INTRODUCTION TO TAXATION INTRODUCTION TO TAXATION

Multiple Choice – Encircle True of False – T / F

1. These refer to the rules or orders having force of law issued by _T_ 1. The court’s power of judicial review is limited to the
the executive branch of the government to ensure uniform interpretation and application of tax laws.
application of the tax law. _T_ 2. In general, government owned and controlled
a. Revenue Regulations corporations are taxable.
b. BIR Rulings
_F_ 3. A tax law is ex post facto in application.
c. Memorandum Orders
d. Local tax Ordinances
_T_ 4. Requiring a license fee prior to selling of bibles
2. A scheme of reducing payment of taxes through legal means violates the free exercise of religion clause in the
a. Tax Evasion constitution.
b. Tax Avoidance _F_ 5. The payment of a priest assigned to the Armed Forces
c. Tax Exemption of the Phil. violates the constitution which states that no
d. Tax Amnesty money may be appropriated for religious purposes.
3. Which of the following is not correct _F_ 6. The imposition of VAT on the sale of bibles violates
a. Indirect taxes may be shifted. the free exercise of religion clause in the constitution.
b. In general, taxes may be offset or compensated. _F_ 7. The President of the Philippines can essentially stop a
c. In general, taxes do not prescribe.
law from being passed through inaction.
d. Taxes are civil in nature, applicable in enemy occupation.
4. Which remedy against double taxation requires a tax treaty?
_F_ 8. All government entities regardless of their function
a. Tax credit are exempted from taxes because it is one of the inherent
b. Reciprocity limitations of taxation.
c. Tax exemption _F_ 9. In taxation, it is one’s criminal liability which gives rise
d. Allowance for deductions to a civil liability.
5. In the absence of fraud, the right of the government to assess _T_ 10. BIR rulings are the best opinions regarding the
prescribes in interpretations of tax laws and are considered sound law
a. 3 years from the filing of the tax return until changed by the Court.
b. 3 years from the filling of the tax return or the last day _F_ 11. Tax laws and tax exemptions must be construed
prescribed by law for filing of return whichever is later
strictly against the taxpayer.
c. 10 years from discovery of the filing of tax return
d. 10 years from the filing of tax return
_F_ 12. Interpretations made by the executive branch for
6. The US embassy donated a parcel of land to the Department the enforcement of tax laws are generally respected by the
of Foreign Affairs of the Philippines. Which of the following Court and are conclusive.
statements is correct? _F_ 13. In case of conflict, generally accepted accounting
a. This transaction is exempt from donor’s tax only. principles prevail over tax laws in the preparation of tax
b. This transaction is exempt from documentary stamp tax returns.
(DST) only. _F_ 14. Private corporations may not be authorized to
c. This transaction is exempt from both donor’s and DST. collect taxes.
d. This transaction is subject to both donor’s and DST. _F_ 15. Eminent domain refers to the power to take public
7. All are not taxes except
property for public use after paying just compensation.
a. Surcharge
b. Special assessment
_F_ 16. The Secretary of Finance and the BIR are allowed to
c. Custom duties issue regulations or rulings which go beyond the scope of a
d. License fee tax law.
8. Tax amnesty is applied _T_ 17. The situs of sale of shares in a domestic corporation
a. Prospectively and expunges civil and criminal liability shall be treated as derived entirely from within the
b. Retrospectively and expunges civil and criminal liability Philippines regardless of where the shares were sold.
c. Prospectively and expunges civil liability _F_ 18. Situs of personal property purchased w/in and sold
d. Retrospectively and expunges criminal liability w/out the Philippines, or purchased w/out and sold w/in the
9. The situs of real property is the law where Philippines, shall be treated as derived entirely from sources
a. Owner is a citizen
within the country in which purchased.
b. Owner is a residence
c. Property is located
_T_ 19. Situs of personal property produced by taxpayer
d. Owner is a domiciled w/in (in whole or in part) and sold w/out the Philippines, or
10. The situs of the service is where the purchased by taxpayer w/out (in whole or in part) and sold
a. Person who performed the service is a citizen w/in the Philippines, shall be treated as derived partly from
b. Service contract was executed sources w/in and partly from sources w/out.
c. Service was rendered _T_ 20. The state can still exercise its taxing powers over its
d. Persons who executed the contract are citizens citizen, even if he resides outside the taxing State’s territory.