No. 125 Brgy.

San Sebastian
Lipa City, Batangas, Philippines
Mobile : 0927 283 8234
Telephone : (043) 723 8412
Gmail : www.icarecpareview@gmail.com

Taxation First Preboard

1. Our national internal revenue laws are

a. Political in nature c. Criminal in nature
b. Penal and nature d. Civil in nature

2. A law was passed by Congress which granted estate tax amnesty to those who have not paid estate
tax due on or before January 1, 2020. The same law does not provide for refund of taxes to those who
have properly paid estate tax covered by the amnesty. Those who have paid their estate tax
complained and asked that the law be declared unconstitutional on the ground of being violative of
the equal protection clause and discriminatory. The law is:
a. Valid because there is a valid classification.
b. Not valid because those who did not pay their taxes are favored over those who have paid
their taxes.
c. Valid because it was Congress that passed the law and it did not improperly delegate the
power to tax.
d. Not valid because only the President with the approval of Congress may grant amnesty.

3. The constitutional limitation declaring churches, parsonages, mosques are exempt from taxation
applies only to what kind of tax.
a. Real estate tax
b. Income tax
c. Value-added tax
d. Donor’s tax

4. Reese Poon, a student activist, wants to impugn the validity of a tax on text messages. Aside from
claiming that the law adversely affects her since she sends messages by text, what may she allege
that would strengthen her claim to the right to file a taxpayer’s suit?
a. A. That she is entitled to the return of the taxes collected from her in case the
court nullifies the tax measure.
b. That tax money is being extracted and spent in violation of the constitutionally
guaranteed right to freedom of communication.
c. That she is filing the case in behalf of a substantial number of taxpayers.
d. That text messages are an important part of the lives of the people she
represents.

5. The payor of passive income subject to final tax is require to withhold the final tax from the
payment due to the recipient. The withholding of the tax, has the effect of
a. A final settlement of the tax liability on the income
b. A credit from the recipient’s taxable income
c. Consummating the transaction resulting in an income
d. A deduction in the recipient’s income tax return

6. The following are laws which should exclusively originate from the House of Representatives, except

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 No. 125 Brgy. San Sebastian
Lipa City, Batangas, Philippines
Mobile : 0927 283 8234
Telephone : (043) 723 8412
Gmail : www.icarecpareview@gmail.com

a. Tariff bills
b. Revenue bills
c. Appropriations bill
d. Laws amending the jurisdiction of the Supreme Court.

7. The following are elements of direct double taxation, except:

a. Both taxes are levied for the same purpose
b. Both taxes are imposed by the same taxing authority
c. Both taxes are imposed upon the same person
d. Both taxes are imposed on the same amount

8. Government agencies performing governmental functions are exempt from tax unless expressly taxed
while those performing proprietary functions are subject to tax unless expressly exempted. What
inherent limitation on the power of taxation is described.
a. The tax imposed should be for public purpose.
b. There should be no improper delegation of the taxing power.
c. The power to tax is limited to the territorial jurisdiction of the taxing government.
d. Exemption of government entities from taxation.

9. The following are constitutional limitations, except:

a. Due process clause
b. Equal protection clause
c. Doctrine of international comity
d. Non-impairment clause

10. Which of the following statements regarding “Taxpayer’s Suit” is incorrect?

a. It is one brought or filed by a taxpayer arguing the validity of a tax statute and its enactment or
the constitutionality of its alleged public purpose.
b. It is a case where the act complained of directly involves the illegal disbursement of public funds
derived from taxation.
c. Taxpayers have “locus standi” to question the validity of tax measures or illegal expenditures of
public money.
d. A taxpayer is relieved from the obligation of paying a tax because of his belief that it is being
misappropriated by certain officials

11. In case of ambiguity, tax laws imposing a tax shall be interpreted

a. Strictly against the taxpayer
b. Liberally in favor of the taxpayer
c. Liberally in favor of the government
d. None of the choices

12. For income tax purposes, the source of the service income is relevant for the taxpayer, who is a:

a. Filipino citizen residing in Makati City

b. Non-resident Filipino citizen working and residing in London, United Kingdom

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 No. 125 Brgy. San Sebastian
Lipa City, Batangas, Philippines
Mobile : 0927 283 8234
Telephone : (043) 723 8412
Gmail : www.icarecpareview@gmail.com

c. Japanese citizen who is married to a Filipina citizen and residing in their family home located in Fort
Bonifacio, Taguig City;
d. Domestic corporation

13. Harry Potter owned shares of stocks of San Miguel Corporation. He purchased the shares for
Php700,000. He sold the shares, directly to his brother Celso, for Php900,000 at a time when the fair
market value of the shares was Php1,000,000.
The capital gains tax on the sale is:
a. Php12,000
b. Php30,000
c. Php6,000
d. Php45,000

14. Harry owned shares of stocks of San Miguel Corporation. He purchased the shares for Php700,000.
He sold the shares, directly to his brother Celso, for Php900,000 at a time when the fair market value
of the shares was Php1,000,000.
Assuming there are no other taxable donations made by Harry during the calendar year, the donor’s
tax due is
a. Php12,000
b. Php30,000
c. Php0
d. Php45,000

15. In 2021, Jane Coleman earned P500,000.00 as income from her Skin Clinic and received P250,000.00
as gift from her boyfriend. She had no other receipts for the year. She spent as itemized deduction
P150,000.00 for the operation of her Skin Clinic. For tax purposes, her gross income for 2021 is

A. P750,000.00
B. P500,000.00
C. P350,000.00
D. P600,000.00

16. Income from dealings in property (real, personal, or mixed) is the gain or loss derived

A. only from the cash sales of property.

B. from cash and gratuitous receipts of property.
C. from sale and lease of property
D. from the sale, barter or exchange of property.

17. In 2021, Steven sent his sister Barbara $1,000 via telegraphic transfer thru CIMB, digital bank. The
bank’s remittance clerk made a mistake and credited Barbara’s account with $1,000,000 in which she
promptly withdrew. The bank demanded the return of the mistakenly credited excess, but Barbara
refused. The BIR entered the picture and investigated Barbara. Would the BIR be correct if it determines
that Barbara earned taxable income under these facts?

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 No. 125 Brgy. San Sebastian
Lipa City, Batangas, Philippines
Mobile : 0927 283 8234
Telephone : (043) 723 8412
Gmail : www.icarecpareview@gmail.com

A. No, she had no income because she had no right to the mistakenly credited funds.
B. Yes, income is income regardless of the source.
C. No, it was not her fault that the funds in excess of $1,000 were credited to her.
D. No, the funds in excess of $1,000 were in effect donated to her.

18. The proceeds received under a life insurance endowment contract is NOT considered part of gross
income

A. if it is so stated in the life insurance endowment policy.

B. if the price for the endowment policy was not fully paid.
C. where payment is made as a result of the death of the insured.
D. where the beneficiary was not the one who took out the endowment contract.

19. ABC, Inc. purchased a residential house and lot with a swimming pool in an upscale subdivision and
required the company president to stay there without paying rent; it reasoned out that the company
president must maintain a certain image and be able to entertain guests at the house to promote the
company’s business. The company president declared that because they are childless, he and his wife
could very well live in a smaller house.

Was there a taxable fringe benefits?

A. There was no taxable fringe benefit since it was for the convenience of the employer and was
necessary for its business.
B. There was a taxable fringe benefit since the stay in the house was for free.
C. There was a taxable fringe benefit because the house was very luxurious.
D. There was no taxable fringe benefit because the company president was only required to stay there
and did not demand free housing. Thus, given for the advantage of the employer

20. A corporation may change its taxable year to calendar or fiscal year in filing its annual income tax return,
provided

A. it seeks prior BIR approval of its proposed change in accounting period.

B. it simultaneously seeks BIR approval of its new accounting period.
C. it should change its accounting period two years prior to changing its taxable year.
D. its constitution and by-laws authorizes the change.

21. ABC Corp. secured an income tax holiday for five (5) years as a pioneer industry. On the 4 th year of the
tax holiday, ABC Corp. declared and paid cash dividends to its stockholders, all of whom are individuals.
Are the dividends taxable?

A. The dividends are taxable; the tax exemption of ABC Corp. does not extend to its stockholders.
B. The dividends are tax exempt because of ABC’s income tax holiday.
C. The dividends are taxable if they exceed 50% of ABC’s retained earnings.
D. The dividends are exempt if paid before the end of ABC’s fiscal year.

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 No. 125 Brgy. San Sebastian
Lipa City, Batangas, Philippines
Mobile : 0927 283 8234
Telephone : (043) 723 8412
Gmail : www.icarecpareview@gmail.com

22. Who among the following individual taxpayers is taxable on income from within and without the
Philippines:
a. Maddy, a native of Bacolod, working as overseas contract worker in Malaysia;
b. Cassie, a resident of Manila and citizen of Australia; who has been working in the
Philippines for the past 10 years;
c. Rue, a resident and citizen of Puerto Rico, sent to the Philippines, as an employee of a
local brewery for 5 months;
d. Juan Cruz, a Filipino, who was sent by his employer to the United States for 5 months.

23. Mac & Me Inc. was issued its certificate of incorporation on December 28, 2020. Noting
that on the same day, the said corporation has been registered with the Bureau of
Internal Revenue and issued its Tax Identification Number (TIN). On January 5, 2021, it
had its first ever commercial transaction. Considering the foregoing, it shall be required
to compute and pay Minimum Corporate Income Tax (MCIT), if higher than normal tax,
beginning the taxable year:
a. 2020
b. 2021
c. 2022
d. 2023
e. 2024

24. The following are taxable with income derived from sources within the Philippines only,
except:
a. Micro Corporation USA, a corporation created under the laws of the United States of
America.
b. Philippine Bearing Inc, a corporation created under the laws of the Philippines. 99%
owned by Bearing USA, Inc, a corporation created under the laws of the USA.
c. Micro Corporation Philippine Branch. Registered branch of Micro Corporation USA.
d. Continental Air MicroAsia, a corporation created under the laws of Malaysia who has
landing rights in the Philippines.

25. Renz and Penz bought fifteen parcels of land from Al on February 14, 2019. On July 17, 2019,
they bought twelve parcels of land from Roma. It should be noted that in December of 2019,
Renz and Penz were able to sell the fifteen parcels of land. While in October 2020, they were
able to sell the latter twelve parcels of land. They have realized a net profit of Php7,500,000 and
Php9,000,000 for 2019and 2020respectively.
a. In 2019 and 2020, Renz and Penz have formed an unregistered partnership and would
be subject to corporate income taxation accordingly.
b. Renz and Penz jo shall be subjected to the final tax on capital gains on the sale of the
real property, on a per transaction basis.

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 No. 125 Brgy. San Sebastian
Lipa City, Batangas, Philippines
Mobile : 0927 283 8234
Telephone : (043) 723 8412
Gmail : www.icarecpareview@gmail.com

c. Renz and Penz, as co-owners, shall be liable shall include, as their gross income, their
respective share in the gain on sale of the real property.
d. Renz and Penz have formed a joint venture which is exempt from income taxation.

26. Lopez, Landicho and Florido are classmates from law school. After 10 years from their
admission to the Bar, they have decided to form a partnership whose sole purpose is the
joint exercise of their common profession. 5 years into the partnership, they have
decided to offer MCLE classes to fellow Lawyers and they did so via Las Leyes Felicidad
Inc (LLF). A corporation whose shares are owned by them divided equally. The
corporation did not bother to be registered with CHED nor with TESDA. One of the
following conclusions is correct:
a. The professional fees earned by the firm shall be exempt from income tax to the
partnership. However, the respective share of the each partner in the net distributable
income shall be subjected to the 10% final tax.
b. Las Leyes Felicidad Inc, will be subjected to income tax on its taxable income whereby
the applicable income tax rate shall be 10%
c. The Firm and the individual partners shall be exempt from income tax.
d. Assuming LLF is in its fifth year of operation, it may be subjected to the Minimum
Corporate Income Tax.

27. Refund of the following taxes are excluded from the gross income, except:
a. 6% capital gains tax on sale of real property.
b. Tax erroneously paid on inter vivos donations to the Government.
c. Special assessment on property specially benefitted by infrastructure project of the
Government.
d. Fringe benefits tax paid by the employer.
28. Which of the following items is included in the gross compensation income of the employee:
a. P9,000 representing nine days of monetized unused vacation leave.
b. Traveling expenses of Php15,000 received by an employee who was sent on a business trip
to Cebu city.
c. Representation expenses of Php5,000 a month and not subject to liquidation.
d. Rice allowance of Php2,000 a month given to managerial and supervisory employee.
29. There is an effect of a payment of dividend when:
a. Fringe benefits are received by an employee from the Company.
b. Promissory notes are paid to the employees for the services he had rendered to the
Corporation.
c. A creditor condones the debt of a corporation.
d. A corporation condones the debt of its stockholder.
30. If a debtor renders service to the creditor, and in consideration thereof the latter condoned the
debt of the former. Such condonation shall be treated as:
a. Gift

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 No. 125 Brgy. San Sebastian
Lipa City, Batangas, Philippines
Mobile : 0927 283 8234
Telephone : (043) 723 8412
Gmail : www.icarecpareview@gmail.com

b. Capital contribution
c. Donation inter vivos
d. Payment of income
31. The following fringe benefits are subject to the fringe benefits tax, except:
a. Benefits received by a managerial employee;
b. Benefits received by a rank-and-file employee;
c. Educational assistance given to the Company’s Finance Manager;
d. Membership dues for golf club membership for the Company’s Vice Presidents.
32. Which of the following is not subject to income tax:
a. Moral damages awarded to litigant for mental anguish on account of libelous articles
written about him.
b. Php5,000 received by a person from a raffle.
c. Excess remittance of dollar from a sister in the United States due to bank’s error whereby
the originally intended remittance was USD1,000 instead of the remitted USD1,000,0000.
d. Interest income on Php360,000 PCSO lotto winning.
33. The following may claim optional standard deductions, except:
a. General professional Partnership of Philippine lawyers;
b. Joint venture in the Philippines
c. Resident citizen individual
d. Non-resident alien individual

34. In 2021, Geri Corp. had the following items of income and expenses:
Sales P500,000
Cost of services, salary of personnel directly engaged in business 250,000
Dividends received 25,000
The dividends were received from a domestic corporation. What amount should be reported as gross
income for minimum corporate income tax purpose?
a. P210,000
b. P235,000
c. P250,000
d. P275,000

35. . In 2021, Salamander Corp., a calendar-year corporation, contributed P80,000 to a qualified

charitable organization. The donor corporation’s net income was P820,000. In 2021 what
amount can Salamander deduct as charitable contributions?
a. P80,000
b. P45,000
c. P41,000
d. P51,000

36. Pocket Monster Corp.(Pokemon), a calendar-year corporation realized taxable income of

P36,000 from its regular business operations for calendar-year 2021. In addition, Pokemon
had the following capital gains and losses during 2020.
Short-term capital gain P8,500

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 No. 125 Brgy. San Sebastian
Lipa City, Batangas, Philippines
Mobile : 0927 283 8234
Telephone : (043) 723 8412
Gmail : www.icarecpareview@gmail.com

Short-term capital loss (4,000)

Long-term capital gain 1,500
Long-term capital loss (3,500)
Pokemon did not realize any other capital gains or losses since it began operations. What is
Pokemon’s total taxable income for 2021.
a. P36,250
b. P38,500
c. P39,500
d. P40,500

37. Danilo is 67 years old, retired. During 2021 he received his lump sum retirement pension from
his former employer of 8 years in the amount of P4,000,000. His net income from business
is P705,000 and received P10,000 social security benefits. What is Danilo’s taxable income?
a. P 4,715,000
b. P705,000
c. P715,000
d. P4,000,000

38. Mr. Manny Ger, Vice-President for building maintenance of the Make a Living Company was
given a car by his employer. The cost of the car given to Mr. Ger was P900,000. The Fringe
benefits tax that Mr. Ger is required to pay is:
a. P:423,529
b. P288,000
c. P900,000
d. Php0

39. Mr. Manny Ger, Vice-President for building maintenance of the Make a Living Company
was given a car by his employer. The cost of the car given to Mr. Ger was P900,000. The
Company will shoulder only P550,000 of the value of the car. The value of the benefit given
to Mr. Ger is:
a. P550,000
b.P275,000
c. P350,000
d. P0

Number 40 to 41 are based on the following:

Stark Incorporated, is a domestic corporation and has been operating for the past 10 years. For
the year ended December 31, 2021, it had the following results of operation:
Gross Income Php 25,000,000
Itemized deductions Php23,000,000

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 No. 125 Brgy. San Sebastian
Lipa City, Batangas, Philippines
Mobile : 0927 283 8234
Telephone : (043) 723 8412
Gmail : www.icarecpareview@gmail.com

Dividend Income from a domestic corporation Php700,000

Total Assets, including land amounting to Php105,000,000
Php10,000,000
40. The Minimum Corporate Income Tax (MCIT) t for the year ended December 31, 2021
amounts to.
a. Php250,000
b.Php400,000
c.Php600,000
d.Php500,000

41. The Regular Corporate Income Tax for the year ended December 31, 2021 amounts to.
a. Php250,000
b.Php400,000
c.Php600,000
d.Php500,000
42. Gena is a compensation income earner from Ghana Inc. She did not have another employer and her
income tax is correctly withheld by her employer
Pedro – Deriving purely compensation income from Frodo Inc, had only one employer during the
year and employer properly withheld from him the correct amount of tax. Pedro is married to Berta.
Berta owns and operates a nail salon and foot spa.
a. Gena and Berto are both allowed to avail of the substituted filing
b. Neither Gena nor Berto are allowed to avail of the substituted filing
c. Only Gena can avail the substituted filing
d. Only Berto can avail of the substituted filing.
43. Which of the following transactions is subject to 6% capital gains tax:
a. Sale of condominium units by a real estate dealer
b. Sale of real property utilized for office use
c. Sale of apartment houses
d. Sale of vacant lot by an employee
44. Share in the net distributable income of a general professional partnership by a resident citizen is
subject to:
a. 10% final withholding tax
b. 20% final withholding tax
c. 6% capital gains tax
d. Regular income tax at 0% to 35%
45. The following taxpayers who received a dividend income from a domestic corporation will receive
net of 10% final withholding tax, except
a. Resident citizen
b. Non-resident citizen
c. Resident alien
d. Non-resident alien engaged in trade or business
46. Which of the following is subject to fringe benefit tax?
a. Basic salary of the rank and file employees
b. Basic salary of the supervisory or managerial employees

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 No. 125 Brgy. San Sebastian
Lipa City, Batangas, Philippines
Mobile : 0927 283 8234
Telephone : (043) 723 8412
Gmail : www.icarecpareview@gmail.com

c. Fringe benefit of the supervisory or managerial employee

d. Fringe benefit of the rank and file employee
47. The principal purpose of taxation is:
a. To encourage the growth of home industries through the proper use of tax incentives
b. To implement the police power of the state
c. To reduce excessive inequalities of wealth
d. To raise revenue for governmental needs
48. MJ’s income from leasing his property reaches the maximum rate of tax under the law. He donated
one-half of his said property to a non-stock, non-profit educational institution whose income and
assets are actually, directly and exclusively used for educational purposes, and therefore qualified
for tax exemption under Article XIV, Section 4 (3) of the Constitution and Section 30 (h) of the Tax
Code. Having thus transferred a portion of his said asset, MJ succeeded in paying a lesser tax on the
rental income derived from his property. Is there tax avoidance or tax evasion?
a. There is tax avoidance. LJ has exploited a fully permissible alternative method to reduce his
income tax by transferring part of his rental income to a tax exempt entity through a donation of
one-half of the income producing property.
b. There is tax evasion. LJ has exploited a non-permissible alternative method to reduce his income
tax by transferring part of his rental income to a tax exempt entity through a donation of one-half
of the income producing property.
c. There is tax dodging
d, None of the choices

49. In case of ambiguity, tax laws imposing a tax shall be interpreted

a. Strictly against the taxpayer
b. Liberally in favor of the taxpayer
c. Liberally in favor of the government
d. None of the choices

50. Which of the following, if received by an individual will be added to the gross income and subjected
to the graduated income tax rate of 0% to 35%.
a. Cash dividend from domestic corporation
b. Property dividend from a domestic corporation
c. Share in the distributive net income after tax of taxable partnership in the Philippines.
d. Share in the distributable net income of a general professional partnership.

51. Receipt of the following by a minimum wage earner does not have an effect on the latter’s exemption
from income tax, except:
a. Holiday pay
b. Hazard pay
c. Nighshift differential pay
d. Commission earned and part of the MWE’s benefits package

52. If a branch of a foreign corp. in the Philippines remits passive income earned in the Philippines to
the head office, what is the applicable tax on the said transaction?
a. Subject to 25% final withholding tax
b. Subject to 12% creditable withholding VAT
c. Subject to 15% branch profit remittances tax
d. Exempt from branch profit remittances tax

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 No. 125 Brgy. San Sebastian
Lipa City, Batangas, Philippines
Mobile : 0927 283 8234
Telephone : (043) 723 8412
Gmail : www.icarecpareview@gmail.com

53. Which of the following corporations shall pay a tax equal to twenty five percent (25%) of the
gross income received during each taxable year from all sources within the Philippines beginning
January 1, 2021?
a. Domestic corporation
b. Resident foreign corporation
c. Nonresident foreign corporation
d. None of the choices

54. Misik Shipping Lines Inc, a Dutch company, having no business in the Philippines, is engaged in
ship building. It leases some of its newly constructed ships to WSuperferry, a Philippine Carrier.
What income tax rate will apply to the rental payments to the lessor?
a. 30% Basic Income Tax
b. 25% Final Withholding Tax
c. 7.5% Final Withholding Tax
d. 4.5% Final Withholding Tax

55. The Secretary of Finance, upon recommendation of the Commissioner of Internal Revenue, issued
a Revenue Regulation using gross income as the tax base for corporations doing business in the
Philippines. Is the Revenue Regulation valid?

a. Yes, the Secretary of Finance has the power to issue rules and regulations.
b. Yes, gross income taxation over corporations is valid.
c. No, Secretary of Finance has virtually amended the NIRC, which is beyond the power of the
executive to do.
d. No, only the Commissioner of the BIR has the authority to make revenue rules and regulations.

56. Who among the following is taxed on his worldwide income?

a. Resident citizen.
b. Resident alien.
c. Nonresident citizen.
d. Nonresident alien.

57. Ri Bond, a resident and national of the United Kingdom flew into the Philippines to woo Elena
Alina. A Filipina she met via Thunder, a dating app for people aged 60 and above. During Ri’s visit
to Elena’s home, her father informed him that he would have to go through the traditional courting
which is strictly followed in their Family. This entails, fetching water from the deep well to their
house, chopping wood and others. To this, Ri agreed. On his 8th month of courtship, Elena died on
a freak accident while drinking a cup of coffee. With tears in his eyes, Ri returned home and
vowed not to return to the Philippines. For purpose of income taxation, Ri shall be classified as:

a. Resident alien;
b. Non-resident alien engaged in trade or business;
c. Non-resident alien not engaged in trade or business;
d. Non-resident citizen

58. Which of the following income derived from within the Philippines by a resident individual is not
subject to the rates in Section 24(A) of the NIRC:
a. Salary received by a managing partner of a general professional partnership.
b. Prize won in a singing contest amounting to Php4,000.

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 No. 125 Brgy. San Sebastian
Lipa City, Batangas, Philippines
Mobile : 0927 283 8234
Telephone : (043) 723 8412
Gmail : www.icarecpareview@gmail.com

c. A gain from the sale of a motor vehicle by a Lawyer.

d. A gain on the sale of real property by an actor, which he inherited from his grandmother.

59. Tonton deposited P300,000,000 pesos of his lotto winnings with the Bank of the Philippine islands.
Uncertain on which investment should he devote the money, he decided to temporarily deposit his
winnings with the said bank. His interest income from the said deposit will be subjected to:
a. 10% final tax
b. 20% final tax
c. added to his gross income and subjected to 0%-35% tax
d. Exemption from income tax

60. No law granting tax exemption shall be passed without the concurrence of:
a. Majority of all members of Congress.
b. 2/3 vote of all members of Congress.
c. ¾ vote of all members of Congress.
d. Majority of all members of the Senate.

61. If the gross income from unrelated activity exceeds 50% of the total gross income of a proprietary
educational institution, the tax rate on taxable income shall be 30%, this principle is known as:
a. Constructive receipt
b. Tax benefit
c. Predominance test
d. Tax sparing

62. The minimum corporate income tax is imposed on…

a. Proprietary educational institution.
b. Corporations enjoying special tax regime under the PEZA law.
c. Business partnerships
d. Regional Operating Headquarters

63. Angus corporation declared and distributed to its stockholders shares of Baka Corporation. One of
its stockholders, William, who is a Filipino, received 100 shares of Baka Corporation shares as
dividends. At the date of dividend declaration, the fair market value of Baka Corporation shares
was P120 per share and by the time William received the dividend, the fair market value per
share was P180. Which of the following is correct? The dividend is….
a. A stock dividend, hence, exempt from income taxation.
b. A property dividend, hence, taxable subject to the graduated tax rate that ranges from 5% to
32%.
c. A property dividend, hence, taxable and subject to the final tax rate of 10%.
d. A property dividend, hence, taxable and subject to the final tax rate of 20%.

64. The following income are subject to final tax, except:

a. Royalty income received by a domestic corporation from another domestic corporation.
b. Cash dividend received by a domestic corporation from a resident foreign corporation.
c. Cash dividends received by a domestic corporation from another domestic corporation.
d. Interest income received by a resident foreign corporation from a Philippine bank.

65. A corporation may employ as a basis for filing its annual corporate income tax return:
a. Calendar year only which begins January 1 and ends December 31.
b. Fiscal year only which could be any day within the calendar year at the discretion of the
corporation.

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 No. 125 Brgy. San Sebastian
Lipa City, Batangas, Philippines
Mobile : 0927 283 8234
Telephone : (043) 723 8412
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c. Either fiscal year or calendar year at the discretion of the corporation.

d. Fiscal year only which coincides on the day of registration with the BIR.

66. A corporation should file its quarterly return within.

a. 30 days following the end of each of the first three quarters of the taxable year.
b. 60 days following the end of each of the first three quarters of the taxable year.
c. 60 days following the end of each of the 4 quarters of the taxable year.
d. 30 days following the end of each of the 4 quarters of the taxable year.

67. A corporation on a fiscal year ending March 31, should file its annual income tax return:
a. On or before April 15 of the same year.
b. On or before April 15 of the following year.
c. On or before July 15 of the same year.
d. On or before July 15 of the following year.

68. Which of the following may be subject to corporate income tax:

a. Non-stock and non-profit educational institution.
b. A public educational institution.
c. A private educational institution.
d. Local water district

69. The MCIT shall not apply to the following Resident Foreign Corporations (RFC), except:
a. RFC engaged in business as international air carrier subject to 21/2% of their gross
Philippine Billings.
b. RFC engaged in business as Offshore Banking Units (OBU).
c. RFC engaged in business as a Regional Operating Headquarters (ROHQ).
d. RFC engaged in Hotel business in the Philippines.

70. For purposes of income taxation, which of the following is not considered as a corporation?
a. General partnership in trade
b. General professional partnership
c. Mutual fund company
d. Regional operating headquarters of multinational company

13 | P a g e AESCARTIN/TLOPEZ/JPAP A/DS ALES