3/4/22, 10:30 AM P2 Examination: BAM 031 - Income Taxation

P2 Examination: BAM 031 - Income

Taxation
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Multiple Choice

Direction: Read each item carefully and choose the best answer in the
questions provided below. (15 points)

Subject to inherent and constitutional limitations, the power of taxation is 1 point

regarded as supreme, plenary, limited and comprehensive.

Basis of taxation

Situs of taxation

None of the choices

Scope of taxation

Theory of taxation

Clear selection

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3/4/22, 10:30 AM P2 Examination: BAM 031 - Income Taxation

I. Collection of tax is a legislative act. II. Imposition of tax is an 1 point

administrative act.

True; false

False; true

False; false

True; True

Clear selection

The following are not required to file Income Tax returns, except 1 point

None of the choices

An individual earning purely compensation income whose taxable income does not
exceed P300,000.00

An individual whose income tax has been withheld correctly by his employer, provided
that such individual has only one employer for the taxable year

An individual whose sole income has been subjected to final withholding tax or who is
exempt from income tax pursuant to the Tax Code and other special laws.

An individual who is a minimum wage earner

Clear selection

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3/4/22, 10:30 AM P2 Examination: BAM 031 - Income Taxation

Which of the following income is taxable in the Philippines 1 point

Salary received from working abroad by a nonresident citizen

Cash dividend received by a nonresident citizen from a foreign corporation

interest income in the Philippines earned by a nonresident alien

Business income earned in the USA by an American Citizen residing in Palawan

None of the choices

Clear selection

Which of the following is an income subject to regular (basic) tax? 1 point

Share in the net income of ordinary partnership

Interest income from BPI

None of the choices

Prizes from US lotto

Dividends received from domestic corporations

Clear selection

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3/4/22, 10:30 AM P2 Examination: BAM 031 - Income Taxation

The following are constitutional limitations, except 1 point

Rule of uniformity and equity in taxation.

Non-impairment of the obligation of contracts.

Exemption from income tax of charitable institutions, cemeteries, churches,

personage or convents appurtenant thereto, as well as all lands, buildings and
improvements actually, directedly and exclusively used religious, charitable and
exclusively education purposes.

No imprisonment for non-payment of poll tax.

None of these

Clear selection

Which of the following depicts the correct final tax? 1 point

P100,000 prize for winning Miss World, P20,000.

None of the choices

P200,000 deposits from foreign banks, P40,000.

P80,000 royalties from books, P8,000.

P50,000 inter-corporate dividends, P10,000.

Clear selection

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3/4/22, 10:30 AM P2 Examination: BAM 031 - Income Taxation

Which of the following received by an individual taxpayer is not subject to 1 point

final tax but subject under section 24 (A) of the Tax Code?

Property dividends from regional operating headquarters of multinationals

Share in the distributive net income after tax of taxable partnership in the Philippines

Cash dividends from domestic corporations

Cash divided from a foreign corporation with the Philippine Branch

None of the choices

Clear selection

Final Tax is generally withheld; 1 point

On passive income - YES ; From Philippines Sources - YES

On passive income - NO ; From Philippines Sources - YES

On passive income - NO ; From Philippines Sources - NO

On passive income - YES ; From Philippines Sources - NO

Clear selection

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3/4/22, 10:30 AM P2 Examination: BAM 031 - Income Taxation

Taxable only on income from sources within the Phil. except 1 point

None of the choices

Resident alien

Resident citizen

Non-resident citizen

Non-resident alien

Clear selection

Which is true? 1 point

The CIR is empowered to terminate the taxable period whenever he deems it

necessary to enforce the collection of tax.

Claim for exemption shall be interpreted against the taxpayer.

Taxes can be subject to compensation or set-off.

None of the choices

Tax avoidance is illegal.

Clear selection

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3/4/22, 10:30 AM P2 Examination: BAM 031 - Income Taxation

A resident citizen received a prize of P50,000. Which of the following 1 point

statements is correct in connection with the imposition of final tax on

prize?

None of the choices

The whole amount will be subject to 25% final tax

The first P10,000 is subject to Section 24(A), the remaining P30,000 is subject to 20%
final tax

The first P10,000 is exempt from tax, the remaining P30,000 is subject to 20% final
tax.

The whole amount will be subject to 20% final tax

Clear selection

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3/4/22, 10:30 AM P2 Examination: BAM 031 - Income Taxation

The sale of ordinary assets is 1 point

Regular income tax

5% & 10% capital gains tax

Exempt from income tax

Subject to 6% capital gains tax

None of the choices

Clear selection

I. Tax is imposed to raise revenue. II. License fee is imposed to raise 1 point

revenue.

True; false

True; True

False; true

False; false

Clear selection

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3/4/22, 10:30 AM P2 Examination: BAM 031 - Income Taxation

The following are examples of Ordinary Assets, which is not? 1 point

None of the choices

Real property used in trade or business which is subject to the allowance for
depreciation

Stock in trade of a taxpayer or other real property of a kind which would properly be
included in the inventory of the taxpayer if on hand at the close of the taxable year

Real property held by the taxpayer primarily for sale to customers in the ordinary
course of his trade or business

Clear selection

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