deductible from gross income.
The co-venture in a tax-exempt joint venture are also exempt from income tax.
Which of the following corporate tax is not yet implemented in the Philippines?
The State can still exercise its taxing powers over its citizen, even if he resides outside the taxing State's territory.
It is a civil penalty imposed by law in addition to the main tax required to be paid dud to delinquency or misrepresentation of taxes.
The additional fringe benefits received by the rank-and-file employees are not subject to final fringe benefit tax rate, but are to be reported in the annual income t ax return.
The share of co-ventures in a taxable joint venture is subjected to a final tax of 10%.
All housing benefits provided by employer to managerial employee are subject to fringe benefit tax.
Which of the following taxes are not allowed as deductions from reportable gross income, except
Passive income is subjected to normal tax only if not subjected to final tax.
Nonresident aliens engaged in Philippines are allowed with personal exemptions and additional exemptions is subjected to reciprocity.
The capital gains on sale of partner's interest is subjected to a final tax of 5% if the amount is 100,000php and 10% in excess of the first 100,000php.
It exists when more than one person acquired the right to own a piece of property or mass of properties. The ownership acquisition by more than one person over a property or properties may be due to succession of an estate or donation.
Tips are taxable.
The benefits from taxation have to be experienced to justify the legitimacy of collection of taxes from the people.
Which of the following amount of winnings/prizes is subjected to final tax of 20%?
Which of the following is entitled to claim NOLCO?
Which of the following is a subject to a creditable withholding tax at source?
The absolute exemption applicable to the income of estate or trusts amounts to
Income accumulated in trust for the benefit of unborn person is not reported income.
A citizen who works abroad most of the time during the taxable year is a nonresident citizen.
If the only source of income of the partner is his share in a general commercial partnership, he is no longer required to file the annual income tax return.
It is a foreign-born person who is not qualified to acquire Philippine citizenship by birth or after birth.
Which of the following co-ownership is subject to income tax?
Domestic and foreign corporations shall be taxed with 2% based on gross income and not on their net taxable income
The tax doctrine of Marshall Dictum explains that tax is a power to destroy.
The following are business taxes except
It paid or payable of 100,000php for any quarter.
In tax capitalization, the buyer absorbs the payment if tax and includes the same as part of the cost of the acquired property.
The power to tax includes the power to destroy because the taxpayer has no option but to pay the tax imposed to him.
The beneficiary of the income of estate has the status of
A senior citizen's income is exempted from all income taxes.
If a taxpayer dies during the taxable year, his estate may claim the personal exemption as if he died at the close of such year.
Statement 1: Both revocable and irrevocable trust are taxable for their income earned.
The income of a trust for the taxable year which is to be distributed to the beneficiaries is returnable and will be taxed to the respective beneficiaries.
All government entities regardless of their functions are exempted from taxes because it would be impractical for the government to be taxing itself.
Which of the following is deductible from related gross income?
The allowances for personal exemptions of a single mother with a dependent child out of wedlock are 50,000php and 25,000php, respectively.
It is a systematic way of collecting taxes at source, an indispensable method of collecting taxes to ensure adequate revenue for the government.
Those who are citizens of the Philippines at the time of the adoption of the 1987 Philippine Constitution.
Tax Administration is a system involving enforcement of taxes through the use of
The business income of a domestic corporation may be subject to any of the following except
Additional remuneration for overtime and separation pay does not include fringe benefits.
Which of the following is subjected to tax?
Which statement is wrong? A revenue bill
De minimisWhich of the following fringe benefit received by a managerial employee is taxable with final income tax?
An individual taxpayer is exempted from filing income tax return if his sole income has been subjected to final withholding tax.
If the taxpayer is an individual, his taxable income shall be computed on the basis of calendar year.
The share of a partner in the general professional partnership is subjected to final withholding tax of 10% if the amount is below 720,000php.
Which of the following nature of laws describes tax laws?
Fringe benefits include only salaries and services or similar benefits given by employer to a managerial employee.
The share of partners from the 700,000 net income of a general professional partnership is subjected to
Fringe Benefits are forms of incentives to managerial employees.
The Philippine tax laws are not political and penal in nature.
These refer to the last day for filing return and payment of tax.
The income of irrevocable trust is taxable in the same manner as the income of the estate.
Where are the sources of Income come from?
This income tax system is a combination of gross compensation income and/or net income from business, trade or profession to arrive at the total income subject to tabular tax rates.
All amounts received from a life insurance annuity are taxable.
Which of the following tax rates behaves in the same direction with the taxable value?
Trust device is usually used to transfer property from one generation to another.
As an option of a resident taxpayer, income taxes paid in foreign countries can be claimed as deduction from gross income or tax credit subject to limit.
He shall be responsible for the withholding and remittance of the right amount of tax needed by deducting and withholding from his employees’ compensation. He is required to collect, account and remit any tax.
It terminates or condenses the taxpayer's period.
Installment of payments.
It is one formed by two or several persons for the sole purpose of exercising their common profession of which no part of income derived from engaging in any trade or business.
A Filipino citizen who stayed outside the Philippines and worked abroad for 183 days during the taxable year is classified as
One of the following is not creditable against the total computed tax per ITR
All of the following are inherent restrictions on the exercise of taxation power, except
The following individual taxpayers are granted basic and additional personal exemption except
Which of the following income is allowed to be reduced with itemized deductions?
Which of the following is not an activity involving tax administration?
Income that is not realized is taxable.
If the casual loss on business property is partial, the deductible loss is the
Below are the legal sources of income. Select three sources of income.
Estates and trusts are treated as separate taxable entities.
The general professional partnerships and joint ventures are not classified as a corporation.
Normal taxes are usually subject to creditable withholding tax.
In case of two or more trusts created by the same person for the same beneficiary, the taxable income of all trusts shall be consolidated and the tax shall be computed based on the consolidated income.
The share of the beneficiary of the income of estates during the taxable year Is subject to a
The 13th month pay and other benefits amounting to P82,000 and below are not taxable.
The net worth method is commonly used in determining the taxable income of taxpayers with complete accounting records.
Which of the following taxes included in the conduct of business is allowed as deduction from business income?
A Filipino citizen classified as special taxpayer is required to be taxed based on his gross compensation income subject to a final tax of 15%.
Each beneficiary must include in his return his distributive share of the net income of the trust.
Taxes collected by the BIR are local taxes.
A trust is a right of property, real or personal, held by one party for the benefit of another.
The trustor (grantor) reserves the power to change at any time any part of the terms of the trust.
For self-employed taxpayers, their quarterly income tax returns are to be reduced with corresponding personal exemption.
Local tax ordinances must be uniformly and equally applied throughout the country.
Which of the following is not included as entertainment, amusement and recreation expenses of a business?
The gains or losses on short sales are capital asset transactions.
This tax assessment is being asked to be cancelled because there is a question as to its validity or legality.
“Any good, service, or other benefit furnished or granted by an employer, in cash or in kind, in addition to basic salaries, to an individual.
Capital assets are not subjected to normal tax.
Real and personal properties not used in trade or business like residential house and lot, car, jewelries, etc are example of capital assets.
There is no need to file a tax return if the income of estates or irrevocable trusts is 20,000php and below.
It is the exhaustion of the natural resources like mines, oil and gas wells due to production.
It is composed of all properties, rights and obligations including those properties, or obligations that have accrued thereto since the opening of the succession the estate is to be transferred from the decent to his successors.
Which of the following is classified as deductible loss?
A corporation cannot enter into a partnership contract, but it can engage in a joint venture.
An increase in the value of property is income.
The exemption allowed to estate or trust is 50,000php.
The gain from the sale or other disposition of property shall be the excess of the amount realized therefrom over the basis or adjusted basis.
A tax evader sidesteps the law, while the tax avoider breaks it.
Which of the following business travel expenses is not subjected to fringe benefit tax?
In ordinary assets, 30% of the net taxable income for individual taxpayers.
No taxable income is realized from the passage of property to the executor or administrator on the death of the descendant.
These represent reductions of resources due to unintended destruction or deprivation of things.
These are procedures or actions available both to the government to collect taxes and to the taxpayer to avoid abuses in the payment of taxes.
A general professional partnership is not required to file its annual income tax return.
It is a sale or disposition of stock or securities where substantially identical securities are acquired or purchased within a 61-day period, beginning 30 days before the sale and ending 30 days after the sale.
Illegal source of income
In general, which of the following incomes is not allowed to be reduced with personal exemption
Individual taxpayers are allowed to elect installment payment of their income taxes when the tax due is 2,000php.
Merchandise inventory is a capital asset.
It is a class of the stock refer to the shares of stock to be issued by the charter or by-laws with respect to dividends and/or assets in case of liquidation over the remainder of the stocks of the corporation which are called common stock.
An alien residing and doing business in the Philippines is allowed to have a tax credit for income taxes paid other country.
Taxes withheld in certain payments are intended to equal or at least approximate the tax due of the payee on said income.
No person shall be imprisoned for nonpayment of income taxes.
Tax exemption is transferable and assignable.
Dependent senior citizen is not entitled for additional exemption of 25,000php.
Which of the following is a taxable fringe benefit?
Reward for an event.
All damage recoveries are not taxable.
Statement 1: The grantor is liable for the income of revocable trust,
A net taxable income of a nonresident alien sole proprietor of a cinematographic film is subjected to a
This refers to the process of taxation to determine the amount of tax based on existing tax law.
A beneficiary of an estate engaged in business has the status of self-employed individual player.
By month.
The tax-exempt joint venture is not required to file an ITR.
It is a partnership wherein part of all of its income is derived from the conduct of trade or business.
It is a business activity that is organized or established only for temporary or short-period of time.
It is defined as a contract whereby two or more persons bind themselves to contribute money, property, or industry to a common fund to engage in profitable activities with the intention of dividing the profits among themselves.
As a rule, excess amount of liquidating dividends over cost of shares surrendered is taxable.
The following incomes are not allowed to deduct business expenses except
It is used frequently to transfer property from one generation to another.
The monetary value of fringe benefit if given in money is:
Which of the following is not within the scope of authority of the BIR Commissioner?
Taxation is the government's legitimate means of interfering with private properties of its subjects.
The personal exemption of a nonresident alien not engaged in business in the Philippines is subjected to reciprocity agreement.
Gross income includes other income from other sources.
It is a legal claim granted to the government to secure the proper payment of the tax, surcharges, interest and costs on all property subject to levy or distraint.
Which of the following interest expense is deductible in full?
If the amount to be distributed to a partner of a general professional partnership is more than 720,000php, it is to be withheld with 15% creditable tax.
It refers to the use of regular domestic income tax rates on corporate taxable income which 30%
A lotto or sweepstakes winnings derived by a resident Filipino citizen within and outside the Philippines are exempted from Philippine income tax.
All partnerships are taxed in the same manner as corporation.
Which of the following will be an appropriate deductible expense for the exhaustion of intangible asset of wasting asset corporation?
The tabular rates of tax prescribed for individuals shall be used in computing the income tax of trusts or estates.
Which of the following remedies against double taxation requires tax treaty?
It is an obligation imposed or a right to administer over a property given to a person for the benefit of another.
The gross receipts of a professional entertainer is subjected to a 10% creditable withholding tax his/her income during the year.
Which of the following income is subjected to a monthly creditable withholding tax?
It is a contract whereby the parties, by reciprocal concessions, avoid litigation or put an end to one already commenced.
The properties left by the decedent transferable to the successors are called
The share of a partner in the income of a commercial partnership is
The portion of income from irrevocable trust that would be distributed during the year is taxable against the
The taxpayer’s income tax is fixed or computed based on the gross income. The usual allowable deductions are completely disregarded in computing this income tax.
The royalty income in pursuit of business received by franchising companies like Jollibee Corporation is subject to
In taxation, it is one's civil liability to pay taxes which gives rise to criminal liability.
Leasehold improvement is recognized.
A CPA certificate is required if the quarterly gross sales, gross receipts or earnings of an individual taxpayer
The creation of trusts may be either expressed or implied.
The taxable of the estates or trusts is to be computed in the same manner as
All of the following are administrative functions of taxation except
These resident foreign corporations are subjected to a 10% final tax on interest income derived from foreign currency loans granted to residents.
Who is the BIR Commissioner?
It paid or payable of 1,000,000php for the preceding taxable year.
A general professional partnership engaged in the practice of profession and trading of goods is subject to
Which of the following is the correct amount of additional personal exemption?
By hour, day, week.
Amount of wealth plus savings and earnings.
The requisites of wash sale must be the sale of stock or securities is at a gain.
Partner's contributions to the partnership are subjected to a final tax of 10%.
It is a system of collecting taxes in accordance with the country’s tax policies.
In installment method, the excess of mortgage assumed over cost of property sold is considered as part of the initial payment.
If the professional or talent fee of an entertainer exceeds 720,000php per year, the creditable withholding tax should be 20%.
The share of partners in the general professional partnership is taxable in the conventional manner of computing the normal income tax of individual.
It is the government agency primarily in charge to assess and collect all taxes and charges imposed.
All of the following taxes are classified as income taxes, except
Which of the following co-ownership is not subjected to tax as a corporation?
Most taxpayers elect to report income in a fiscal year basis.
The fringe benefit tax rate shall be the same with the normal corporate tax rate for income taxes.
Interest on loans granted by the employer to employee are taxable fringe benefit when the interest rate is
Gain from redemption of shares in mutual fund is exempted from income tax.
The distributive share of a partner in a commercial partnership is subjected to final tax of 10%.
Which of the following is required to be filed with quarterly income tax return?
The tax rate on special aliens is 15% of their gross compensation income derived within the Philippines from special employment by multinational corporation.
All BIR approved retirement pays are exempted from income tax.
It is absorption of a corporation by another corporation, the latter retaining its own name and identity and acquiring the assets, liabilities, franchises, and powers of the former, and the absorbed corporation ceasing to exist as a separate juridical person.
The income of general commercial partnership is also subjected to MCIT or Normal Corporate Tax whichever is applicable.
It refers to the disposal through sale or exchange of ordinary assets or capital assets.
As a rule, the original issue by a corporation of its shares of stock at more or less than the par value or stated value shall have no recognition of gain or loss. Hence, it is not subject to capital gains tax.
It is a corporation’s own stock that has been issued and then reacquired but not cancelled.
The fringe benefit tax is the final tax of the employer.
~Hasnewline~In corporation, the capital loss is no holding period and deductible from capital gain only.
Taxation could be described as a power, as a process, or as a means. As a power, taxation is a way of apportioning the cost of government among those who are privileged to enjoy its benefits.
Dividends received by a cooperative from a domestic corporation are tax exempt.
The computation of the net taxable income of the estate is the same manner as individual taxpayer, except that the personal exemption is limited to 20,000php.
Total earnings from whatever source.
It is twenty five percent (25%) surcharge.
All of the following taxes are classified as income taxes, except 20% royalty tax
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