Tax Rev Prelim Examination

TAX REV PRELIM EXAMINATION
Due Mar 8 at 9pm Points 98 Questions 98

Available Mar 8 at 6pm - Mar 8 at 9pm about 3 hours Time Limit 180 Minutes
This quiz was locked Mar 8 at 9pm.
A empt History
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Submitted Mar 8 at 8pm
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Question 1 1 / 1 pts
Under the TRAIN Law, there shall be levied, collected and paid for each
taxable year upon the income received by every alien individual
employed by regional or area headquarters and regional operating
headquarters established in the Philippines by multinational companies
from such region or area headquarters and regional operating
headquarters, a tax equal to:
Twenty five percent (25%) of such gross income
Twenty percent (20%) of such gross income
Correct!
Regular income tax rate under Section 24 (A) (2) (a) of the 1997 Tax
Code, as amended
Fifteen percent (15%) of such gross income

Starting 2018, individuals with gross income from business or practice

of profession, may deduct the following:
I Optional standard deduction
II Itemized deduction
III Personal exemptions
IV Additional exemptions
V Premium payment on health and hospitalization insurance
I, II, III and IV only
Correct! I or II only
I, II, III, IV and V only
III, IV, IV and either I or II only
Which statement is wrong? “The tax should be based on the taxpayer’s

ability to pay”.
As a theory of taxation, this is called “ability-to pay-theory”
A graduated tax table is in consonance with this rule.

As a basic principle of taxation, this is called “theoretical
justice;”
Correct!
No person shall be imprisoned for non-payment of a tax;
ABC Corporation, a regional operating headquarters of a multinational

company, provided the following benefits to its employees as follows:
Personnel
Benefit provided
Amount
Receptionist
Membership fees in athletic clubs
PhP 60,000
IT specialist1
Expense account for grocery supplies
50,000
Finance Senior Specialist I2

Reimbursements for household personnel
(e.g., maid and driver)
70,000
Chief Financial Officer3

Fleet of vehicles owned by ABC Corporation
(the relevant values are as follows:
Cost - PhP 5,000,000
Fair Market Value (FMV) per BIR – 4,500,000
FMV per Assessor’s Office – 3,000,000)
Chief Executive Officer4
Payment of rental of residential dwelling
400,000
1
Only required to render menial/recurring tasks without
recommendatory powers for management action
2
Required to review the work of new hires but does not have the power
to promote the new hire to higher position
3
Has the power to promote and terminate all employees under the
Finance Department
4
The top executive is an expatriate or a special alien holding technical
position
Assuming that the above transactions transpired in CY 2017, how much

is the total fringe benefits provided to employees subject to fringe
benefit tax?
P5,080,000
P3,580,000
P5,580,000
Correct! P5,400,000
A resident citizen rank-and-file private employee has two (2) qualified

dependent children at the beginning of 2018. He also supports his
father-in-law who is a person with disability (PWD) and his uncle who is
a senior citizen.
Salary, net of P73,443 withholding tax and mandatory deductions of

P14,776
P 511,781
13th month pay

50,000
14th month pay

50,000
Rice subsidy (P2,500 x 12 months)

30,000
Uniform and clothing allowance

7,000
Monetized unused vacation leave credits (12 days)

28,800
Actual medical benefits

15,000
Christmas gifts
10,000
Laundry allowance (P400 x 12)

4,800
Employee achievement award (amount of cash given)

10,000
Benefits received by virtue of a collective bargaining agreement (CBA) and

productivity incentive schemes
11,000
The amount of total excess de minimis benefits and other benefits

subject to withholding tax on compensation
P11,000
P60,000
P44,000
Correct! P54,000
Which of the following statement/s is/are false?
Statement I: The optional standard deduction is an amount equal to

forty percent (40%) of the gross income from business or practice of
profession of the taxpayer.
Statement II: The optional standard deduction is not available against

compensation income arising out of an employer-employee
relationship
Statement III: The election of optional standard deduction is irrevocable

for the taxable year for which the choice is made.
Statement IV: Unless the taxpayer signifies in his return his intention he
shall be considered as having availed of the itemized deductions.
II, III and IV only

III only
I, II and III only
Correct! I only
Statement 1: Direct double taxation is prohibited by the Philippine

Constitution;
Statement 2: Indirect double taxation is allowed by the Philippine

Constitution.
Both statements are true;
The first statement is true while the second statement is false;
Correct!
The first statement is false while the second statement is true;
Both statements are false.
A decedent died on March 15, 2018. He left a gross estate of P20,000.

One of the heirs inquired from a CPA whether or not a notice of death is
required to be filed. What was the reply of the CPA?
There is no need to file a notice of death because the value of the gross estate
did not exceed P20,000.
Filing of notice of death would be discretionary on the part of the heirs or the
beneficiaries.
Correct! Filing of notice of death is no longer needed.
There is a need to file notice of death because somebody died.
Which of the following statements is correct?
1 An individual citizens of the Philippines who is working and deriving

income from abroad as an overseas contract worker is taxable on
income from sources within and without the Philippines.
11 A seaman who is a citizen of the Philippines and who receives

compensation for services rendered abroad as a member of the
complement of vessel engaged exclusively in international trade shall
be treated as a resident citizen.
111 A non- resident citizen who is not engaged in business in the

Philippines is treated as non-resident alien who is not engaged in
business in the Philippines
1V An alien individual, whether a resident or not of the Philippines, is

taxable only on income derived from sources in the Philippines
1 and 111 only
1 and 1V only
I, II, III only
Correct! 1V only
Which of the following statements is not correct?
Correct!
The prohibition of delegation by the state of the power of
taxation will still allow the Bureau of Internal Revenue to modify
the rules on time for filing of returns and payment of taxes;
The power of taxation is shared by the legislative and executive

departments of government.
An inherent limitation of taxation may be disregarded by the

application of a constitutional limitation;
The property of an educational institution operated by a

religious order is exempt from property tax, but its income is
subject to income tax;
In case of conflict between tax laws and generally accepted accounting

principles (GAAP):
Both tax laws and GAAP shall be enforced;

Correct! Tax laws shall prevail over GAAP;
GAAP shall prevail over tax laws;
The issues shall be resolved by the courts
The following line items of the proposed bill which later signed by
President Rodrigo Duterte into law known as “Tax Reform for
Acceleration and Inclusion” (TRAIn Law) were vetoed, except for?
1 Reduced income tax rate of employees of Regional Headquarters

(RHQs), Regional Operating Headquarters (ROHQs), Offshore Banking
Units (OBUs) and Petroleum Service Contractors and Subcontractors
11 Zero-rating of sales of goods and services to separate customs

territory and tourism enterprise zones
111 Exemption from percentage tax of gross sales/receipts not

exceeding five hundred thousand pesos (PhP 500,000.00)
1VExemption of various petroleum products from excise tax when used

as input, feedstock, or as raw material in the manufacturing of
petrochemical products, or in the refining of petroleum products, or as
replacement fuel for natural gas fired combined cycle power plants
V Earmarking of incremental tobacco taxes
11,111,IV and V only
1,11, and 111 only
Correct! I, II, III, IV and V only

1, 11,111 and 1V only
Edgard Abraham “Pogi” Cruz held shares of stock as investment. In

2018, he sold the shares he bought for PhP 143,445 thru the local stock
exchange for PhP 345,989. He incurred PhP 27,632 selling expenses in
connection with this sale. How much is the total leviable capital gains
tax on the sale, if any?
P17,491
P12,491
Correct! P0
P5,254
Which of the following is not an example of excise tax:
Transfer tax;
Income tax
Sales Tax;
Correct! Real property tax

The basic community tax of P5. 00 of an individual is as to who bears

the burden:
An ad valorem tax.
A personal tax;
A national tax;
Correct! A direct tax;
Ms. Sarah Luhvaty , married to Ritsard Rama, resident citizen with two
qualified dependent children, has the following data for 2018:
Salaries, net of P50,000 withholding tax P200,000
Tuition of children 10,000
Apartment rental 24,000
Household expenses 60,000
Health and hospitalization insurance premium paid 3,400
How much is the net taxable compensation income?

P200,000
Correct! P250,000
P47,600
P147,600
Mr. Kiko Dagreat, a “successfully” married resident citizen, has the

following dependents in the current year:
Aida, child, 25 years old, person with disability, dies during the year
Bella, senior citizen
Carlos, child, 18 years old who gains employment in the previous year
Dennis, child, 16 years old, not living with the taxpayer because of his
studies
Edna, foster child under foster care of six months during the year
Fatima, foster child under foster care for the whole year
George, 15 years old, legally adopted child
Moreover, the following pertains to income earned and expenses

incurred by Mr. Kiko for the year:
Employment
Annual basic compensation, net of P20,000 withholding tax
P 230,000
SSS premium contributions
6,000
Philhealth contributions
7,000
Pag-ibig constributions
2,000
Union dues
7,000
Health insurance premium paments (P500 per month)
5,000
13th month pay
21,000
Business
Gross local sales goods
P 1,000,000
Sales returns and allowances
50,000
Cost of sales
300,000
Share in the net income of business partnership, net of 10% withholding tax
90,000
Interest income from peso deposit accounts in banks, net of 20% withholding
tax
80,000
Salaries of employees, net of P30,000 creditable withholding tax
270,000
Value added tax
100,000
Business permit and licenses
5,000
Community tax
10,000
Interest paid on business loan which has already prescribed
20,000
Contributions to pension trust (P20,000 covers past year’s cost)
50,000
Entertainment expenses
10,000
Interest expense
50,000
Purchase of equipment (estimated life is 5 years)
50,000
Fringe benefits expenses
68,000
Fringe benefits tax expenses
32,000
Additional information/assumptions
Mr. Kiko waived the additional exemption in favor of his wife
Mr. Kiko incurred rent expense on his apartment house amounting to

PhP 50,000
Mr. Kiko’s business is VAT-registered as evidenced by an existing

certificate of registration (COR) with the Bureau of Internal Revenue
(BIR)
Mr. Kiko’s customers withhold one-percent (1%) withholding tax on
their purchase of goods
Interest expense amounting to PhP 50,000 includes already the

settlement of the interest on loans which already prescribed
Contributions to the pension trust amounting to PhP 50,000 equals the

deductible normal costs per funding requirement report
The pension trust is not yet registered with the BIR
Assuming the above items are for the CY 2017, how much is the total
personal exemptions that can be claimed by Mr. Kiko?
P75,000
P125,000
Correct! Answer not given
P100,000
Which is not a creditable withholding tax?
Expanded withholding tax
Withholding tax on compensation
Correct! Withholding tax on passive income
Withholding tax at source

An alien employee of an offshore banking unit (OBU) has the following

income for the current year:
Salary received from the OBU

P 10,000,000
Honoraria and allowances received from the OBU

5,000,000
Interest income from a domestic bank on his peso deposits (gross of

applicable withholding tax)
50,000
Capital gains from sale of shares in a domestic corporation (not traded thru
the local stock exchange)
100,000
Assuming the transactions transpired in CY 2017, how much is the total

final withholding tax due to be remitted by the alien individual to the
BIR?
P2,272,500
P2,250,000
orrect Answer Answer not given.
You Answered P0
Which of the following statements is not correct?
Taxes may be imposed to raise revenues or to provide

disincentives to certain activities within the state;
Correct!
The provisions of taxation in the Philippine Constitution are
grants of power and not limitations on taxing powers.
The state can have the power of taxation even if the

Constitution does not expressly give it the power to tax;
For the exercise of the power of taxation, the state can tax
anything at any time;
The following documents shall be secured from certain professional

individuals before a withholding agent can make use of the five-percent
(5%) expanded withholding tax (EWT) under Revenue Regulations (RR)
No. 11-18:
I Certificate of registration with the relevant professional body who

given the professional the license to practice
II Sworn declaration that his/her gross receipts/sales did not exceed

PhP 3,000,000 not later than 15 of each year or at least prior to the
initial payment of fees
III Sworn declaration that his/her gross receipts/sales did not exceed
PhP 720,000 not later than 15 of each year or at least prior to the initial
payment of fees
IV Certificate of registration with the Bureau of Internal Revenue (BIR)
IV only
Correct! I and IV only
I, II, III and IV only
I and II only
Tax of a fixed proportion of the value of the property with respect to

which the tax is assessed and requires the intervention of assessors or
appraisers to estimate the value of such property before the amount
due from each taxpayer can be determined is known as:
Answer not given.
Correct! Ad valorem;
Specific;
Special or regulatory;
As a basic principle of taxation, that “Taxes must be bases on the
taxpayer’s ability to pay” is called:
Correct! Theoretical justice;
Equality in taxation;
Equity in taxation.
Ability-to-pay” theory;
Which of the following statements is false regarding the application of

8% income tax rate?
A taxpayer who availed of the 8% income tax rate option is not required to
attach financial statement in filing the final income tax return. However,
existing rules and regulations on bookkeeping shall still apply.
A taxpayer who signifies the intention to avail of the 8% income tax rate
option, and is conclusively qualified for said option shall compute the final
annual income tax due based on actual annual gross sales/receipts and other
non-operating income.
The option to be taxes at 8% income tax rate is not available to a VAT-

registered taxpayer, regardless of the amount of gross sales/receipts.
Correct!
A taxpayer may be subject to the graduated income tax rates even if the flat
8% income tax rate option is initially selected, when the taxpayer’s gross
sales/receipts and other non-operating income exceeded the VAT threshold
during the taxable year.
Value-added tax is an example of:
Progressive tax;
Graduated tax;
Correct! Proportional tax.
Regressive tax;
No person shall be imprisoned for non-payment of this:
None of the above.
Correct! Poll tax;
Property tax;
Excise tax;
The decedent is a married man with a surviving spouse, died on

February 14, 2018. The estate presented the following data:
Conjugal real and personal properties P 14,000,000
Exclusive family home 30,000,000
Conjugal ordinary deductions 2,000,000
How much is the taxable net estate?
Correct!
P 21,000,000
Answer not given
P42,000,000
P 32,000,000
Congress enacted a law increasing the personal exemptions of

individuals under the income tax law to a uniform P50, 000 for all
individuals, regardless of status of the individuals. The law took effect
sometime within the year. The Secretary of Finance will allow the
increase on personal exemption to a date:
Only when Congress passes a law clearly stating the effectivity

of the increase.
Correct!
As of the beginning of the year in which the law was passed by
Congress;
As at the beginning of the succeeding year;

On the effectivity of the law within the year;
Which of the following is not a requirement to qualify and avail of the

8% income tax rate option under the TRAIN law?
Taxpayers registered and subject only to percentage tax under Section 111 of
the 1997 Tax Code, as amended
Individuals (single proprietor or professional or mixed income earner) earning

from self-employment and/or practice of profession
Correct!
Taxpayers whose gross income/receipts and other non-operating income did
not exceed the P3,000,000 VAT threshold during the taxable year
Taxpayers exempt from VAT or other percentage taxes
Mr. John Lloyd, married to Helen Hadarna, resident citizen with two
qualified dependent children, has the following data for 2018:
Salaries, net of P50,000 withholding tax P200,000
Tuition of children 10,000
Apartment rental 24,000

Household expenses 60,000
Health and hospitalization insurance premium paid 3,400
How much is the optional standard deduction (OSD)?
P80,000
P25,000
Correct!
None of the choices
P100,000
Which statement gives the correct answer? That a feasibility study

needs or need not look into the taxes of different political subdivisions
of government which may be alternative sites of the business is
because:
Businesses that are subject to national business taxes are

exempt from local business taxes;
Local business taxes may be credited against national

business taxes.
Provinces, cities and municipalities must have uniform taxes

between and among themselves;
Correct!
The local taxes of one political subdivision need not be uniform
with the local taxes of another political subdivision;
One of the characteristics of tax is that:
It is generally based on contract;
Correct!
It is generally payable in money;
Answer not given.
It is generally assignable;
Which is not an essential characteristic of tax?
It is regular payment.
Correct!
It is unlimited as to amount;
It is payable in money;
It is proportionate in character;
a senior citizen.

P14,776
P 511,781
13th month pay

50,000
14th month pay

50,000

30,000

7,000

28,800

15,000
Christmas gifts
10,000

4,800

10,000
11,000
The amount of total compensation and other benefits subject to

withholding tax on compensation
660,000
645,224
565,781
Correct!
Answer not given.
Which of the following is not an element of direct double taxation?
Correct!
Same amount.
Same subject matter;
Same year;
Two taxes;
Under this basic principle of a sound tax system, the Government
should not incur a deficit:
Correct!
Fiscal adequacy;
Theoretical justice;
None of the above.
Administrative feasibility;

studies

Employment
P 230,000

6,000
7,000
2,000
Union dues
7,000
5,000
13th month pay

21,000
Business

P 1,000,000
50,000
Cost of sales
300,000
90,000
tax
80,000
270,000
Value added tax

100,000

5,000
Community tax
10,000
20,000
50,000
10,000
Interest expense
50,000

50,000

68,000

32,000

PhP 50,000

(BIR)



taxable net income of Mr. Kiko using the itemized deduction?
Correct!
P484,250
P384,250
P414,250
P424,250
Are the following statements true or false?
Statement I: The fringe benefit tax shall be treated as a final income

tax on the employee which shall be withheld and paid by the employer
on a calendar quarterly basis as provided under the Tax Code.
Statement II: The grossed-up monetary value of the fringe benefit

represents the whole amount of income realized by the employee which
includes the net amount of money or monetary value of property which
has been received plus the amount of fringe benefit tax thereon
otherwise due from the employee but paid by the employer for and in
behalf of his employee.
Correct!
True; True
False; True
True; False
False; false
Statement 1: The power of Tax can be delegated to units of local
government, but with limitations as may be imposed by law.
Statement 2: The power to tax cannot be delegated to the executive

department of the National Government.
Correct!
Both statements are false;
There can be no tax unless there is a law imposing the tax is consistent
with the doctrine or principle of:
Correct!
Non-delegation of the power to tax;
The power of taxation is very broad and the only limitation is

the sense of responsibility of the members of the legislature to
their constituents.
Due process of law;
Uniformity of taxation;
Ruth is employed in FJR Corporation and is also a part-time real estate

agent for a real estate brokerage firm. In addition to the statutory
minimum wage (SMW) amounting to P180,000 she received from FJR,
she also earned P75,000 as commission from her real estate dealings in
2018.
How much is the income tax due if she is under the graduated income
tax regime?
None of the choices
P6,000
P20,400
Correct!
Zero
Which of the following GOCCs, agencies or instrumentalities shall pay

such rate of tax upon their taxable income as are imposed upon
corporations or associations engaged in similar business, industry or
activity?
Correct!
Philippine Charity Sweepstakes Office (PCSO) on bingo operations the
proceeds of which are donated to the National Government
Social Security System (SSS) on rental income

Government Services Insurance System (GSIS) on its sale of precious arts
collections
None of the choices

studies

Employment
P 230,000

6,000
7,000
2,000
Union dues
7,000
5,000
13th month pay

21,000
Business

P 1,000,000

50,000
Cost of sales
300,000
90,000
tax
80,000
270,000
Value added tax

100,000

5,000
Community tax
10,000
20,000
50,000
10,000
Interest expense
50,000

50,000

68,000
32,000

PhP 50,000

(BIR)



income tax due under 8% income tax option?
P80,000
P76,000
Correct!
Answer not given.
P87,200
Some franchise holders who are paying the franchise tax are being
required by an amendatory law to pay the value-added tax, while others
remain subject to the franchise tax. Which of the following
constitutional provisions make the law unconstitutional?
The rule on taxation shall be uniform;
Correct!
None of the above.
No person shall be deprived of property without due process of

law;
No law shall be passed impairing the obligation of contracts;
A tax on business is:
Correct!
Indirect tax
Direct tax;
none of the above.
Property tax;
Statement 1: The value-added tax is a property tax;
Statement 2: The estate tax is a direct tax.
Correct!
The first statement is wrong while the second statement is
correct.
The two statement are wrong;
The two statements are correct;
The first statement is correct while the second statement is

wrong;
Statement 1: Tax evasion, which is the use of means to escape a tax

that is already a liability, is prohibited by law, and is punishable;
Statement 2: Tax avoidance, which is the use of means to prevent an

accrual of a tax, or to minimize a tax that may accrue, is likewise
prohibited by law and is punishable.

Correct!
A tax must be imposed for a public purpose. Which of the following not
a public purpose?
Improvement of the sugar industry;
National defense;
Public Education;
Correct!
None of the above.
Ruth is employed in FJR Corporation and is also a part-time real estate

agent for a real estate brokerage firm. In addition to the statutory
minimum wage (SMW) amounting to P180,000 she received from FJR,
she also earned P75,000 as commission from her real estate dealings in
2018.
How much is the income tax due if she is under the 8% income tax
regime?
Correct!
P6,000
None of the choices
P20,400
Zero
The following stream of income is exempt from income tax if received

by a minimum wage earner:
I Statutory minimum wage
II Holiday pay
III Overtime pay
IV Night shift differential pay
V Hazard pay
I only
I, II and III only
Correct!
I, II, III, IV and V only
III only
The city of Manila, claiming that it can impose taxes under the Local
Government Code, imposed a tax on banks (in addition to the
percentage tax on banks imposed in the National Internal Revenue
Code). The banks within the City of Manila objected for the various
reasons given below.
Which would justify the objection of the banks?
The rule on double taxation;
Correct! None of the above.
Uniformity in taxation;
The power of taxation cannot be delegated;
One of the characteristics of internal revenue laws is that they are:
Political in nature;
Criminal in nature;
Penal in nature;
Correct! Generally prospective in application.
Salary received from the OBU P 10,000,000
5,000,000

applicable withholding tax) 50,000
the local stock exchange) 100,000

gross income of the alien employee to be considered for purposes of
applying the preferential tax rate of 15%?
P15,000,000
P10,150,000
Correct! P0
P10,050,000
Statement 1: Because the power of taxation is inherent in state, the

inherent limitation on the power
of taxation always applies.

Statement 2: Inherent limitations on the power of taxation must give
way to constitutional limitations.
Correct!

studies

Employment
P 230,000

6,000
7,000
2,000
Union dues
7,000
5,000
13th month pay

21,000
Business

P 1,000,000

50,000
Cost of sales
300,000
90,000
tax
80,000
270,000
Value added tax

100,000

5,000
Community tax
10,000
20,000
50,000
10,000
Interest expense
50,000

50,000
68,000

32,000

PhP 50,000

(BIR)



taxable net income of Mr. Kiko using the itemized deduction?
Correct! P484,250
P414,250
P384,250
P414,250
Under the TRAIN law, how much is the allowable standard deduction for
a non-resident alien decedent?
P5,000,000
P2,500,000
P3,000,000
Correct! Correct answer not given
Which of the following has no power of taxation?
Cities;
Correct! Barrios.
Barangays;
Provinces;

Personnel
Benefit provided
Amount
Receptionist
PhP 60,000
IT specialist1
50,000

70,000

Cost - PhP 5,000,000

400,000
1
2 Requiredto review the work of new hires but does not have the power
3 Has the power to promote and terminate all employees under the
Finance Department
4
The top executive is an expatriate or a special alien holding technical
position

is the total fringe benefit tax due to be remitted by the employer to the
BIR (round-off the answer to the nearest peso)?
P2,625,883
P2,541,176
P2,437,647
Correct! P2,423,529

a senior citizen.

P14,776
P 511,781
13th month pay
50,000
14th month pay

50,000

30,000

7,000

28,800

15,000
Christmas gifts
10,000

4,800

10,000

11,000
The amount of total tax-limit that can be utilized for excess de minimis
benefits after consideration of 13th month pay and other benefits
Correct! Answer not give.

P100,000
P 32,000
P40,000


P 10,000,000

5,000,000

50,000
100,000

final withholding tax due to be remitted by the alien individual’s
employer to the BIR?
P15,000
P1,265,000
Correct! P2,250,000
P0
Are the following statements true or false?
Statement I: Gross receipts, for income tax purposes, refer to the total
amount of money or its equivalent representing the contract price,
compensation, service fee, rental or royalty, including the amount
charged for materials supplied with the services and deposits and
advance payments actually or constructively received during the
taxable period for the services performed or to be performed for
another person, except returnable security deposits.
Statement II: Gross sales subject to the 8% income tax rate option shall
refer to the total sales transactions, net of VAT, if applicable, reported
during the period, without any other deduction.
False; True
False; False
True; True
Correct! True; False

Which statement is true?
A prohibition on imposition of any and all local taxes on the

corporation
Correct!
A prohibition on imposition of property taxes on the
corporation;
A prohibition on imposition of excise taxes on the corporation;
Which statement is wrong?
A toil is a demand of ownership;
Correct! A special assessment is a tax;
A tax is a demand of sovereignty;
Customs duty is a tax;
The distinction of a tax from permit or license fee is that a tax is:
Correct!
One in which there is generally no limit on the amount that may
be imposed;
Answer not given.
Imposed for regulation;
One which involves an exercise of police power;
In all, except one, there can be a classification of the subject matter

being required to shoulder the burden. Which is the exception?
Tax;
Toll;
License fee;
Correct!
Eminent domain;

a senior citizen.
P14,776
P 511,781
13th month pay
50,000
14th month pay
50,000
30,000
7,000
28,800
15,000
Christmas gifts
10,000
4,800
10,000

11,000
Based on the foregoing, determine the following:
The amount of total non-taxable 13th month pay and other benefits
ceiling
P82,000
P30,000
Correct! P90,000
P100,000
Which of the following is not a scheme of shifting the incidence of

taxation?
The manufacture transfers the tax to the consumer by adding

the tax to the selling price of the goods sold;
Correct!
Changing the terms of the sale like FOB shipping point in the
Philippines to FOB destination abroad, so that the title passes
abroad instead of in the Philippines;
The purchaser asks for a discount or refuse to buy at regular

prices unless it is reduced by the amount equal to the tax he
will pay;
The manufacturer transfers the sales tax to the distributor, then

in turn to the wholesaler, in turn to the retailer and finally to the
consumer.
Which of the following may not raise money for the government?
Power of taxation;
Police power;
Correct! Eminent domain;
None of the above.
The amount required is dictated by the needs of the government in:

None of the above.
Toll;
Correct! Tax
License fee;
Which statement is correct? A revenue regulation, as a source of tax

law, is:
Correct!
Promulgated by the Department of Finance upon the
recommendation of the Bureau of Internal Revenue;
Promulgated by the bureau of Internal Revenue;
An interpretation of the revenue law by the Bureau of the

Internal Revenue.
Promulgated by the Department of Finance;
Which statement is false?

A tax is a demand of sovereignty while toil is a demand of
property ownership.
Customs duty is a tax.
Non-payment of a tax does not make the activity taxed

unlawful;
Correct!
A grant of police power to a unit of local government carries
with it a grant of the power to tax.
Tax as distinguished from license fee:
A regulatory measure;
Imposed in the exercise of police power;
Limited to cover cost of regulation.
Correct!
Non- payment does not necessarily render the business illegal;
That the legislative body can impose a tax at any amount underscores
the legal truism that:
orrect Answer Taxation is a very broad power of the state;
You Answered Taxation is essentially a legislative power;
None of the above.
Taxation is an inherent power of the state;
Which statement refers to police power as distinguished from taxation?
The amount imposed has no limit.
It can only be imposed on specific property or properties;
It involves the taking of property by the government;
Correct!
The amount imposed depends on whether the activity is useful
or not;
PTS; 1
The optional standard deduction for individuals is

10% of the gross income
10% of the gross sales/receipts
Correct!
40% of the gross sales/receipts
40% of the gross income
Under the TRAIN law, when is the time for filing of the estate tax return?
Correct!
Correct answer not given
30 days from the decedent’s death
1 year from the beneficiaries’ death
1 year from the 1st night of the mourning period
The power of taxation is inherent in sovereignty being essential to the

existence of every government. Hence, even if not mentioned in the
Constitution the state can still exercise the power.
It is essentially a legislative function. Even in the absence of any

constitutional provision, taxation power fails to Congress as part of the
general power of law making.
True, False.
Correct! True, True;
False, false;
False, True
Statement 1: Direct double taxation involves two taxes by the same

taxing authority (e.g. National Government);
Statement 2: Indirect double taxation involves two taxes by two

different taxing authorities (e.g., National Government and a unit of
local government).
Correct! Both statements are true;


P 10,000,000

5,000,000

50,000
100,000

gross income of the alien employee to be considered for purposes of
applying the preferential tax rate of 15%?
P10,100,000
P10,150,000
Correct! P15,000,000
P10,050,000

studies

Employment
P 230,000

6,000
7,000
2,000
Union dues
7,000
5,000
13th month pay

21,000
Business

P 1,000,000

50,000
Cost of sales
300,000
90,000
tax
80,000
270,000
Value added tax
100,000

5,000
Community tax
10,000
20,000
50,000
10,000
Interest expense
50,000

50,000

68,000

32,000

PhP 50,000

(BIR)



personal exemptions that can be claimed by Mr. Kiko?
P50,000
Correct! P0
P75,000
P150,000

studies

Employment
P 230,000

6,000
7,000
2,000
Union dues
7,000

5,000
13th month pay

21,000
Business

P 1,000,000

50,000
Cost of sales
300,000
90,000
tax
80,000
270,000
Value added tax

100,000

5,000
Community tax
10,000

20,000
50,000
10,000
Interest expense
50,000

50,000

68,000

32,000

PhP 50,000

(BIR)



available tax credits that can be used by Mr. Kiko against the total
income tax liability reported per ITR?
P40,000
P50,000
P20,000
Correct! Answer not given.
Under this system, 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.
Correct! Final withholding tax
Creditable withholding tax
Schedular tax system
Global tax system

A married individual deriving income within the Philippines whose

spouse is unemployed or is a non-resident citizen deriving income from
foreign sources shall be entitled to a personal exemption in 2017 of:
P100,000
None of the choices
P64,000
Correct! P50,000
A fundamental rule in taxation is that the property of one country may

not be taxed by another country. This is known as:
Correct! International comity;
Reciprocity;
Internal inhibition.
International law;
Under the TRAIN Law, the books of accounts are required to be audited
and examined yearly by an independent CPA if the gross quarterly
sales, earnings, receipts or output exceed:
P5,000,000
Correct! P3,000,000
P2,500,000
P1,500,000
Which is the correct and best statement? A tax reform at any given time
underscores the fact that:
Taxation is essentially a legislative power;
Taxation is an inherent power of the state;
orrect Answer Taxation is a power that is very broad;
You Answered The state can and should adopt progressive taxation.
Which of the following statements is correct regarding optional

standard deduction (OSD) after the effectivity of TRAIN law:
You Answered
The OSD allowed for individuals is equivalent to 40% of the gross income
from business or practice of profession.
James, a professional broker, can avail of the OSD on his professional income
subjected to the 10% EWT by his clients.
Availment of the OSD is discouraged by the government since only 60% of the
gross revenues is subjected to income tax.
orrect Answer
OSD is allowed for individuals who opted to pay the 8% income tax rate but
exceeded the P3 million VAT threshold on gross revenues/gross receipts.
A lessor rents his 15 residential units for P14,500 per month. In 2018,
his accumulated gross receipts amounted to P2,610,000. To what
business taxes will he be liable?
Value Added Tax
3% Percentage tax under Section 116 of the 1997 Tax Conde as

amended
Correct!
Neither I nor II
I only
II only
Both I and II

studies

Employment
P 230,000

6,000
7,000
2,000
Union dues
7,000
5,000
13th month pay

21,000
Business

P 1,000,000

50,000
Cost of sales
300,000
90,000
tax
80,000
270,000
Value added tax
100,000

5,000
Community tax
10,000
20,000
50,000
10,000
Interest expense
50,000

50,000

68,000

32,000

PhP 50,000

(BIR)



taxable net income of Mr. Kiko using the optional standard deduction?
Correct!
P864,000
P684,000
P764,000
P714,000

a senior citizen.

P14,776
P 511,781
13th month pay

50,000
14th month pay

50,000

30,000

7,000

28,800

15,000
Christmas gifts
10,000

4,800

10,000

11,000
The amount of total tax-exempt de minimis benefits
Correct! P72,600
P73,600
P60,600
P64,600
The proportional contribution by persons and property levied by the

law-making body of the State by virtue of its sovereignty for the
support of the government and all public needs is referred as:
Answer not given.
Special assessments;
License fee;
Correct! Taxes;
The following are similarities of the inherent power of taxation, eminent

domain, and police power, except one:
Correct! Affect all persons or the public;
Are necessary attributes of sovereignty;
Are legislative in implementation.
Interfere with private rights and property;

Personnel
Benefit provided
Amount
Receptionist
PhP 60,000
IT specialist1
50,000

70,000

Cost - PhP 5,000,000

400,000
1
2 Required to review the work of new hires but does not have the power
3 Has the power to promote and terminate all employees under the
Finance Department
4 The top executive is an expatriate or a special alien holding technical

position

is the total fringe benefit tax due to be remitted by the employer to the
BIR (round-off the answer to the nearest peso)?
P188,235
orrect Answer P2,907,692
P2541,692
You Answered P2,625,883


studies

Employment
P 230,000

6,000
7,000
2,000
Union dues
7,000
5,000
13th month pay

21,000
Business

P 1,000,000

50,000
Cost of sales
300,000
90,000
tax
80,000
270,000
Value added tax

100,000
5,000
Community tax
10,000
20,000
50,000
10,000
Interest expense
50,000

50,000

68,000

32,000

PhP 50,000
(BIR)



final withholding tax to be remitted by Mr. Kiko to the BIR?
P20,000
P10,000
Correct!
P0.
P30,000
A person was given by a special law the privilege to operate a public

utility (franchise), in consideration of which, he was required by that
law to pay a franchise tax. This franchise can be amended by:
An amendment of that special law only;
An amendment of a revenue regulation;

None of the above.
Correct!
An amendment of that special law or a law of general
application;
One of the characteristics of our internal revenue laws is that they are:
Political in nature;
Correct!
Generally prospective in operation although the tax statue may
nevertheless operate retrospectively provided its clearly the
legislative intent;
Answer not given.
Penal in nature;
A married individual deriving income within the Philippines whose

spouse is unemployed or is a non-resident citizen deriving income from
foreign sources shall be entitled to a personal exemption in 2018 of:
P64,000
Correct! None of the choices

P50,000
P100,000
This is a demand of owners:
License fee;
Correct!
Toll;
None of the above.
Tax;
Quiz Score: 93 out of 9

Tax Rev Prelim Examination

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TAX REV PRELIM EXAMINATION

Due Mar 8 at 9pm Points 98 Questions 98

This quiz was locked Mar 8 at 9pm.

Score for this quiz: 93 out of 98

Twenty five percent (25%) of such gross income

Twenty percent (20%) of such gross income

Fifteen percent (15%) of such gross income

Starting 2018, individuals with gross income from business or practice

I Optional standard deduction

III Personal exemptions

V Premium payment on health and hospitalization insurance

I, II, III and IV only

I, II, III, IV and V only

III, IV, IV and either I or II only

Which statement is wrong? “The tax should be based on the taxpayer’s

As a theory of taxation, this is called “ability-to pay-theory”

A graduated tax table is in consonance with this rule.

ABC Corporation, a regional operating headquarters of a multinational

Finance Senior Specialist I2

Chief Financial Officer3

Assuming that the above transactions transpired in CY 2017, how much

A resident citizen rank-and-file private employee has two (2) qualified

Salary, net of P73,443 withholding tax and mandatory deductions of

13th month pay

14th month pay

Rice subsidy (P2,500 x 12 months)

Uniform and clothing allowance

Monetized unused vacation leave credits (12 days)

Actual medical benefits

Laundry allowance (P400 x 12)

Employee achievement award (amount of cash given)

Benefits received by virtue of a collective bargaining agreement (CBA) and

The amount of total excess de minimis benefits and other benefits

Which of the following statement/s is/are false?

Statement I: The optional standard deduction is an amount equal to

Statement II: The optional standard deduction is not available against

Statement III: The election of optional standard deduction is irrevocable

II, III and IV only

I, II and III only

Statement 1: Direct double taxation is prohibited by the Philippine

Statement 2: Indirect double taxation is allowed by the Philippine

Both statements are true;

The first statement is true while the second statement is false;

The first statement is false while the second statement is true;

Both statements are false.

A decedent died on March 15, 2018. He left a gross estate of P20,000.

Correct! Filing of notice of death is no longer needed.

There is a need to file notice of death because somebody died.

Which of the following statements is correct?

1 An individual citizens of the Philippines who is working and deriving

11 A seaman who is a citizen of the Philippines and who receives

111 A non- resident citizen who is not engaged in business in the

1V An alien individual, whether a resident or not of the Philippines, is

1 and 111 only

Which of the following statements is not correct?

The power of taxation is shared by the legislative and executive

An inherent limitation of taxation may be disregarded by the

The property of an educational institution operated by a

In case of conflict between tax laws and generally accepted accounting