1. Mr. Pompy was injured in a vehicular accident in 2020.

He incurred and paid medical expenses of

P20,000 and legal fees of P10,000 during the year. In 2021, he received P70,000 as settlement
from the insurance company which insured the car owned by the other party involved in the
accident. From the above payments and transactions, the amount of taxable income to Mr. Monte in
2021 is
a. Zero
b. P40,000
c. P70,000
d. P110,000

2. The term “capital assets” includes:

a. Stock in trade or other property included in the taxpayer’s inventory.
b. Real property not used in the trade or business of taxpayer.
c. Property primarily for sale to customers in the ordinary course of his trade or business.
d. Property used in the trade or business of the taxpayer and subject to the depreciation.

3. If an individual performs services for a creditor who in consideration thereof cancels the debt, the
cancellation of indebtedness may amount:
a. To a gift.
b. To a capital contribution.
c. To a donation intervivos.
d. To a payment of income.

4. Which of the following is not treated as a corporation?

a. General partnership in trade.
b. General professional partnership.
c. Mutual fund company.
d. Regional operating headquarters of multinational company.

5. Which of the following is taxable?

a. Separation pay received by a 50-year old employee due to the retrenchment program of
the employer.
b. Retirement pay received from a benefit plan registered with the Bureau of Internal Revenue
where at the time the employee retired he was 55 years of age, retiring from employment for
the first time in his life, and was employed with the employer from whom retiring for 6 years
prior to retirement.
c. Social security benefit received by a balikbayan from employer abroad at the age of 35.
d. SSS and GSIS benefit.

6. Which of the following is not gross compensation income?

a. Salary of P50,000 of an employee.
b. Bonus of P50,000 of an employee.
c. Salaries of P40,000 of a partner of a general partnership in trade.
d. Honorarium of P40,000 of an employee who is a member of the board of directors of a
corporation

7. One of the following is not correct for deductibility of losses from gross income:
a. It must arise from fire, storm, or other casualty, robbery, theft, or embezzlement.
b. It must not be compensated by insurance or any form of indemnity.
c. A declaration of loss by casualty should be filed with the Bureau of Internal Revenue.
d. It is of property owned by the taxpayer, whether used in business or not.

8. A general professional partnership is exempt from income tax, but is required to file an income tax
return:
a. For statistical purposes.
b. Because the net income of the partnership will be traced into the income tax return of
the partners.
c. Because all income earners are required to file income tax return.
d. None of the above.

9. Which of the following items are not taxable?

a. Income from jueteng
b. Gains arising from expropriation of property
c. Income taxes paid and subsequently refunded
d. Gains on the sale of a car used for personal purposes

10. A domestic proprietary educational institution improved its library facilities by adding a new wing
 to its old library building. The capital outlay on library improvement, for income tax purposes,
may be
a. Deducted in full at the time of completion of the improvement
b. Capitalized or expensed outright at the option of the school owner
c. Capitalized and depreciated over the estimated life of the improvement
d. Capitalized or expensed outright at the option of the government

11. As a rule, which of the following is subject to 10% tax on net income?
a. Dividend received by a resident citizen from a domestic corporation
b. Royalty income from musical composition received by a resident alien
c. Off-shore banking units
d. Proprietary educational institutions

12. Optional Standard Deduction cannot be availed by

a. Andrew E, an OFW in Taiwan for 5 years.
b. Foren Noy, a resident and citizen of Spain engaged in the tobacco industry in the Philippines
c. Jolibee Corporation, a domestic corporation engaged in food industry abroad
d. Jean Sapoles, a Filipino residing in California, USA

13. Which statement does not properly refer to a general professional partnership? A general
professional partnership is one
a. Registered as such with SEC and the BIR
b. That is composed of individuals who exercise a common profession
c. That exclusively derives income from the practice of profession
d. That derives professional and rental income from property owned by it

14. The following cannot avail of deductions from gross income except:
a. Citizens and resident alien whose income is purely compensation income
b. Non-resident foreign corporation
c. Non-resident alien not engaged in trade or business in the Philippines
d. Resident foreign corporation

15. The following organizations shall not be taxed in respect to income received by them as such
except
a. Non-stock and non-profit educational institution
b. Government education institution
c. Non-profit hospitals
d. Cemetery company owned and operated exclusively for the benefit of its members

16. Income from performance of service is treated as income within the Philippines, if
a. The payment of compensation for the service is made in the Philippines
b. The contract calling for the performance of service is signed in the Philippines
c. The service is actually performed in the Philippines
d. The recipient of service income is a resident of the Philippines

17. Which statement is correct? A non-stock, non-profit charitable association that sells its idle
agricultural property is
a. Not required to file an income tax return, nor pay income tax on transaction to the BIR
provided the sales proceeds are invested in another real estate during the year
b. Required to pay the 6% capital gains tax on gross selling price or fair market value
whichever is higher
c. Mandated to pay the 30% regular corporate income tax n the gain from sale
d. Required to withhold the applicable expanded withholding tax rate on the transaction and
remit the same to the BIR

18. The optional standard deduction for individuals is

a. 10% of the gross income
b. 10% of the gross sales/receipts
c. 40% of the gross income
d. 40% of the gross sales/receipts

19. Which of the following statements is not correct?

a. MCIT is not applicable to non-resident foreign corporations
b. The corporate quarterly return shall be filed within 60 days following the close of each of
the first three quarters of the taxable year.
c. Resident foreign corporations would be taxed on net income from within the Philippines only
d. Non-resident foreign corporations are taxed on gross income from within and without the
Philippines
20. The following income are subject to final tax, except?
a. Royalty income received by a domestic corporation from a domestic corporation
b. Cash dividends received by a non-resident foreign corporation from a domestic
corporation
c. Cash dividends received by a domestic corporation from a domestic corporation
d. Interest income received by resident foreign corporation from a Philippine bank

21. CPA University, a private educational institution organized in 2000, had the following data for 2021.
Tuition fees P 480, 000
Rental income P 520, 000
School related expenses P 450, 000

Theincome tax due for 2021 is

a. P137, 500
b. P 55,000
c. P 48, 000
d. P 100, 000

22. The net shares received by a partner in a general co-partnership is

a. Part of his taxable income
b. Exempt from income tax
c. Subject to corporate tax
d. Subject to final tax

23. ABC Corp. had a net sales of P1M. The actual entertainment, amusement and recreation
expense amounted to P20,000. The deductible “EAR” expense is
a. P20,000
b. P10,000
c. P 6,000
d. P 5,000

24. Paandar Industries, a non-VAT registered sole proprietorship engaged in the transport of
passengers, operates two liners: Tarsier Bus Lines is engaged in the domestic transport of
passengers by land while Butanding Ferries is engaged in the domestic transport of passengers by
sea. During the taxable year 2021, the following revenues and expenses were presented to you:
Tarsier Butanding
Gross receipts 4,000,000 2,000,000
Less: Cost of services (3,200,000) (1,400,000)
Gross income 800,000 600,000
Less: Allowable (500,000) (400,000)
Deductions
Taxable income 300,000 200,000

How much is income tax due?

a. 31,500
b. 55,000
c. 125,000
d. 460,000

25. Advance rental in the nature of prepaid rental, received by the lessor under a claim or right and
without restriction as to use is
a. Taxable income of the lessor in the year received if he/she is on the cash method of
accounting
b. Taxable income of the lessor in the year received whether he/she is on the cash or
accrual method of accounting
c. Taxable income of the lessor in the year received whether he/she is on the cash or accrual
method of accounting
d. Taxable income of the lessor up to the amount earned in the year the rental is received

26. Gross benefits received by officials and employees of public and private entities as 13 th month pay
and other benefits such as productivity bonus, service incentive pay and Christmas bonus shall be
excluded from taxable income up to
a. P30,000
b. P82,000
c. P90,000
d. P50,000
 27. One of the following is not acceptable as basis of relief from the MCIT
a. Lawsuits filed by the company
b. Prolonged labor dispute
c. Legitimate business reverse
d. Force majeure

28. Which of the following statements is correct?

a. Partners of a taxable partnership are considered as stockholders and profits distributed
to them by the partnership are considered as dividends.
b. The share of each partner in net income of a taxable partnership shall be based on their
capital contribution.
c. The share of an individual partner in the net income of taxable partnership shall be equal
to the share of a capitalist partner with the least capital contribution.
d. The industrial partner shall contribute money and or property but not services

29. The share of a co-venturer corporation in the net income after tax of a joint venture or
consortium taxable as corporation is
a. Subject to final withholding tax of 20%
b. Subject to regular corporate income tax of 30%
c. Exempt from income tax
d. Subject to capital gains tax

30. Which of the following will disqualify a taxpayer in using the 8% income tax option?
a. The taxpayer has gross sales/receipts of P3,500,000.
b. The taxpayer is a registered self-employed individual
c. The taxpayer has a gross compensation income for the year.
d. The taxpayer is registered as professional.

Dalagang Pilipina Company was incorporated on June 12, 1898. It uses the fiscal year which begins from
May 1 and ends on April 30 of the next year. For the years ending April 30, 2022 and April 30, 2023, the
following are the results of operations:

2022 2023
Sales 14,000,000 16,000,000
Less: Cost of (8,000,000) (9,000,000)
sales
Gross profit 6,000,000 7,000,000
Less: Expenses (5,930,000) (3,500,000)
Net income 70,000 3,500,000

Dalagang Pilipina Company has assets amounting to P240,000,000 which includes a parcel of land
amounting to P50,000,000.

31. How much is the income tax payable in 2022?

a. P17,500
b. P21,000
c. P60,000
d. P120,000

32. How much is the income tax payable in 2023?

a. P832,500
b. P875,000
c. P951,000
d. P1,041,000

33. The payments by their clients to which type of partnership are exempted from creditable
withholding tax?
a. General professional partnership
b. Commercial or business partnership
c. Both a and b
d. Neither a nor b

34. Who shall pay the income tax on the taxable income of general professional partnership?
a. General professional partnership
b. Clients of general professional partnership
c. Partners of general professional partnership in their separate income tax returns
d. None of the above
YNTCD Partnership is a domestic partnership duly registered with the Securities and Exchange
Commission. Its total liabilities amounted to P2,000,000, and its total partners’ equity amounted to
P3,300,000. Its primary purpose as stated in its Articles of Co-Partnership, is the selling of cat food. The
partners, Katy and Taylor, share equally in the profits. For the year ended December 31, 2021, the income
statement of YNTCD Partnership showed the following:
Sales 1,480,000
Less: Cost of sales (650,000)
Gross profit 830,000
Less: Expenses (360,000)
Earnings before tax 470,000

35. Compute for the income tax due of YNTCD Partnership.

a. 0
b. P94,000
c. P117,500
d. P141,000

36. Net of any applicable withholding taxes, how much will Katy receive assuming she is a
resident alien?
a. P131,600
b. P148,050
c. P188,000
d. P169,200

37. Net of any applicable withholding taxes, how much will Taylor receive assuming she is a non-
resident alien engaged in trade or business?
a. P131,600
b. P148,050
c. P188,000
d. P150,400

38. Chromatica Corporation was incorporated in 2020. SEC issued its Certificate of Incorporation on
June 30, 2020. Chromatica Corporation follows the calendar year. When will the imposition of the
minimum corporate income tax commence?
a. First quarter of 2023
b. Third quarter of 2023
c. First quarter of 2024
d. Third quarter of 2024

39. Minimum corporate income tax is carried froward:

a. For the three immediately succeeding taxable years
b. For the four immediately succeeding taxable years
c. For the five immediately succeeding taxable years
d. For the one hundred seventy eight immediately succeeding taxable years

40. Statement 1: A one-person corporation is taxed in a similar way as a sole proprietorship.

Statement 2: Due to their relatively small size, a one-person corporation is always subject to 20%
regular corporate income tax.

a. Only Statement 1 is true

b. Only Statement 2 is true
c. Both statements are true
d. Both statements are not true

41. Statement 1: All proprietary educational institutions are not subject to minimum corporate
income tax.
Statement 2: Domestic corporations engaged in business as depository banks under the expanded
foreign currency deposit system on their income from foreign currency transactions with local
commercial banks are not subject to minimum corporate income tax.

a. Only Statement 1 is true

b. Only Statement 2 is true
c. Both statements are true
d. Both statements are not true
 42. Angkas Corporation is a resident foreign corporation with branches nationwide, including the
Philippines. Its Philippine branch had an income of P10,000,000 in 2020, and it earmarked
P8,000,000 for remittance. It actually remitted P7,000,000. How much is the branch profit
remittance tax due of the Philippine branch?
a. 0
b. 1,050,000
c. 1,200,000
d. 1,500,000

43. Which individual taxpayer is taxable for his income from within and from without Philippine
sources?
a. Resident citizen
b. Nonresident citizen
c. Resident alien
d. Nonresident alien

44. Bad debts, as an allowable deduction:

a. Requires proof of worthlessness and uncollectibility
b. Is an estimate of worthless and uncollectible accounts
c. Is determined by the lapse of time at which accounts remain uncollected
d. Is determined by materiality of the amount on uncollected accounts

45. Net operating loss carry over

a. Can be deducted against income tax due to arrive at taxable income
b. Can be deducted against income tax due to arrive at income tax payable
c. Can be deducted against gross income to arrive at income tax payable
d. Can be deducted against gross income to arrive at taxable income

46. What is the maximum entertainment and recreational expenses that may be claimed by
provider of services?
a. 2% of gross service revenues
b. 0.5% of gross sales
c. 1% of gross service revenues
d. 1.5% of gross sales

47. Which of the following taxes is not allowed to be claimed as allowable deductions from gross
income?
a. Capital gains tax
b. Documentary stamp tax
c. Other percentage tax
d. Local business tax

48. All of the following are not entitled to any deduction for NOLCO, except
a. Resident foreign corporations
b. PEZA registered entities
c. SBMA registered entities
d. International carriers

Fearless Corporation, a dealer in sugar under the brand Mr. Perfectly Refined Sugar, has gross sales of
P1,400,000,000 with cost of sales of P560,000,000 and allowable deductions of P150,000,000 for calendar
year 2020. Fearless Corporation began operating in 1989.

Fearless Corporation’s total assets of P180,000,000 includes the land and building in which the business is
situated, amounting to P50,000,000 and P25,000,000, respectively.

49. Applying CREATE Law, how much is Fearless Corporation’s income tax due?
a. P172,500,000
b. P189,750,000
 c. P193,500,000
d. P207,000,000

50. Compute for Fearless Corporation’s minimum corporate income tax.

a. P4,200,000
b. P8,400,000
c. P12,600,000
d. P16,800,000

51. During 2020, Tsunayoshi Corporation gave the following fringe benefits to its employees:
Salaries to rank and file employees 1,000,000
Salaries to managerial employees 1,800,000
De minimis benefits to rank and file employees 54,400
De minimis benefits to managerial employees 27,200
Fringe benefits to rank and file employees 102,000
Fringe benefits to managerial employees 170,000

How much is the fringe benefit tax?

a. P48,000
b. P80,000
c. P91,538
d. P166,400

The University of Saint Augustine Philippines (USAP)was a domestic educational institution established in
1432. It is the first to offer Accountancy, Law, and Medicine in Asia. It has produced many distinguished
alumni including presidents, statemen, and saints. For the taxable year ending December 31, 2025, USAP
had the following results of operations:
Gross receipts
From tuition fees 14,000,000
From rentals 2,500,000
From sale of school 6,300,000
merchandise
Total gross receipts 22,800,000
Less: Cost of services (13,450,000)
Gross profit 9,350,000
Less: Operating profit (5,240,000)
Net income 4,110,000

52. If USAP is a non-stock non-profit educational institution, how much is income tax due?
a. P1,233,000
b. P411,000
c. P822,000
d. 0

53. What is the tax rate of Branch Profit Remittance Tax?

a. 10%
b. 15%
c. 5%
d. 20%

54. Which corporation is subject to the minimum corporate income tax?

a. Proprietary educational institution
b. Nonprofit hospital
c. Nonresident foreign corporation
d. Resident foreign corporation

55. Before the passage of CREATE Law, which of the following corporations is subject to 10%
preferential corporate income tax rate?
a. Proprietary hospitals
 b. Nonstock nonprofit educational institutions
c. Both A and B
d. Neither A nor B

56. Statement 1: Meal allowance and lodging furnished by the employer to the employees are
exempt from tax if furnished for the advantage or convenience of the employer.
Statement 2: Tax exempt meal allowance should be furnished within the premises of the
employer
a. Only statement 1 is correct
b. Only statement 2 is correct
c. Both statements are correct
d. Both statements are incorrect

57. Under the CREATE Law, the rate of withholding tax on ordinary income derived by
nonresident foreign corporations in the Philippines is:
a. 20%
b. 25%
c. 20% or 25% depending on the taxpayer’s taxable income and assets
d. 30%

58. Which of the following should be included as part of gross income subject to regular income tax of
a resident citizen taxpayer?
a. Royalties from literary compositions earned in the Philippines
b. Royalties from films showed in France
c. Prizes amounting to P40,000
d. PCSO winnings amounting to P6,000

59. A domestic corporation organized and operated as a non-stock non-profit educational institution
received P200,000 from tuition fees and P300,000 from rentals to private concessionaires. The
educational institution used the P500,000 in order to buy books as part of its program of upgrading
the library. Which of the following statements is true?
a. The entire amount of P500,000 is subject to 30% income tax
b. The entire amount of P500,000 is subject to 10% income tax
c. Only the amount of P300,000 is subject to 30% income tax
d. The entire amount of P500,000 is exempt from income tax

60. All of the following can be deducted from a purely compensation income earner’s income
except:
a. Union dues
b. Mandatory PAGIBIG Contributions
c. Private health insurance contributions
d. Mandatory SSS contributions

1. The tax imposed on the right to transmit property at death is known as

a. Donor’s tax
b. Estate tax
c. Business tax
d. Income tax

2. The tax imposed on the transfer of property without consideration between two or more
persons who are living at the time the transfer is made
a. Donor’s tax
b. Estate tax
c. Business tax
d. Income tax

3. Mortis causa transfer of property is effected:

a. When the property is received by the heir
b. When the court awarded the ownership of property to a particular heir
c. Upon the death of the decedent
d. Upon payment of estate tax

4. The subject matter or object of transfer taxes is

a. Right to transmit
 b. Decedent
c. Properties of the decedent
d. Beneficiaries

5. Which of the following is incorrect?

a. Estate tax is an excise tax. It is a tax on the right to transfer property at death and
on certain transfers which are made by law the equivalent of testamentary
disposition.
b. Excise tax is an ad valorem tax. It is assessed based on the net value of the
estate transferred.
c. Upon effectivity of TRAIN Law, estate tax is a proportional tax. It is no longer based
on a graduated tax rate but to a fixed rate of 6% on the net taxable estate of a
decedent.
d. Estate tax is a specific tax.

6. Justification for the imposition of transfer tax

a. Redistribution of wealth theory
b. Benefit received theory
c. State partnership theory
d. All of the above

7. The taxpayer in estate tax is:

a. The decedent
b. The estate as a juridical entity
c. The heirs or successors
d. The administrator or executor

8. Who has the personal liability to pay estate tax?

a. The decedent
b. The estate as a juridical entity
c. The heirs or successors
d. The administrator or executor

For items 9-10

On December 19, 2017, Pres. Rodrigo R. Duterte signed into law the Package 1 of the Comprehensive Tax
Reform Package (CTRP), also known as the “Tax Reform for Acceleration and Inclusion (TRAIN) as RA
10963. The law took effect on January 1, 20218. Pedro died on December 20, 2017.

9. For estate tax purposes, which law shall be applied in determining the estate tax liability on
the estate of Pedro?
a. The Tax Code prior to its amendment under RA 10963
b. The Tax Code as amended under RA 10963 (TRAIN Law)
c. Either “a” or “b” at the option of the executor or administrator
d. Either “a” or “b” at the option of the heirs

10. Assume Pedro died on January 25, 2018, which law shall be applied in determining the
estate tax liability on his estate?
a. The Tax Code prior to its amendment under RA 10963
b. The Tax Code as amended under RA 10963 (TRAIN Law)
c. Either “a” or “b” at the option of the executor or administrator
d. Either “a” or “b” at the option of the heirs

11. is a written will which must be entirely written, dated and signed by the
hand of the testator himself. It is subject to no form and it may be made in or out of the
Philippines and need not be witnessed.
a. Ordinary will
b. Notarial will
c. Holographic will
d. Codicil
12. The persons prohibited by law to make a will are:
I. Those below 18 years of age
II. Those who are not of sound mind at the time of its execution
a. I only
b. II only
c. Both I and II
d. Neither I nor II

13. The following are the elements of succession, except:

a. Decedent
b. Estate
c. Heir
d. Executor

14. Succession which results from the designation of an heir, made in a will executed in the
form prescribed by law is known as:
a. Legal or intestate succession
b. Testamentary succession
c. Mixed succession
d. Ordinary succession

15. The portion of the decedent’s estate which the law reserves to his compulsory heir is called:
a. Legitime
b. Free portion
c. Legacy
d. Bequest

16. An act of liberality whereby one disposes gratuitously a thing or right in favor of another
who accepts it:
a. Succession
b. Occupation
c. Donation
d. Tradition

17. Donor’s tax is:

a. A property tax
b. A personal tax
c. A business tax
d. An excise tax

18. Which of the following statements is correct?

a. A transfer is gratuitous or without consideration and accordingly qualifies as a
donation, if no economic benefit measurable in money or money’s worth flowed to
the transferor from the transferee
b. A gratuitous transfer is always subject to donor’s tax
c. A donation on which the donor’s tax was not paid is not a valid donation
d. Title to the donated real property can be transferred to the donee in the Register
of Deeds even if the donor’s tax on the donation had not been paid
19. Which of the following donations inter vivos may not require that it be in writing?
a. Donation of a personal property, the value of which exceeds P5,000
b. Donation of a personal property, the value of which is P5,000
c. Donation of real property, the value of which is less than P5,000
d. Donation of real property, the value of which exceeds P5,000

20. Which of the following statements regarding donation of an immovable property is correct?
a. The donation must be made in a public document specifying therein the
property donated
b. The acceptance may be made in the same Deed of Donation or in a separate
public document, but it shall not take effect unless it is done during the lifetime of
the donor
c. If the acceptance is made in a separate instrument, the donor shall be notified
thereof in an authentic form, and this step shall be noted in both instruments
d. All of the above

21. Statement 1: Regardless of the relationship to the donee, donations made by the donor
are subject to the scheduler rates of 2% to 15%, if such donation was made prior to the
effectivity of TRAIN Law.
Statement 2: A relative by consanguinity in the collateral line within the fourth degree of relationship is not
a stranger.
a. Only statement 1 is correct
b. Only statement 2 is correct
c. Both statements are correct
d. Both statements are incorrect

22. Statement 1: Regardless of the relationship to the donee, donations made by the donor
beginning January 1, 2018 shall be subject to 6% donor’s tax rate in excess of P250,000
exempt gifts.
Statement 2: Donations made by or in favor of juridical persons beginning January 1, 2018 shall be
subject to 6% donor’s tax rate in excess of P250,000 exempt gifts.
a. Only statement 1 is correct
b. Only statement 2 is correct
c. Both statements are correct
d. Both statements are incorrect

23. Which of the following is subject to donor’s tax?

I. Condonation of debt due to rendition of service
II. Condonation of debt made by a corporation in favor of its shareholders
III. Contribution in cash or in kind to any candidate, political party, or coalition of
parties for campaign purposes
a. I only
b. II only
c. II and III
d. None of the above
24. Which of the following transactions is deemed a taxable gift?
a. Condonation or remission of a debt
b. Sale of residential house and lot for less than adequate and full consideration in
money or money’s worth
c. Both A and B
d. Neither A nor B

25. A non-resident citizen donor is taxed on his donation of properties:

a. Situated in the Philippines only
b. Wherever situated
c. Situated outside the Philippines only
d. Situated in the Philippines only subject to the rule of reciprocity

26. Statement 1: In all cases, void donations are not subject to donor’s tax.
Statement 2: Every donation between the spouses during the marriage shall be void.
a. Only statement 1 is correct
b. Only statement 2 is correct
c. Both statements are correct
d. Both statements are incorrect

27. There is reciprocity, when the donor and the donated property is:
Donor Property
a Non-resident alien Intangible personal property
b Non-resident Immovable
citizen
c Non-resident alien Tangible personal property
d Resident alien Any kind of property

28. A tax minimization scheme which is done by spreading the gift over numerous calendar
years to avail lower tax liability
a. Spread out method
b. Donation of life insurance
c. Splitting of gift
d. Void donation

29. The spouses Ana and Pedro wanted to donate a parcel of land to their son Luis who is
getting married in December 2016. The parcel of land has a zonal valuation of P420,000.
What is the most efficient mode of donating a property?
a. The spouses should first donate in 2016 a portion of the property valued at P20,000
then spread the P400,000 equally for 2017, 2018, 2019 and 2020
b. Spread the donation over a period of 5 years by the spouses donating P100,000
each year from 2016 to 2020
c. The spouses should each donate a P110.000 portion of the value of the property
in 2016 then each should donate P100,000 in 2017
d. The spouses should each donate a P100,000 portion of the value of the property in
2016, and another P100,000 each in 2017. Then, in 2018, Pedro should donate the
remaining 20,000
30. A gift that is incomplete because of reserved powers becomes complete when:
I. The donor renounces the power
II. The right of the donor to exercise the reserved power ceases because of the
happening of some event or contingency or the fulfillment of some condition other
than because of the donor’s death
a. I and II are correct
b. I and II are not correct
c. Only I is correct
d. Only II is correct

31. Manolo, a resident of Dagupan City donated to Arturo a property in Laoag City. The donor’s
tax is P40,000. The deed of donation was signed in the residence of Arturo in Baguio City.
The donor’s tax return must be filed in:
a. Dagupan City
b. Laoag City
c. Baguio City
d. Quezon City

32. For donation made on or after January 1, 2018, the donor’s tax return shall be filed within:
a. Six months after the date the gift is made or completed
b. Two months after the date the gift is made or completed
c. Thirty days after the date the gift is made or completed
d. One year after the date the gift is made or completed

33. Unless the Commissioner otherwise permits, the donor’s tax return shall be filed and the
tax paid to the:
I. Authorized agent bank (AAB) under the jurisdiction of the RDO where the donor
is domiciled at the time of transfer
II. Revenue District Officer or Revenue Collection Officer having jurisdiction over the
place where the donor is domiciled at the time of the transfer
III. Officer of the Commissioner if the donor has no legal residence in the Philippines
IV. Philippine Embassy or Consulate in the country where the donor is domiciled at
the time of the transfer or directly to the Office of the Commissioner, in case of
gifts made by a nonresident.
a. I and II only
b. I, II, and III
c. I, II, and IV only
d. All of the above

34. Statement 1: Only one return shall be filed for several gifts (donations) by a donor to
the different donees on the same date.
Statement 2: If the donation involves conjugal/community property, each spouse shall file separate
return corresponding to his/her respective share in the conjugal/community property.
a. True, False
b. False, True
c. True, True
d. False, False
35. Statement 1: A donation can be both aa part of the gross gift of the donor and a taxable
income to the donee.
Statement 2: A donation may be exempt from donor’s tax but not necessarily a deduction from the
donor’s gross income.
a. Only statement 1 is correct
b. Only statement 2 is correct
c. Both statements are correct
d. Both statements are incorrect

36. One of the following cannot be claimed as deduction from the gross estate of a non-
resident alien decedent:
a. Vanishing deduction
b. Medical expenses
c. Share of surviving spouse
d. Transfer for public use

37. One of the following is not allowed as a deduction from the gross estate of a non-resident
alien decedent
a. Transfer for public use
b. Standard deduction
c. Share of the surviving spouse
d. Family home

38. Statement 1: In a claim against insolvent person, the insolvency of the debtor must be
proven and not merely alleged.
Statement 2: It could be that the amount to be included as part of the gross estate as a claim against
insolvent person is less than the full amount owed.
a. Only statement 1 is correct
b. Only statement 2 is correct
c. Both statements are correct
d. Both statements are incorrect

39. The fruits on properties owned by the spouses before and brought into the marriage
shall be classified as:
Absolute Community of Conjugal Partnership of
Property Gains
a Community Conjugal
b Exclusive Exclusive
c Community Exclusive
d Exclusive Conjugal

40. Properties owned by the spouses before and brought into the marriage shall be classified as:
Absolute Community of Conjugal Partnership of
Property Gains
a Community Conjugal
b Exclusive Exclusive
c Community Exclusive
d Exclusive Conjugal
 For items 41-43
The following items were in the estate of Aling Lucing, who died on May 30, 2020:
Land, Zimbabwe 7,020,000
Land, Antipolo 8,687,000
Ordinary shares, Filipino corporation, 40% of business is in the 3,709,000
Philippines
Ordinary shares, Filipino corporation, 60% of business in the Philippines 4,175,000
Ordinary shares, Italian corporation, 30% of business in the Philippines 5,302,000
Ordinary shares, Nigerian corporation, 55% of business in the 5,226,000
Philippines
Ordinary shares, Guatemalan corporation, 90% of business in the 6,257,000
Philippines
Trademark, registered in the Philippines 5,992,000
Franchise, exercisable in Argentina 7,979,000
Franchise, exercisable in the Philippines 8,393,000
Car, British Virgin Islands 5,052,000
Car, Philippines 5,059,000

41. How much is Aling Lucing’s gross estate if she is a resident citizen of the Philippines?
a. 30,579,000
b. 42,272,000
c. 43,789,000
d. 72,851,000

42. How much is Aling Lucing’s gross estate if she is a resident of Morocco and a citizen
of Cambodia, and reciprocity does not apply?
a. 38,563,000
b. 42,272,000
c. 43,789,000
d. 47,498,000

43. How much is Aling Lucing’s gross estate if she is a resident of Sri Lanka and a citizen
of Albania, and reciprocity applies?
a. 13,746,000
b. 14,141,000
c. 19,367,000
d. 28,526,000

44. Gong Gang, a resident and citizen of South Korea, died on March 10, 2021, leaving a
gross estate located in the Philippines amounting to P8,000,000 and a gross estate located
outside the Philippines amounting to P2,000,000. He incurred funeral expenses amounting
to P250,000. How much total deductions is allowable against his estate?
a. 200,000
b. 250,000
c. 500,000
d. None of the choices
 45. Romeo and Juliet are married. In 2020, 40 years after their marriage, Romeo died,
leaving, among others, the following with the corresponding fair market value:
Land inherited from his father before the marriage 5,000,000
House constructed on the above-mentioned land during the 3,000,000
marriage
Jewelries inherited from his mother before the marriage 2,000,000

How much is deductible Family Home?

a. 8,000,000
b. 6,500,000
c. 4,000,000
d. 1,000,000

For items 46-48

Tee Gok, a resident citizen, died on August 15, 2020. Details regarding her gross estate are presented below:
Value at the death
of
Tee Gok
Conjugal property 4,500,000
House, exclusive property of Tee Gok 1,500,000
Other exclusive property of Tee Gok 1,200,000

Amount
Actual funeral expenses incurred 250,000
Judicial expenses, incurred evenly for 12 months 480,000
Deductible claims against the estate 420,000
Loss from claims against insolvent persons 140,000
Insured loss from earthquake 200,000

The house, when it was inherited on September 16, 2015, had a fair market value of P1,150,000. The house
was mortgaged to secure a debt of P600,000, which was assumed by Tee Gok. Up to this date, the debt
has not been fully paid, and it is now being claimed as a deductible claim against the estate. Assume that
all ordinary deductions are chargeable to the conjugal property.

46. Compute for the gross estate

a. 2,700,000
b. 4,950,000
c. 7,200,000
d. 7,620,000

47. Compute for the vanishing deductions

a. 178,911
b. 183,202
c. 232,404
d. 271,010

48. In filing the estate tax return of tee Gok, is a certification from a Certified Public
Accountant required to be attached?
a. Yes, because the gross estate exceeded P2,000,000
 b. Yes, because the gross estate exceeded P5,000,000
c. No, because the gross estate did not exceed P5,000,000
d. No, because the gross estate did not exceed P10,000,000

49. With no more money left, the heirs of Vina were left with no recourse but to withdraw from
the bank account of Vina who died one month ago. Vina’s bank deposits amount to
P2,400,000. Vina’s net taxable estate after deducting special deductions and the share of
surviving spouse is P12,500,000, excluding the amount withdrawn. Pending the payment of
estate taxes to the BIR, what is the maximum amount that the heirs of Vina can receive
from the bank in relation to Vina’s bank account?
a. 2,112,000
b. 2,256,000
c. 2,332,000
d. 2,400,000

50. Various types of losses incurred by a decedent’s estate were as follows:

 Loss due to typhoon, a day before the decedent’s death – P1,000,000
 Loss due to shipwreck, six months after the decedent’s death – P500,000
 Loss due to robbery, One and a half years after the decedent’s death – P2,000,000
 Gambling loses before death – P2,250,000

How much is the deductible losses from the gross estate of the decedent?
a. 500,000
b. 2,250,000
c. 2,500,000
d. 1,500,000

For items 51-54

Generous as he truly is, Newt Scamander made the following donations to various persons and institutions
during 2020:
 On February 13, he donated to 20,000 square meter parcel of land in Cavite to his niece
subject to the condition that she will graduate. The land was originally acquired at a price of
P3,000,000, has a zonal value as of this date of P3,500,000, and an assessed value of
Р3,550,000.
 On February 14, the next day, he transferred a diamond ring to his girlfriend. The
diamond ring is worth P2,300,000.
 On April 8, Newt's niece graduates from college. The parcel of land in Cavite has
increased both its zonal and assessed value by P200,000.
 On August 22, Newt gave 30,000 unlisted preference shares of Nimbus Corporation to
his sister. Each share has a par value of P30 and a market value of P32.
Newt is a resident and a citizen of the Philippines. All of the above donations have complied with the requirements
for validity.

51. What is the status of the donation of the diamond ring on February 14?
a. The donation is void. Donations to spouses or other persons with whom the donor is
in a romantic relationship is generally void, except if on occasion or family rejoicing.
b. The donation is void. A diamond ring is not a moderate gift.
 c. The donation is void. Donations between persons guilty of adultery or concubinage
is void.
d. The donation is valid.

52. How much is the donor’s tax payable for the transaction on February 13?
a. 0
b. 165,000
c. 195,000
d. 198,000

53. How much is the donor’s tax payable for the transaction on April 8?
a. 0
b. 210,000
c. 213,000
d. 225,000

54. How much is the donor’s tax payable for the transaction on August 22?
a. 0
b. 3,000
c. 54,000
d. 402,000

For items 55–56

Patrick, resident alien, made the following donations for the year 2018:
 April 15
- To Hailey (legally adopted child): Car worth P700,000 in the Philippines
- To Rebekah (daughter): Car in Canada worth P300,000. The donor’s tax paid
in Canada was $200 ($1 = P45)

 July 20
- - To Sophie (niece in Manila): P200,000 worth of personal property
- - To Davina (legitimate daughter on account of marriage, July 18, 2017): Car in
Manila, worth P400,000 but mortgaged for P200,000, one-half of which was assumed
by the donee

55. The gift tax payable on April 15 should be:

a. 45,600
b. 30,000
c. 44,000
d. 36,000

56. The gift payable on July 20 should be:

a. 40,000
b. 30,000
c. 84,000
d. 80,000
 For items 57-58
The estate of Pedro, resident citizen, decedent, married, who died on April 1, 2018 are as follows:
House and lot (family home) 14,000,000
- The lot was acquired at a cost of P3M before marriage while the
house was constructed on March 1, 2018, during marriage, at a
cost of P10M from partnership funds. The lot had a FMV of P4M
after construction of
the house.
Other properties acquired during marriage 6,000,000
Jewelry inherited on Feb 14, 2017, during marriage, then with a FMV of 2,500,000
P1,300,000
Property in US received as gift during marriage from a friend on Jan 12, 2,300,000
2017 (the applicable donor’s tax was not paid by the donor)
Rental income on the above property up to time of death 1,200,000

Expenses/Claims
Funeral expenses 420,000
Judicial expenses 800,000
Casualty losses incurred on Dec 10, 2018 600,000
Claims against the estate 1,600,000
Medical expenses within 1 year prior to death, only half was 4,000,000
receipted

57. How much is the net taxable estate under Conjugal Partnership of Gains?
a. 3,926,000
b. 6,426,000
c. 3,426,000
d. 1,348,000

58. How much is the net taxable estate under Absolute Community of Property?
a. 4,836,000
b. (2,174,000)
c. 1,174,000
d. 2,174,000

59. On June 29, 2021, Eren and Mikasa, married, donated a conjugal real property to their
daughter on account of the latter's marriage which was celebrated 6 months ago. The real
property had a fair market value of P500,000. How much would be the donor's tax due from
Eren, if any?
a. 15,000
b. 14,000
c. 4,000
d. Answer not given
60. On account of continued losses, in 2021, Ted Mosby sold all his shares in McLaren's Pub
Corporation to Marshall Eriksen for P250,000 when the fair market value thereof was
P600,000, under a bona fide sale. How much would be the taxable gift, if any?
a. 600,000
b. 350,000
c. 250,000
d. Answer not given

1. Which of the following products is VAT exempt

a. Rabbits
b. Dogs
c. Anacondas
d. Fighting Cocks

2. Which of the following statements is true regarding Jude’ importation of clothing for
personal use?
a. Jude is required to pay VAT considering that the item imported is the same item that
he regularly sells.
b. Jude is not required to pay any VAT because the clothing is for personal use
c. Assuming Jude is a non-VAT tax payer, Jude is not required to pay the VAT on
importation.
d. Jude is required to pay VAT but cannot claim any input tax credit on the VAT he
has paid

3. The common carrier’s tax is imposed on:

a. Transport of cargoes by land
b. Transport of passengers by land
c. Transport of cargoes by sea within the Philippines
d. Transport of passengers by air within the Philippines

4. Yoona is a student at the Review School of Caring Educators. She sold her unused iPhone to
her friend for P30,000, and with those amounts she saved P10,000, and spent P20,000 to buy
a cheaper phone. How much is Yoona’s VAT payable?
a. P1,200, computed as 12% of the amount she has saved.
b. P3,600, computed as 12% of the price at which her friend bought his phone.
c. Zero. Yoona is not engaged in business.
d. Zero. Yoona is not VAT-registered.

5. In order to be subject to the requirements of VAT registration, a business must have:

a. Gross sales or receipts, other than those that are exempt under Section 109,
exceeding P3,000,000
 b. Gross sales or receipts, other than those that are exempt under Section 109, of at
least P3,000,000
c. Gross sales or receipts exceeding P3,000,000
d. Gross sales or receipts of at least P3,000,000

6. Which of the following manufacturers/processors can claim presumptive input VAT?

a. Processor of rice
b. Processor of sardines
c. Processor of salt
d. Processor of eggs
7. Under the TRAIN Law, what is the quantitative threshold in order for non-VAT registered
seller of goods or services to be subjected to value-added tax?
a. Gross sales or receipts exceeding P1,919,500 during the year or in any 12-month
period
b. Gross sales or receipts amounting to at least P3,000,000 during the year or in
any 12-month period
c. Gross sales or receipts exceeding P3,000,000 during the year or in any 12-month
period
d. Gross sales or receipts amounting to at least P1,919,500 during the year or in
any 12-month period

8. Which of the following boxing exhibition may be exempt from amusement tax?
a. World or National Championship must be at stake
b. All contenders are residents of the Philippines
c. The proceeds of the exhibition will go to charity
d. The said exhibition is promoted by a non-resident Filipino citizen

9. If a transaction is subject to stock transaction tax, then:

a. Any gain is not subject to income tax and the gross receipts is not subject to VAT
b. Any gain may be subject to income tax but the gross receipts is not subject to VAT
c. Any gain is not subject to income tax but the gross receipts is subject to VAT
d. Any gain may be subject to income tax and the gross receipts is subject to VAT

10. Which of the following income is subject to 0% gross receipts tax?

a. Net trading gains on debt instruments
b. Commissions from lending activities
c. Equity shares in net income of subsidiaries
d. Net trading gains on foreign currency

11. Which of the following franchisees is not subject to franchise tax?

a. Electric utility franchisees
b. Radio franchisees
c. Television franchisees
d. Water utility franchisees

12. Who is statutorily liable for the payment of VAT?

a. Seller
b. Buyer
c. Seller or buyer, at the option of the government
d. Seller and buyer

13. Optional registration for VAT is irrevocable for a period of

a. 1 year
b. 3 years
 c. 5 years
d. 7 years

14. Statement 1: Life insurance premiums received by domestic insurance companies are
subject to 4% premium tax.
Statement 2: Property insurance premiums received by domestic insurance companies are subject to 2%
premium tax.
a. Only Statement 1 is true.
b. Only Statement 2 is true.
c. Both statements are true.
d. Both statements are not true.

15. Statement 1: Incidental and Isolated transactions may be subject to VAT

Statement 2: A VAT registered supermarket selling general merchandise sells one of its cash registers.
The sale is subject to VAT.
a. Only statement 1 is true
b. Only statement 2 is true
c. Both statements are true
d. Both statements are false

16. Milk Brand Corporation is a domestic corporation engaged in the manufacturing of milk
products. Milk Brand had the following transactions for the quarter:
VAT exclusive
amounts
Sold milk to retailers 48,000,000
Disposed milk evaporator machine (Cost 10,000,000
50,000,000 and Proceeds 60,000,000
Distributed milk to shareholders as part 14,000,000
of their property dividends
Transferred a milking machine to a 8,000,000
creditor as payment of debt

How much is the output VAT for the taxable quarter?

a. 15,600,000
b. 14,400,000
c. 9,600,000
d. 5,760,000

17. Smart Solutions, Inc sells its computers on a consignment basis. This quarter, it had
the following sales:
Direct Sales 14,000,000 Sales
through consignees 38,000,000

On the other hand, the ending inventory of Smart solutions consist of the following:
LCNRV Selling
price (vat
exclusive)
Located at the warehouse 1,400,000 1,960,000
With possession of consignees, consigned 800,000 1,120,000
30 days ago
With possession of consignees, consigned 770,000 1,078,000
50 days ago
 With possession of consignees, consigned 480,000 672,000
70 days ago

How much is the output VAT?

a. 6,297,600
b. 6,320,640
c. 6,450,000
d. 6,584,400

For questions 18 and 19

Green residences company leases out apartment units along Taft Avenue Manila. The following
are the rental rates:
Area Capacity Monthly
Rentals
25 sq. 1 12,00
m. 0
35 sq. 2-3 14,00
m. 0
45 sq. 3-4 16,00
m. 0

Green residences leases out 35 units of its 25 sq.m. rooms, 30 units of its 35 sq.m. rooms and 25 units
of its 45 sq.m. rooms. The apartment building sits on a lot that has a zonal value of 2,000,000 and
assessed value of 2,200,000.

18. How much is Green Residences’ output VAT?

a. 480,000
b. 576,000
c. 1,180,800
d. 1,785,600

19. Assuming that Green residences sold the parcel of land where the apartment sits for
a consideration of 1,900,000 how much is the output VAT for the sale of lot?
a. 240,000
b. 228,000
c. 264,000
d. 0

20. Gross receipts is the appropriate VAT base for all of the following except:
a. Importation
b. Sale of services
c. Lease of properties
d. Sale of securities

For questions 21 and 22

James is a sole proprietor of a VAT-registered t-shirt printing business. During the taxable month of
September 2018, he made the following transactions:

Transaction Value
Importation of clothing for personal use 189,000
Importation of clothing to be resold in business 1,240,000
Importation of printers 975,000
Domestic purchase of t-shirt ink 880,000
Payment for maintenance service rendered for 358,000
business
 21. How much is the input vat?
a. 265,800
b. 371,400
c. 414,360
d. 437,040

22. If James is a non-VAT registered taxpayer, how much can be claimed as input VAT?
a. 0
b. 265,800
c. 414,360
d. 437,040

23. A sale is a sale on deferred-payment basis if:

a. The initial payments are at least 25% of the gross selling price
b. The down payment is at least 25% of the gross selling price
c. The initial payments exceed 25% of the gross selling price
d. The down payment exceeds 25% of the gross selling price

24. Which of the following taxpayers is barred from the cancelling its optional VAT registration?
a. Export-oriented enterprise
b. International common carriers
c. Operators of amusement places
d. Radio and television companies

25. The Quarterly VAT Return is BIR Form No. , and must be filed within days from the
close of the quarter.
a. 2550Q; 20
b. 2551Q; 20
c. 2550Q; 25
d. 2551Q; 25

For items 26-28

Fighting for a boxing title, the most awaited boxing match between Jet Lee, known Chinese featherweight
boxer, with a record of 24-0-0, with 18 knockouts, and Cardo Dalisay, a famous Filipino boxer, with a
record of 28-0-0, with 22 knockouts, was held on July 8, 2018. The promoter, Bottom Rank, Inc.,
leased the venue for a cost of 8,000,000, and was able to generate revenues amounting to 24,000,000
from ticket sales and advertising, generating profits of 16,000,000.

26. Compute for the amusement tax due assuming the boxing match is for the
Philippine Bantamweight Belt
a. 0
b. 1,600,000
c. 2,400,000
d. 4,320,000

27. Compute for the amusement tax due assuming the boxing the match is for the World
Flyweight Belt, and Bottom Rank, Inc. is 50% owned by Filipinos.
a. 0
b. 1,600,000
c. 2,400,000
d. 4,320,000
 28. Compute for the amusement tax due assuming the boxing match is for the World
Flyweight Belt, and Bottom Rank, Inc., is 60% owned by Filipinos.
a. 0
b. 1,600,000
c. 2,400,000
d. 4,320,000

29. In general, the percentage tax return is required to be filed:

a. Within 10 days from the close of the taxable quarter
b. Within 15 days from the close of the taxable quarter
c. Within 20 days from the close of the taxable quarter
d. Within 25 days from the close of the taxable quarter

30. Maria and Clara entered into a contract of sale of car. Negotiations were made on March 1,
2021. They were able to agree on the price via text message on April 1, 2021. They signed
the contract on May 1, 2021, and constructive delivery of the car was made a week after on
May 8, 2021. When shall VAT be recognized from the transaction?
a. March 1, 2021
b. April 1, 2021
c. May 1, 2021
d. May 8, 2021

31. Which of the following transactions does not entitle the businessman to claim tax credit in
Input VAT?
a. Transactions subject to OPT
b. Zero-rated VAT -subject transactions
c. 12% VAT-subject transactions
d. None of the choices

For questions 32 and 33

Radio Balita Company is a radio company granted franchise by the government. Radio Balita had the
following gross receipts related to its radio operations for three years. Radio Balita has been properly
registered with the BIR annually.
2019 1,500,000
2020 4,500,000
2021 10,500,000
TOTAL 16,500,000

32. How much is franchise tax in 2020?

a. 0
b. 90,000
c. 135,000
d. 225,000

33. How much is franchise tax in 2021?

a. 0
b. 210,000
c. 315,000
d. 525,000

34. Which of the following is a VAT-subject event?

 a. Approval of a request for cancellation of registration due to a desire to revert to
exempt status after the lapse of three consecutive years from the time of registration
by a person who voluntarily registered
b. Change in trade or corporate name of the business
c. Merger of corporations
d. Consolidation of corporations

35. All of the following are subject to 18% amusement tax, except:
a. Cockpits
b. Cabarets
c. Day clubs
d. Jai-alai

36. Who is the taxpayer for tax on winnings?

I. Owner of the winning horse
II. Holder of the winning ticket
a. I only.
b. II only.
c. Both I and II.
d. Neither I nor II.

37. Which of the following is not subject to amusement tax?

a. Enchanted Kingdom, an amusement park
b. Turtles KTV, a karaoke hub
c. Happy Hour, a night club
d. Cockapitan, a cockpit

38. Which of the following sale is subject to stock transaction tax?

a. Sale by a non-dealer of securities of shares of a domestic corporation directly to
the buyer.
b. Sale by a non-dealer of securities of shares of a domestic corporation through the
local stock exchange.
c. Sale by a dealer of securities of shares of a domestic corporation through the local
stock exchange.
d. Sale by a dealer of securities of shares of a domestic corporation directly to the buyer.

For questions 39 and 40

Lakbayan Company has a fleet of cars, buses, trucks, ships, and planes. During the year, the following
services were rendered by Lakbayan Company as common carrier on the domestic transport of
passengers and cargoes.
Transport by Passenger Cargoes
Cars 627,000 128,000
Buses 585,000 185,000
Trucks 43,000 616,000
Ships 713,000 813,000
Planes 424,000 433,000
2,392,000 2,175,000

39. How much is the common carrier’s tax dues?

a. 0
b. 37,650
c. 65,250
 d. 71,760

40. How much is output VAT?

a. 0
b. 99,360
c. 261,000
d. 397,440

41. What is the tax base for the tax winnings for holders of winning tickets?
a. Amount of winnings
b. Amount of winnings net of the cost of the ticket
c. Cost of the ticket
d. Cost of the ticket net of the amount of winnings

42. Which of the following is not an exemption to the overseas communication tax?
a. Non-profit organizations
b. Diplomatic services
c. International organizations
d. News services

43. Overseas communications tax is imposed at the rate of:

a. Two percent
b. Three percent
c. Five percent
d. Ten percent

For questions 44 and 45

The Business and Accounting College of Sampaloc (BACS) is a stock educational institution duly
registered with the Department of Education and Commission on Higher Education.
During the quarter, it had the following receipts:
Tuition fees from students 70,700,000
Lease payments by private 7,450,000
concessionaires
Grants and donations from alumni 5,740,000
Total 83,890,000

All of the receipts were used by the school for educational purposes. It was able to establish a five-story
library building and improve its science and computer laboratories with the amount it has received.

44. Compute the output VAT of BACS

a. 0
b. 688,800
c. 894,000
d. 1,582,800

45. If BACS is a non-stock, non-profit educational institution, how much is BACS’ output VAT?
a. 0
b. 688,800
c. 894,000
d. 1,582,800
 46. A non-bank financial intermediary not performing quasi-banking functions earned
the following income for the taxable year 2021:
Interest income on loans 1,000,000
Service Fees 500,000
Trading Gains 400,000
Trading Losses 300,000
Rentals received under finance 200,000
lease

• The interest income on loans is 40% from those with remaining maturity of 4
years; while the rest have a remaining maturity of 10 years
• The finance lease had a remaining maturity of 2 years, and the receipts are 80%
for the principal, 20% for interest

How much is the GRT due?

a. P70,000
b. P66,000
c. P58,000
d. Answer not given

47. Transport of passengers by air within the Philippines is:

a. Subject to 3% common carriers tax
b. Subject to 0% VAT
c. Subject to12% VAT
d. Exempt from common carriers tax and VAT

For questions 48 to 50
Interpretativa Company, a VAT-registered service provider, provides premium translations of documents
and manuscripts into any language. Due to the presence of online services such as Google
Translate, Interpretativa is now suffering from substantial losses. Interpretativa decided to sell its land
that it uses in its business located in Cagayan de Oro at a price of P20,000,000. The schedule of
payments is broken down as follows:
January 1, 2021 4,000,00
0
June 1, 2021 4,000,00
0
January 1, 2022 4,000,00
0
January 1, 2023 4,000,00
0
January 1, 2024 4,000,00
0
Total 20,000,00
0

48. How much is the output VAT to be recognized on January 1, 2021?

a. 0
b. 480,000
c. 1,200,000
d. 2,400,000

49. How much is the output VAT to be recognized on January 1, 2022?

a. 0
b. 480,000
c. 1,200,000
d. 2,400,000

50. Assuming Interpretativa Company is a real estate dealer, how much is the output VAT to
be recognized on January 1, 2021?
 a. 0
b. 480,000
c. 960,000
d. 2,400,000

51. Which of the following leases shall be subject to VAT?

a. Lease with monthly rental exceeding P15,000 and the annual aggregate rentals
exceed P3,000,000
b. Lease with monthly rental exceeding P15,000 but the annual aggregate of rentals
does not exceed P3,000,000
c. Lease with monthly rental not exceeding P15,000 but the annual aggregate
rentals exceeds P3,000,000
d. Lease with monthly rental not exceeding P15,000 and the annual aggregate rentals
does not exceed P3,000,000

52. Which of the following is exempt from common carriers tax?

a. Pedicabs (bicycle with side carriages for passengers)
b. Tricycles
c. Animal-drawn two-wheeled vehicles
d. Jeepneys

53. When does constructive receipt occur?

a. When the money is received by a construction worker
b. When the seller has an unconditional right to receive the payment due from the buyer
c. When the seller has a legally enforceable right to demand the payment due from
the buyer such as when the seller has already rendered the services agreed upon
d. When the money consideration or its equivalent is placed at the control of the
person who rendered the service without restrictions by the payor

54. Which of the following transactions is subject to the overseas communication tax?
a. Inbound calls
b. Outbound calls
c. Outbound payments to postal services
d. Inbound payments to postal services

55. What is the tax based for computation of output VAT on rendition of services?
a. Gross receipts
b. Gross service revenue
c. Gross sales
d. Landed value
For questions 56 to 58
For the year 2022, the following transactions transpired, all exclusive of VAT:
Sale of A Corp, a domestic supplier to B Corp an entity
located inside the Laguna Economic Zone 3,360,000
Sale of B Corp to C Corp, an entity located inside the
Laguna Economic Zone 1,800,000
Sale of C Corp to D Corp, an entity within the customs
territory 2,680,000
Sale if D Corp to E Corp, an entity located outside the
Laguna Economic Zone 3,136,000

A, B, C, and D are all VAT-registered.

56. How much is the output VAT liability of A Corp?
a. P360,000
b. P403,200
c. P0
d. Answer not given

57. How much is the input tax credit available to C Corp?

a. P216,000
b. P192,857
c. P0
d. Answer not given

58. How much is the VAT payable of D Corp?

a. P376,320
b. P54,720
c. P48,857
d. Answer not given

59. In which of the following creditable input VAT is payment of the input VAT not necessary for
the crediting of Input VAT?
a. Transitional and Presumptive Input VAT
b. Neither of the choices
c. Transitional input VAT
d. Presumptive Input VAT

60. The VAT on importation is paid by:

a. The non-resident seller monthly
b. The resident buyer monthly
c. The non-resident seller before release of goods from customs custody
d. The resident buyer before release of goods from customs custody

1. All of the following are inherent powers of the government, except:

a. Taxation
b. Eminent domain
c. Police power
d. Anti-terrorism

2. The Philippine government recently passed RA No. 14023, otherwise known as

Bardagulan to Heal as One Act, which penalized, among others, violation of community
quarantine rules in light of the prevailing pandemic. This is an example of the exercise
of the government of which inherent power?
a. Taxation
b. Eminent domain
c. Police power
d. Corruption

3. Statement 1: Income of religions from their proprietary activities are exempted from
taxes.
Statement 2: Due to the separation of Church and State, taxes cannot be used for the establishment of a
cathedral.
a. Only Statement 1 is true
b. Only Statement 2 is true
c. Both statements are true
d. Both statements are not true

4. In 2020, Mapagpala Corporation paid for the monthly rental of the residential house of its
branch manager amounting to P204,000. How much is the fringe benefit expense for the
month?
a. P0
b. P48,000
c. P102,000
d. P204,000
5. Which fringe benefit may be subjected to fringe benefits tax?
a. De minimis fringe benefits given to rank and file employees
b. De minimis fringe benefits given to supervisory or managerial employees
c. Fringe benefits in excess of de minimis fringe benefits given to rank and file
employees
d. Fringe benefits in excess of de minimis fringe benefits given to supervisory or
managerial employees

6. Taxes must be proportionate. This means that:

a. The tax to be imposed must be based on the needs of the government
b. The tax to be imposed must be based on the income of the taxpayer
 c. The tax to be imposed must be based on the ability of the taxpayer to pay
d. The tax to be imposed must be based on the willingness of the taxpayer to pay

7. The Bureau of Internal Revenue is under which department of the Executive Branch of
the Government?
a. Department of Agriculture
b. Department of Finance
c. Department of Public Works and Highways
d. Department of Environment and Natural Resources

8. Statement 1: Meal allowance and lodging furnished by the employer to the

employees are exempt from tax if furnished for the advantage or convenience of the
employer.
Statement 2:Tax exempt meal allowance should be furnished within the premises of the employer
a. Only statement 1 is correct
b. Only statement 2 is correct
c. Both statements are correct
d. Both statements are incorrect

9. Which of the following is an inherent limitation on the power of taxation?

a. Uniformity of taxation
b. Progressivity system of taxation
c. International comity
d. Free speech

10. Which government agency has the power to declare a tax law unconstitutional?
a. President
b. Supreme Court
c. Commission on Audit
d. Commission on Human Rights

11. Sana is a resident citizen, Tzuyu is a non-resident citizen, while Mina is a resident
alien. Who among them is subject to income tax on income derived from sources
within and outside the Philippines?
a. Sana only
b. Sana and Tzuyu only
c. Sana and Mina only
d. Sana, Tzuyu, and Mina

Vincenzo earned the following items of income for the calendar year ending 2021:
Interest income, debtor resides in Hong 420,000
Kong, payment made in the
Philippines
Interest income, debtor resides in the 330,000
Philippines, payment made in China
Gain from sale of real property, real property 440,000
situated in America
Gain from sale of personal property, sale 290,000
made in UK, property Is in the
Philippines
Gain from sale of shares of stock of a 225,000
domestic corporation, residence of
buyer is Taiwan, sale made in
 Argentina
TOTAL 1,705,000

12. If Vincenzo is a resident citizen, how much of his income is subject to Philippine
income tax?
a. 330,000
b. 555,000
c. 845,000
d. 1,705,000

13. If Vincenzo is a resident alien, how much of his income is subject to Philippine income
tax?
a. 330,000
b. 555,000
c. 845,000
d. 1,705,000

14. Statement 1: Income tax is an excise tax

Statement 2: Income tax is a personal tax
a. Only Statement 1 is true
b. Only Statement 2 is true
c. Both statements are true
d. Both statements are not true

15. The situs of income from sale of real property is determined by:
a. The place where the real property is located
b. The place where the registered owner of the real property resides
c. The place where the current possessor of the real property has citizenship
d. The place where the deed of sale of real property was notarized

16. The valuation of the CIR of real properties is called:

a. Zonal value
b. Assessed value
c. Fair market value
d. Appraised value

17. On January 1, 2020, Pedro established a trust fund for the benefit of his daughter, Ana.
Pedro appointed Mr. Abugado as the trustee. The property transferred to the trust is a
piece of land with a dormitory earning rental income. During the year, the trust earned
P40,000,000 revenues and incurred expenses of P10,000,000. Out of the trust’s income,
Mr. Abugado transferred P10,000,000 to Ana. During the year, Ana earned compensation
income of P2,500,000. How much is the taxable income of the trust?
a. P30,000,000
b. P29,980,000
c. P19,980,000
d. P20,000,000

18. During 2020, Alpha Corporation gave the following fringe benefits to its employees:
Salaries to rank and file employees 1,000,000
Salaries to managerial employees 1,800,000
De minimis benefits to rank and file 54,400
employees

De minimis benefits to managerial employees 27,200

Fringe benefits to rank and file employees 102,000
Fringe benefits to managerial employees 170,000

How much is the fringe benefit tax?

a. P48,000
b. P80,000
c. P91,538
d. P166,400

19. How much is the total allowable deduction from business income of Alpha
Corporation?
a. P3,153,600
b. P3,233,600
c. P3,245,138
d. P3,271,600

Industrious as he is known, Arthur, a non-VAT registered resident citizen, works as a government

employee at daytime and accepts clients for accounting work after office hours. At the same
time, Arthur maintains a t-shirt printing shop to earn more. For the taxable year ending
December 31, 2021, Arthur earned the following amounts:
Taxable compensation income 850,000
Gross receipts from accounting work 1,500,000
T-shirt printing shop
Gross sales 1,400,000
Cost of sales (800,000)
Gross income 600,000
Operating expenses (400,000)
Net income (t-shirt printing 200,000
shop)

Upon filing his first quarter income tax return, Arthur availed of the 8% income tax option.

20. Assuming that the availment of the 8% income tax option is proper, how much is
Arthur’s income tax due?
a. 232,000
b. 300,000
c. 357,000
d. 377,000

Taravel Industries, a non-VAT registered sole proprietorship engaged in the transport of passengers,
operates two liners: Philippine Cheetah Bus Lines is engaged in the domestic transport of
passengers by land while Philippine Dolphin Ferries is engaged in the domestic transport of
passengers by sea. During the taxable year 2021, the following revenues and expenses were
presented to you:
Philippine Philippine
Cheetah Dolphin
Gross receipts 4,000,000 2,000,000
Less: Cost of services (3,200,000) (1,400,000)
Gross income 800,000 600,000
Less: Allowable (500,000) (400,000)
Deductions
Taxable income 300,000 200,000
21. How much is income tax due?
a. 31,500
b. 55,000
c. 125,000
d. 460,000

22. Which of the following inherent powers of the state is inferior to constitutional right of
non-impairment clause of obligations or contracts?
a. Power of taxation
b. Police power
c. Power of eminent domain
d. None of the above

23. Pedro, Juan and Antonio are heirs of Luna who died on November 1, 2018. The
properties of Luna comprised solely of real property valued at P50M at the time of his
death. The property is subject to lease earning rental income. During 2019, the property
remained undivided and it derived a net rental income of P15M.
For income tax purposes, the heirs will be the tax on net rental income from the inherited property
for the year 2019 as:
a. Partners in a commercial partnership
b. Partners in a general professional partnership
c. Partners in an unregistered co-partnership
d. Co-owners

24. Based on the above problem, what amount should be reported as taxable income of
the co-ownership in 2019?
a. P50,000,000
b. P15,000,000
c. P14,980,000
d. P0

25. What is the final tax rate on cash dividend received by Resident Citizens from
domestic corporation?
a. 10%
b. 20%
c. 7.5%
d. 25%

26. Which of the following individual income taxpayers is taxable for his income from
within and without Philippine sources?
a. Resident citizen
b. Nonresident citizen
c. Resident alien
d. Nonresident alien

A taxpayer received the following items of income during the taxable year 2021:
Interest income from BPI – Pateros branch from checking 62,000
account
Interest from BDO – Intramuros branch from savings account 38,500
Interest income from PNB – Quiapo branch from foreign 42,000
currency deposit account under the expanded currency deposit
system
Interest income from dollar deposits on Bank of New Jersey in 130,000
 the United States
Interest income from promissory note of Mr X, Philippines 58,400
Interest income from promissory note of Mr X, United States 62,000
Yield from deposit substitute, Philippines 87,000
Interest from Philippine government securities 21,000
Interest income from long-term deposits, Philippines 57,000
Interest income from long-term deposits, Egypt 62,500
Royalties from books, Philippines 16,000
Royalties from paintings, Philippines 60,000
Royalties from musical compositions, Japan 50,000

27. If the taxpayer is a resident citizen, how much is the final withholding tax?
a. 57,400
b. 61,600
c. 63,200
d. 66,600

28. If the taxpayer is a resident citizen, how much income is subject to regular income
tax?
a. 300,400
b. 312,900
c. 304,500
d. 362,900

29. If the taxpayer is a non-resident citizen, how much is the final withholding tax?
a. 37,900
b. 51,100
c. 55,300
d. 61,600

30. If the taxpayer is a non-resident citizen, how much income is subject to regular
income tax?
a. 58,400
b. 100,400
c. 108,400
d. 120,400

31. Taxation is an inherent power of the State

a. Same as Police Power
b. Same as power of eminent domain
c. Same as a and b
d. None of the above

32. The power of taxation is also

a. Legislative because all the incidents of taxation are within the control of Congress
b. Exercise by the Executive Department being the department tasked to
implement tax laws
c. Judicial because the Court is also tasked to interpret tax laws
d. None of the above.

33. Under which basic principle of sound tax systems will the Government not incur any
deficit
 a. Fiscal adequacy
b. Administrative feasibility
c. Theoretical justice
d. Benefits Received Principle

34. The legal way of reducing tax liability is called

a. Tax avoidance
b. Tax exemption
c. Tax evasion
d. Tax amnesty

35. Which of the following is not a requisite in order that a sale of principal residence
would be excluded from taxation?
a. The tax exemption must be availed only by the individual for the first time
b. The proceeds of the sale will be used to purchase or construct a new principal
residence
c. The property should be the principal residence of the taxpayer
d. The taxpayer should apply for the exemption within a period of 30 days from the
time of sale.

36. Which of the inherent powers maybe exercised by public utility companies?
a. Police power
b. Eminent Domain
c. Tax evasion
d. A and C

37. 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 above

38. Sarah, a resident citizen, received PCSO winnings in 2021 amounting to P10,000.
What type of income tax will apply?
a. Final Withholding tax on passive income
b. Capital Gains Tax
c. Basic Income Tax
d. Exempt

39. Share in the net distributable income of a general co-partnership by a resident citizen is
subject to:
a. 10% Final Withholding tax
b. 20% Final Withholding tax
c. 6% Capital Gains Tax
d. Basic Income Tax

40. On January 2021, Snowy sold the following shares of stock of a domestic corporation
which he bought for investment purposes:

Listed and Traded Not Listed and Traded

Selling Price 300,000 160,000
Cost 192,000 50,000

How much is the capital gains tax?

 a. 13,080
b. 16,500
c. 32,700
d. 6,600

41. Assume that Snowy is a dealer in securities, the capital gains should be
a. 6,000
b. 6,480
c. 0
d. 6,600

42. Statement 1: The determination of 6% capital gains tax on sale of real property is
based on net capital gains realized by the seller of real property.
Statement 2: Sale of shares of stocks listed in the stock exchange is subject to 15% capital gains
tax.
a. Only Statement 1 is true
b. Only Statement 2 is true
c. Both statements are true
d. Both statements are not true

43. Kelly sold a parcel of lot for P5,000,000 to her friend. The FMV when she inherited it
from her mother was P4,500,000 although is present FMV is P 6,000,000. The tax on
the above transaction is:
a. 270,000 capital gains tax
b. Value Added Tax
c. 360,000 capital gains tax
d. 30% donor’s tax

44. Which of the following will disqualify a taxpayer in using the 8% income tax option?
a. The taxpayer has gross sales/receipts of P3,500,000.
b. The taxpayer is a registered self-employed individual
c. The taxpayer has a gross compensation income for the year.
d. The taxpayer is registered as professional.

45. The minimum wage earners are exempt from income tax on:
a. hazard pay
b. overtime pay
c. holiday pay
d. all of the above.

46. In general, the applicable rate in computing the fringe benefit tax beginning January 1,
2018 is
a. 35%
b. 25%
c. 32%
d. 30%

47. The following are the requirement for substituted filing of income tax return, except
a. He/ She had one employer only.
b. His/ Her income was purely compensation income.
c. He/ She had consecutively filed his/her income tax return for the past three years.
d. Income tax withheld by the employer is correct.
48. Income received by the estate during the period of administration or settlement of the
estate for tax purposes is knows as
a. income of the estate
b. income of the heirs
c. income of the devisee / legatee
d. income of testator

49. As a general rule, collection of taxes cannot be estopped by injunction except:

a. The Regional Trial Court grants injunction to restrain collection of internal
revenue tax.
b. The Supreme Court grants injunction to restrain collection of internal revenue
tax.
c. The Court of Tax Appeals grants injunction to restrain collection of internal revenue
tax.
d. The President grants injunction to restrain collection of internal revenue tax.

50. The following are elements of direct double taxation except

a. Taxing twice by the same authority, jurisdiction or taxing district
b. Taxing twice same kind or character of tax
c. Taxing twice the same rate
d. Taxing twice in the same year

51. Which among the sources of tax laws is given the highest priority?
a. Tax Treaties
b. 1987 Constitution
c. Tax Laws
d. Judicial Decisions

52. All of the following are considered Resident Aliens except

a. An alien who shall come to the Philippines with no definite intention as to
his/her stay.
b. An alien actually present in the Philippines who is not a sojourner or mere
transient.
c. An alien who comes to the Philippines for a definite purpose, which, by its
nature, would require an extended stay making his home temporarily in the
Philippines
d. An alien who marries a Filipino citizen

53. The following are considered as De Minimis Benefits except

a. Actual yearly medical benefits not exceeding P10,000 per annum.
b. Uniform and clothing allowance not exceeding P6,000 per annum
c. Monetized unused vacation leave credits of private employees not exceeding
twenty(20) days during the year.
d. Rice subsidy not exceeding P2,000 per month

54. Which of the following is not required to filed an Income Tax Return
a. Individuals deriving compensation from two or more employers during the
taxable year.
b. Individuals engaged in the practice of profession
c. An individual whose sole income has been subject to final withholding tax
d. Individuals deriving other non-business non-profession related income not
otherwise subject to final tax.
 55. Which of the following is subject to 15% final withholding tax on interest from a
depositary bank under the expanded foreign currency deposit system?
a. Non-Resident Citizen
b. Non-Resident Alien Not Engaged in Trade or Business
c. Overseas Filipino Workers
d. Resident Citizen

56. The following taxpayers who received dividend income from a domestic corporation
will receive net of 10% final withholding tax except
a. Resident Citizen
b. Non-resident alien engaged in trade or business
c. Non-resident citizen
d. Resident alien

57. The following are the allowed deductions to the income of the estate subject to income tax
a. ordinary business expenses related to the income of the estate
b. basic personal exemption
c. the amount of the income of the estate distributed to the beneficiary
d. A and C

58. The following are considered ordinary asset except

a. Principal residence of the business owner
b. stock in trade included in the inventory if on hand at the close of the taxable
year
c. Property primarily for sale to customers in the ordinary course of business
d. Property used in the trade or business, which are subject to depreciation

59. Being a legislative in nature, the power to tax may not be delegated except
a. To local governments or political subdivisions
b. When allowed by constitution
c. When delegation related merely to administrative implementation that may call for
some degree of discretionary powers under a set of sufficient standards
expressed by law or implied from the policy and purpose of the act.
d. All of the above

60. Due to his expertise, Architect Princess Choi (freelancer) was hired by a railways
contractor in Spain to provide technical assistance for two months from February to
march. She was hired again for the months of June-July and October-December of the
same taxable year. Arch. Princess is a
a. Resident Citizen
b. Non Resident citizen
c. Resident Alien
d. None of the above

1. Who is statutorily liable for the payment of VAT?

a. Seller
b. Buyer
c. Seller or buyer, at the option of the government
d. Seller and buyer

2. In order to be subject to the requirement of VAT registration, a business must have:

a. Gross sales or receipts exceeding P3,000,000
b. Gross sales or receipts at least P3,000,000
c. Gross sales or receipts, other than those that are exempt under Section 109, exceeding P3,000,000
d. Gross sales or receipts, other than those that are exempt under Section 109, at least P3,000,000

3. The VAT on importation is paid:

a. The non-resident seller monthly
b. The resident buyer monthly
c. The non-resident seller before release of goods from customs custody
d. The resident buyer before release of goods from customs custody
4. Gross selling price is the appropriate VAT base for:
a. Sale of goods or properties
b. Sale of services
c. Importation
d. Lease of properties

5. Gross receipts is the appropriate VAT base for all of the following, except:
a. Sale of services
b. Lease of properties
c. Sale of securities
d. Importation

6. Maria and Clara entered into a contract of sale of car. Negotiations were made on March 1, 2021. They were able to agree on
the price via text message on April 1, 2021. They signed the contract on May 1, 2021, and constructive delivery of the car was
made a week after on May 8, 2021. When shall VAT be recognized from the transaction?
a. March 1, 2021
b. April 1, 2021
c. May 1, 2021
d. May 8, 2021

7. In case of barter, sale, or exchange of real property, gross selling price means:
a. Zonal value or assessed value, whichever is higher
b. Fair market value or consideration, whichever is higher
c. Zonal value or consideration, whichever is higher
d. Appraised value or assessed value, whichever is higher

8. Which of the following is not a transaction deemed sale?

a. Retirement from or cessation of business
b. Change of ownership of the business
c. Incorporation of a single proprietorship
d. Change of control of a corporation by the acquisition of the controlling interest of such corporation by another
stockholder

9. Which of the following is a VAT-subject event?

a. Change in the trade or corporate name of the business
b. Approval of a request for cancellation of registration due to a desire to revert to exempt status after the lapse of
three consecutive years from the time of registration by a person who voluntarily registered
c. Merger of corporations
d. Consolidation of corporations

10. In order to be zero-rated, the sale and actual shipment of goods from the Philippines o a foreign country:
a. Must be paid for in Philippine pesos
b. Must be paid for in acceptable foreign currency
c. Must be FOB Shipping point
d. Must be FOB destination

11. Sale of which of the following products is not exempt from VAT?
a. Shrimp
b. Cactus
c. Raisins
 d. Bananas

12. Which of the following products is VAT exempt?

a. Rabbits
b. Dogs
c. Anacondas
d. Fighting cocks

13. Which of the following manufacturers/processors can claim presumptive input VAT?
a. Processor of salt
b. Processor of sardines
c. Processor of rice
d. Processor of eggs

14. In order to claim input VAT from purchases of services, the proper documentation is:
a. VAT invoice
b. VAT official receipt
c. VAT statement of account
d. VAT delivery receipt

15. Which of the following is not a characteristic of value added tax?

a. It is a tax on consumption.
b. It is a national tax.
c. It is a proportional tax.
d. It is a direct tax.

16. Which of the following lease of residential unit shall be subject to VAT?
a. Lease with monthly rental exceeding P15,000 but the annual aggregate of rentals does not exceed P3,000,000
b. Lease with monthly rental not exceeding P15,000 but the annual aggregate of rentals exceeds P3,000,000
c. Lease with monthly rental exceeding P15,000 and the annual aggregate of rentals exceeds P3,000,000
d. Lease with monthly rental not exceeding P15,000 and the annual aggregate of rentals does not exceed P3,000,000

17. How many days must lapse from the date of consignment to consignee in order for the consigned goods to be considered
transaction deemed sale to the consignor?
a. If actual sale to final consumer is not made within 30 days following the date such goods were consigned
b. If actual sale to final consumer is not made within 40 days following the date such goods were consigned
c. If actual sale to final consumer is not made within 50 days following the date such goods were consigned
d. If actual sale to final consumer is not made within 60 days following the date such goods were consigned

18. A senior citizen bought the following items:

I. A 60” flat screen UHD television
II. An iPhone 14 Pro Max 256Gb Deep Purple
In which of the following items is he entitled to VAT exemption?
a. I only
b. II only
c. Both I and II
d. Neither I nor II

19. The discounts granted to senior citizens and persons with disabilities may be claimed by establishments as:
a. Deductions from gross income
b. Income tax credit
c. Deductions from gross income or income tax credit, at the option of the taxpayer
d. Deductions from gross income and income tax credit, simultaneously

20. All of the following are included in the VATable base of imported articles, except:
a. Excise taxes
b. Commissions
c. Freight charges
d. Facilitation expense

1. Which of the following statements is not correct about percentage taxes?

a. It is a business tax
b. It is a transfer tax
c.
d. It is an ad valorem tax
e. It is not a progressive tax
 2. A seller of agricultural food products is VAT-exempt. His annual gross sales in 2018
amounted to P3,000,000. To what business tax is he liable?
a. 3% tax on VAT-exempt persons
b. 12% VAT
c. 3% common carrier’s tax
d. None of the above

(Use this data for numbers 3-6)

Ana has the following data for taxable year 2019:
Gross sales 2,850,000
Collections 1,420,000

3. If Ana is a seller of goods, her business tax for the year should be
a. P42,600 OPT
b. P85,500 OPT
c. P170,400 VAT
d. P342,000 VAT

4. If Ana is a seller of service, her business tax for the year should be
a. P42,600 OPT
b. P85,500 OPT
c. P170,400 VAT
d. P342,000 VAT

5. If Ana is VAT registered

a. She is subject to 12% VAT
b. She is subject to OPT under Section 116
c. She is subject to 12% VAT or 3% OPT, at her option
d. She is exempt from OPT under Section 116 if she opted to be taxed at 8%

6. If Ana is a taxi operator

a. She is subject to 12% VAT
b. She is subject to common carrier’s tax under Section 116
c. She is subject to 12% VAT or 3% common carrier’s tax, at her option
d. She is exempt from OPT if she opted to be taxed at 8%

7. Shares of stock held as investment when sold through the local stock exchange on or after
January 1, 2018 shall be subject to:
a. Percentage tax – 6/10 of 1% based on gross selling price or gross value in money
 b. VAT – 10% based on gross income
c. Capital gains tax of 15% on capital gain
d. Percentage on IPO – 4%, 2%, 1% based on gross selling price or gross value in
money

8. Gallaxy Corporation issued 10,000 shares, with par value of P100 per share, to Mr. Apolinario
Bobadilla for P150 per share. The transaction did not pass through the Philippine Stock
Exchange. How much is the capital gains tax on the sale?
a. P45,000
b. P25,000
c. P50,000
d. zero

9. All of the following except one are liable to 6/10 of 1% stock transaction tax. Which one
is not?
a. Individual taxpayers, whether citizens or aliens
b. Corporate taxpayers, whether domestic or foreign
c. Estates and trusts
d. Dealers in securities

10. Statement 1: Sale by a stock dealer of shares of stocks through the local stock
exchange is subject to the stock transaction tax.
Statement 2: Sale by a stock dealer of shares of stocks directly to a buyer is subject to the capital
gains tax.
a. Both statements are correct
b. Both statements are incorrect
c. Only the first statement is correct
d. Only the second statement is correct

11. One of the following statements is incorrect

a. Overseas communications tax is imposed on overseas communications
originating from the Philippines
b. The person liable to overseas communications tax may or may not be engaged in
any trade or business
c. The overseas communications tax is imposed whether the overseas
communications are made in the course of trade or business or not
d. The overseas communications tax is imposed on the owner of the communication
facilities used to make overseas communications

12. Which of the following statements is false?

a. BBC, an international news agency, is required to pay 10% percentage tax from messages
originating from the Philippines by telephone or telegraph
b. Amounts paid for messages transmitted by an embassy and consular offices of a
foreign government is not subject to 10% overseas communications tax
c. Overseas communications initiated by a resident citizen not engaged in trade or
business is subject to overseas communication tax
d. None of the above

13. A right or privilege granted by the State to a person, individual, or corporation, to operate a
public utility such as radio broadcasting, television station, electric light system, telephone
company, gas and water utilities
a. Franchise
b. Common carriers
c. Dealers in securities
d. Lending investors

14. Which of the following franchise grantees is subject to franchise tax?

 a. Franchise on radio and/or television broadcasting companies the annual gross
receipts in the preceding year exceed P10,000,000
b. Franchise on gas and water utilities
c. Franchise on toll road operations
d. PAGCOR and its licensees and franchisees

15. A person whose business is to keep automobiles for hire or keep them stored for use or
order
a. Keepers of garage
b. Common carrier
c. Taxicab operator
d. Tourist bus operator

16. A keeper of garage whose gross receipts for 2020 exceed P3,000,000 is subject to:
a. VAT
b. Garage sales tax
c. Common carrier’s tax
d. Franchise tax

17. Statement 1: The gross receipts of common carriers derived from their incoming and
outgoing freight shall not be subject to the local taxes imposed under RA 7160, otherwise
known as Local Government Code of 1991.
Statement 2: The 3% common carrier’s tax is based on the actual quarterly gross receipts or
minimum quarterly receipt whichever is lower.
a. Only Statement 1 is correct
b. Only Statement 2 is correct
c. Both statements are correct
d. Both statements are incorrect

18. The taxpayer is a trader of poultry feeds. Determine his applicable business tax.
a. Subject to 12% VAT
b. VAT-exempt but subject to 3% OPT under Section 116
c. 12% VAT or 3% OPT, at his option
d. Exempt from 12% VAT and OPT

19. Which of the following is subject to 3% percentage tax under Section 116 of the Tax
Code?
a. Fruit dealer whose gross receipts for the year amounted to P2,800,000 only
b. An individual taxpayer whose gross sales for the year amounted to P100,000
c. School bus operator whose gross receipts for the year amounted to P2,500,000
d. None of the above

20. Which of the following is subject to three percent OPT?

a. Establishments whose annual gross sales or receipts exceed P3,000,000 and who
are VAT registered
b. Businesses whose annual gross sales or receipts exceed P3,000,000 and who are
not VAT-registered
c. VAT registered establishments whose annual gross sales or receipts do not
exceed P3,000,000
d. Establishments whose annual gross sales or receipts do not exceed P3,000,000 and
who are not VAT registered

(Use the following details for number 21 and 22)

Isarog is a VAT-registered common carrier with passenger buses and cargo trucks. For the month of June
2020, it had the following data on revenues and receipts, taxes not included:
- For transporting passengers, gross revenues and receipts of P330,000
- For transporting cargoes, gross revenues of P220,000, of which P200,000 was
received
 - For renting out to the MMDA its towing trucks, gross receipts of P50,000, representing
P10,000 from gross revenue of the quarter ending March 31 and P40,000 for the month of
June

21. The percentage tax is:

a. P1,500
b. P9,900
c. P15,900
d. P17,400

22. The value-added tax is:

a. P24,000
b. P30,000
c. P28,800
d. P25,000

23. is a pool of land transportation vehicles whose accessibility to the riding

public is facilitated through the use of common point of contract which may be in the form of
text, telephone and/or cellular calls, email, mobile applications or by other means.
a. Domestic common carriers
b. International carriers
c. Transportation network vehicle services (TNVS)
d. Partners

24. Statement 1: Domestic common carriers are subject to 0% on its freight originating from
abroad to the Philippines.
Statement 2: Resident international carriers are subject to the 0% VAT on its gross Philippine
billings on flight originating from the Philippines to a foreign destination.
Statement Statement
1 2
A True True
B True False
C False False
D False True

25. The owner(s) of the vehicles, other than TNVS, used in transporting passengers
and/or goods in TNVS shall be referred herein as .
a. Domestic common carriers
b. International carriers
c. Transportation network vehicle services (TNVS)
d. Partners

(Use the following data on items 26-28)

A franchisee, had the following data on revenues and receivables in 2020:
Quarter ending March 31, Revenues AR, beg AR, end
2020
Covered by the franchise 4,000,000 600,000 800,000
Not covered by the franchise 1,200,000 - 160,000

26. If the franchisee is generating and selling electricity, the correct amount of business tax
is:
a. P200,800
b. P456,000
c. P580,800
d. P238,800
27. If the franchisee is a gas and water utilities, the correct amount of business tax is:
a. P200,800
b. P456,000
c. P580,800
d. P238,800

28. If the franchisee is a radio and/or television broadcasting company, the correct amount of
business tax is:
a. P200,800
b. P456,000
c. P580,800
d. P238,800

29. Which of the following is subject to Other Percentage Taxes?

I. Banks
II. Financing/Credit Companies
III. Pawnshops
IV. Duly registered Credit Cooperatives
a. I and II only
b. I, II and III only
c. I, II, III and IV
d. None of the above

30. Banko Natin sold a repossessed car to JJ at P1,000,000. Banko Natin is

I. Subject to VAT
II. Subject to gross receipts tax of 7%
III. Subject to regular corporate income tax
a. III only
b. I and III only
c. II and III only
d. None of the above

31. Maharlika Bank purchased machineries from a VAT supplier. What is the treatment for VAT
purposes of the sale transaction considering that banks are subject to percentage taxes under
Section 121 of the Tax Code?
a. 0% VAT
b. 12% VAT
c. Exempt from VAT
d. Percentage tax

32. A pawnshop, for business tax purposes

a. Is treated as a lending investor liable to 12% VAT on its gross receipts from interest
income and from gross selling price from sale of unclaimed properties
b. Is not treated as a lending investor but liable to 5% gross receipts tax under Section 122
of the Tax Code on its gross receipts from interest income and from gross selling price
from sale of unclaimed properties
 c. Is exempt from 12% VAT and OPT
d. Is subject to 12% VAT and OPT

33. Pedro executed on January 1, 2016, a long-term loan from PRTC Bank in the amount of
P6,000,000 payable within 10 years, with an annual interest of 2%. However, on January 31,
2020, the loan was pre-terminated. Assuming PRTC Bank declared correctly the interest from
2016 to 2019 and the applicable gross receipts taxes were paid, how much gross receipts tax
should be paid for the year 2020?
a. P100
b. P24,500
c. P19,700
d. P500

34. China Bank extended loans to its debtors during the year, with real properties of the debtors
being used as collateral to secure the loans. When the debtors failed to pay the unpaid
principal and interest after several demand letters, the bank foreclosed the same and entered
into contracts of lease with tenants. The bank is subject to business tax as follows:
I. 12% VAT
II. 7% gross receipts tax
a. I only
b. II only
c. Both I and II only
d. Neither I nor II

35. Statement 1: The tax on life insurance premiums is 2% upon the total premiums collected
whether such premiums are paid in money, notes, credits, or any substitute for money.
Statement 2: The tax on agents of foreign insurance companies is 4% based upon the total premiums
collected.
a. Both statements are correct
b. Both statements are incorrect
c. Only the first statement is correct
d. Only the second statement is correct

36. Statement 1: All insurance premium collected by life insurance company is subject to 2% gross
receipt tax.
Statement 2: A life insurance premium refunded within six months is not subject to a 2% percentage
tax.
a. Both statements are correct
b. Both statements are incorrect
c. Only the first statement is correct
d. Only the second statement is correct

37. The operator of one of the following places is not subject to amusement tax.
a. Cockpits
b. Racetracks
c. Bowling alleys
d. Karaoke joints
38. A tax on the right or privilege to enter places of amusement
a. VAT
b. Franchise tax
c. Amusement tax
d. Income tax
 39. Pedro wants to procure fire insurance for his Mansion in Forbes Park, Makati from Gallaxy
Insurance Company, a non-resident foreign corporation, through its agent in the Philippines,
G.I. Joe. He paid premiums in 2018 amounting to P500,000. How much is the premiums tax
payable on the transaction?
a. P10,000
b. P20,000
c. P25,000
d. P50,000

40. One of the following is an incorrect amusement tax rate:

a. Jai-alai and racetracks – 30%
b. Cockpits, cabarets, night and day clubs – 18%
c. Professional basketball games – 15%
d. Boxing exhibitions – 12%

41. Gross receipts for amusement tax shall include all the following except one. Which one is it?
a. Income from television, radio, and motion picture rights
b. Income from sale of tickets
c. Income from sale of food and refreshments within the amusement places
d. Income from sale of food and refreshments outside the amusement places

(Use the data below for Items 42 and 43)

Zirkoh, a comedy bar, had the following data during the month of March 2020: Net income
during the month 160,000
Collections during the month:
From services rendered in January 200,000
From services rendered in February 1,200,000 From
services to be performed in March 40,000

42. How much is the amusement tax for the month?

a. P216,000
b. P252,000
c. P259,200
d. P288,000

43. How much is the amusement tax for the month if Zirkoh is a racetrack?
a. P60,000
b. P360,000
c. P432,000
d. P480,000

44. The Percentage Tax on Winnings is imposed on the winnings of bettors in:
a. Cockfighting
b. Horse race
c. Jai-alai
d. Boxing

45. Boxing exhibitions shall be exempt from amusement tax when the following conditions are
present:
a. Involves World or Oriental championships in any division
b. One of the contenders is a citizen of the Philippines
c. Promoted by citizens of the Philippines or by a corporation or association at least
60% of the capital is owned by Filipino citizens
 d. All of the conditions above must be satisfied

46. Mang Jose, a horse owner, received gross winnings of P120,000 during the current
month. His tax on winnings should be:
a. P6,000
b. P12,000
c. P18,000
d. P24,000

47. Statement 1: The 10% tax on winnings is based on actual amount paid to the winner.
Statement 2: The rate of tax on winnings in case of double, forecast/quinella and trifecta
shall be 4%.
a. Both statements are correct
b. Both statements are incorrect
c. Only the first statement is correct
d. Only the second statement is correct

48. Primary offering of shares by the issuing corporation (issuance during initial public
offering) shall be subject to
a. Percentage tax – 6/10 of 1% based on gross selling price or gross value in
money
b. Capital gains tax of 15% on capital gains
c. Percentage on IPO – 4%, 2%, 1% based on gross selling price or gross value in money
d. No business tax but subject to documentary stamp tax (DST)

49. Which of the following percentage taxes is paid on a quarterly basis upon effectively of the
TRAIN Law?
I. Tax on overseas dispatch, message, or conversation originating from the
Philippines
II. Amusement taxes
III. Stock transaction tax
IV. Percentage tax on international carriers
a. I and II only
b. III and IV only
c. I, II, and IV only
d. I, II, III, and IV

50. One of the following statements is wrong. Operators of transport facilities are:
a. Subject to VAT on gross receipts from transport of passengers
b. Subject to VAT on gross receipts from transporting goods and cargoes
c. Subject to percentage tax on gross receipts from transporting passengers
d. Subject to the VAT on gross receipts from renting out its transportation facilities

DONORS

1. The time within which to file the donor’s tax return.

a. Upon payment of the donor’s tax
b. Within 30 days from donation
c. Within 1 year from donation
d. Upon acceptance by donee
2. The period within which to pay the donor’s tax.
a. Upon filing of the donor’s tax return
b. Within 1 month from donation
c. Within 1 year from donation
d. Upon acceptance by donee
3. Valuation of the Cash:
a. Face amount
b. Exchange rate
c. Fair value
d. Valuation as determined by the Commissioner

4. The following are the information in the trading of stocks of ABC Corp., a listed company:
 Per Share Friday Saturday Sunday Monday
Opening value 300 600
Closing value 600 400
Highest value 500 800
Lowest value 200 100
Average price 250 300
Assuming Nicanor dies on Friday, the value to be used in computing gross estate is?
a. 350
b. 250
c. 450
d. 600

5. Assuming Nicanor dies on Sunday, the value to be used in computing gross estate is?
a. 300
b. 500
c. 450
d. 400
6. Joshua orally donated a land worth P 3,000,000 to Bulet.
S1: The land received by Bulet is an income.
S2: The land received by Bulet is subject to Income tax.
a. Only S1 is true
b. Only S2 is true
c. Both are true
d. Both are false
7. S1 - Donations made by husbands and wife out of their common property is deemed made by each; hence, both
shall prepare separate Donor’s Tax Return and claim separate deductions.
S2 - If what was donated is a conjugal or community property, only the person who signed the Deed is
subject to donor’s tax without prejudice to the right of the other spouse to question the validity of the
donation without her consent.
a. Only S1 is true
b. Only S2 is true
c. Both are true
d. Both false
8. Nicanor donated the following properties in 2022:
Land to Department of Education for construction of Acquisition cost – Php 5,000,000.00 Zonal
elementary school value – Php 4,000,000.00
Assessor’s fair value – Php 3,000,000.00 Prevailing
market rate – Php 10,000,000.00
Land to Saint Nichols Academia, his alma mater in Acquisition cost – Php 1,000,000.00 Zonal
high school, a private non-stock, non- value – Php 3,000,000.00
profit institution Assessor’s fair value – Php 2,000,000.00
Cash to Mahal Kita Foundation, accredited by Php 1,000,000.00
Philippine Council for NGO Certification
Cash to a priest Php 1,000,000.00
How much is the donor’s tax?
a. Php 45,000.00
b. Php 225,000.00
c. Php 285,000.00
d. Php 525,000.00
9. The time within which to file the donor’s tax return.
a. Upon payment of the donor’s tax
b. Within 30 days from donation
c. Within 1 year from donation
d. Upon acceptance by donee
10. The period within which to pay the donor’s tax.
a. Upon filing of the donor’s tax return
b. Within 1 month from donation
c. Within 1 year from donation
d. Upon acceptance by donee
11. Valuation of the Cash:
a. Face amount
b. Exchange rate
c. Fair value
d. Valuation as determined by the Commissioner

12. The following are the information in the trading of stocks of ABC Corp., a listed company:

Per Share Friday Saturday Sunday Monday

Opening value 300 600
 Closing value 600 400
Highest value 500 800
Lowest value 200 100
Average price 250 300
Assuming Nicanor dies on Friday, the value to be used in computing gross estate is?
a. 350
b. 250
c. 450
d. 600

13. Assuming Nicanor dies on Sunday, the value to be used in computing gross estate is?
a. 300
b. 500
c. 450
d. 400
14. Joshua orally donated a land worth P 3,000,000 to Bulet.
S1: The land received by Bulet is an income.
S2: The land received by Bulet is subject to Income tax.
a. Only S1 is true
b. Only S2 is true
c. Both are true
d. Both are false
15. S1 - Donations made by husbands and wife out of their common property is deemed made by each; hence, both
shall prepare separate Donor’s Tax Return and claim separate deductions.
S2 - If what was donated is a conjugal or community property, only the person who signed the Deed is
subject to donor’s tax without prejudice to the right of the other spouse to question the validity of the
donation without her consent.
a. Only S1 is true
b. Only S2 is true
c. Both are true
d. Both false
16. Nicanor donated the following properties in 2022:
Land to Department of Education for construction of Acquisition cost – Php 5,000,000.00 Zonal
elementary school value – Php 4,000,000.00
Assessor’s fair value – Php 3,000,000.00 Prevailing
market rate – Php 10,000,000.00
Land to Saint Nichols Academia, his alma mater in Acquisition cost – Php 1,000,000.00 Zonal
high school, a private non-stock, non- value – Php 3,000,000.00
profit institution Assessor’s fair value – Php 2,000,000.00
Cash to Mahal Kita Foundation, accredited by Php 1,000,000.00
Philippine Council for NGO Certification
Cash to a priest Php 1,000,000.00
How much is the donor’s tax?
a. Php 45,000.00
b. Php 225,000.00
c. Php 285,000.00
d. Php 525,000.00

ESTATE

1. Nicanor wrote a will promising his son Junior to give him everything he owns provided he become a Certified
Public Accountant. Nicanor became a Vlogger. Upon Nicanor’s death, what kind of succession this one
will fall?
a. Mixed succession
b. Testamentary succession
c. Legal or Intestate succession
2. If the will is signed but not dated, the kind of succession will be?
a. Legal or Intestate succession
b. Mixed succession
c. Testamentary succession
3. If the will is signed and dated but has no witnesses, the kind of succession will be?
a. Legal or Intestate succession
b. Mixed succession
c. Testamentary succession
4. S1 - Estate tax is a direct tax.
S2 - Estate tax is a privilege
tax.
a. S1 is true
b. S2 is true
c. Both are true
 d. Both are false
5. S1 - Estate tax is a proportional tax.
S2- Estate tax is a national internal revenue tax.
a. S1 is true
b. S2 is true
c. Both are true
d. Both are false
6. S1 - Estate tax is a tax on the transmission of estate upon death by the decedent to his beneficiaries. S2 - In
all types of decedents, the basis of estate tax is net estate or net taxable estate.
a. S1 is true
b. S2 is true
c. Both are true
d. Both are false
7. S1 - Nicanor died. The executor, administrator or any of the heirs are required to inform the BIR of such fact
within 30 days from date of death.
S2 - Nicanor donated his delivery van to the ABC Foundation, a non-stock, non-profit organization but
reserved his right to use the same until such time he needs it. Upon death of Nicanor, the donation is
no longer part of the estate if deed of donation is notarized.
a. S1 is true
b. S2 is true
c. Both are true
d. Both are false
8. S1 - Nicanor sold his house and lot for Php 5,000,000.00 which is the fair market value of the property. Upon his
death, no amount attributable to the property will form part of the estate.
S2 - Standard deduction is automatic and requires no proof.
a. S1 is true
b. S2 is true
c. Both are true
d. Both are false
9. Nicanor has a house and lot which he acquired by virtue of donation from his parents ten years ago. At the value
at the time is Php 1 Million. Value of the lot as prescribed by the City assessor is at Php 2,000,000.00 while the
house is at Php 3,000,000. The zonal value in the BIR website is Php 4,000,000.00. The house and lot was
mortgaged for Php 10,000,000. Nicanor had the property appraised in 2020 at Php 15,000,000.00. The value of
the house and lot assuming Nicanor died in 2021 is?
a. Php 7M
b. Php 15M
c. Php 10M

d. Php 5M
10. A house and lot located in the United States is valued at Php 2,000,000.00. The property will not form part of the
gross estate if taxpayer is a/an ?
a. NRA Decedent
b. RA Decedent
c. RC Decedent
d. NRC Decedent
11. Nicanor bought a car ten years ago costing Php 1,000,000.00. For income tax purposes, the car is full
depreciated. Scrap value is 10% of cost as indicated in records. A person engaged in buying and selling valued
the property at Php 70,000. A buyer is willing to pay for Php 50,000.00. What is the value to be used in computing
estate tax?
a. Php 70,000
b. Php 50,000
c. Php 100,000
d. Php 0
12. Nicanor bought 1,000 common shares of stocks in ABC Corp. (an unlisted domestic corporation) with 1,000 par
value, amounting to Php 1,000,000.00 during his lifetime. Audited FS of ABC Corp. showed Assets of Php
500,000,000 and Liabilities of Php 300,000,000 with 100,000 shares outstanding. The value of each share for
estate tax purposes is?
a. Php 2,000
b. Php 1,000
c. Php 5,000
d. Php 2,000,000
13. Nicanor bought 1,000 common shares of stocks in XYZ Corp. (a listed domestic corporation) during his lifetime.
Value at time of death is Php 1,000 per share. During trading, highest value is Php 2,000 while lowest value is Php
500.00. Opening price is Php 1,500 while closing price is Php 1,200. The value of each share is?
a. Php 1,000
b. Php 1,250
c. Php 1,350
d. Php 2,000
14. Nicanor was a partner in the ABC and Co., CPAs, a general professional partnership (GPP). The net asset of the
GPP is Php 10,000,000.00, 25% of which is the share of Nicanor. The share of Nicanor is called?
a. Decedent’s interest
 b. Personal property
c. Revocable transfer
d. Estate
15. If Nicanor died today, how much is the minimum deduction allowed by law?
a. Php 5 Million
b. Php 10 Million
c. Php 0
d. Php 15 Million
16. Accountant’s and lawyer’s fees spent during settlement of estate, though non-deductible, are in the nature
of?
a. Judicial expenses
b. Funeral expenses
c. Deductions from gross estate
d. Medical expenses
17. Short-term money market placements (investments) before marriage are:
Classification Absolute Community Conjugal Partnership of Gains
S1 Community Exclusive
S2 Community Conjugal
S3 Exclusive Conjugal
S4 Exclusive Exclusive
Which is TRUE?
a. S1
b. S2
c. S3
d. S4
18. At the time Nicanor is married to Inday, he inherited a condominium. The condominium is:
Classification Absolute Community Conjugal Partnership of Gains
S1 Community Exclusive
S2 Community Conjugal
S3 Exclusive Conjugal
 S4 Exclusive Exclusive
Which is TRUE?
a. S1
b. S2
c. S3
d. S4
19. If the spouses got married on May 22, 2021, which is FALSE?
a. The property regime is Absolute Community of Property if the spouses have no pre-nuptial
agreement
b. The property regime is Conjugal Partnership of Gains if the spouses agreed on the regime after
marriage
c. The property regime is absolute separation if the future spouses agree on it
d. The spouses may apply the local customs in their locality
20. S1 – In Conjugal Partnership of Gains (CPG), the regime shall be governed by the contract of
partnership
S2 – In Absolute Community of Property (ACP), the regime shall be governed by the rules on co-
ownership
a. S1 is true
b. S2 is true
c. Both are true
d. Both are false
21. S1 – In Conjugal Partnership of Gains (CPG), any property owned by the spouses prior to marriage shall
be conjugal after marriage.
S2 – In Absolute Community of Property (ACP), any property owned by the spouses before marriage shall
be community after marriage.
a. S1 is true
b. S2 is true
c. Both are true
d. Both are false
22. S1 – In Conjugal Partnership of Gains (CPG), the fruits of exclusive property are exclusive
S2 – In Absolute Community of Property (ACP), the fruits of exclusive property are exclusive
a. S1 is true
b. S2 is true
c. Both are true
d. Both are false
23. S1 – In Conjugal Partnership of Gains (CPG), the fruits of conjugal property are conjugal
S2 – In Absolute Community of Property (ACP), the fruits of community property are community
a. S1 is true
b. S2 is true
c. Both are true
d. Both are false
24. Nicanor is married to Inday but is cohabiting with Duday. During the period of cohabitation with Duday,
Nicanor bought a house in the amount of Php 5M. Duday took care of the household. Which is TRUE? The
property shall redound to the benefit of
a. Nicanor and Inday
b. Nicanor only
c. Nicanor and Duday
d. Inday only as the aggrieved spouse
25. Nicanor and Inday, both single decided to live in together. During the period of cohabitation Nicanor bought
a house in the amount of Php 5M. Inday took care of the household. Which is TRUE? The property shall
redound to the benefit of
a. Nicanor and Inday
b. Nicanor only
c. Inday only
d. The compulsory heirs of Nicanor
26. The following intangible personal properties have situs within the Philippines, except: S1 -
Franchise which is exercised in the Philippines
S2 - Shares of stocks of domestic corporations
S3 - Bonds of foreign corporations 90% of the business is located in the Philippines S4
- Shares in any business established in the Philippines
a. S1
b. S2
c. S3
d. S4
 e. None is FALSE
27. When is the deadline of the filing of estate tax return if the decedent died on February 28, 2021?
a. February 28, 2022
b. March 1, 2022
c. February 27, 2022
d. August 28, 2021
28. The following are the information in the trading of stocks of ABC Corp., a listed company:
Per Share Friday Saturday Sunday Monday
Opening value 300 600
Closing value 600 400
Highest value 500 800
Lowest value 200 100
Average price 250 300
Assuming Nicanor dies on Friday, the value to be used in computing gross estate is?
a. 350
b. 250
c. 450
d. 600
29. Assuming Nicanor dies on Sunday, the value to be used in computing gross estate is?
a. 300
b. 500
c. 450
d. 400
30. Which is FALSE in losses? The value of the property is Php 10 Million and Nicanor died on March 31, 2020.
S1 – If the insurance company paid the amount of Php 10 Million, no loss is deductible
S2 – If the insurance company paid the amount of Php 5 Million, Php 5 Million is deductible S3
– If taxpayer claimed the loss as a deduction from gross income, loss is no longer
deductible for estate tax purposes
S4 – If loss is incurred after March 31, 2020, no loss is deductible
a. S1
b. S2
c. S3
d. S4
e. All are true
31. Which is deductible claims against the estate assuming Nicanor died in October 10, 2021? S1 –
Nicanor borrowed Php 100,000 from Inday but there is no written agreement
S2 – Nicanor borrowed money from his mother Inday. Money was given and a loan agreement was
executed
S3 – Nicanor guaranteed the loan of Inday who failed to pay her obligation.
S4 – Nicanor borrowed money from Inday with the loan agreement dated October 10, 2011.
a. S1, S2, S3
b. S2, S4
c. S3, S4
d. S4 only
e. All are NOT deductible

32. Which is TRUE in family home?

S1 – If the decedent is married and classification of family home is Conjugal and the value is
Php 7,000,000, the allowable family home is Php 3,500,000
S2 – If the decedent is married and classification of lot is Exclusive with value of Php 5,000,000
and the value of conjugal house is Php 5,000,000, the allowable family home is Php
10,000,000
a. S1 is true
b. S2 is true
c. Both are true
d. Both are false
33. Which is TRUE? Filing of estate tax return is required
S1 – If the estate is subject to tax
S2 – If the property is registrable even if no tax is to be paid
a. S1 is true
b. S2 is true
c. Both are true
d. Both are false
 34. Which is TRUE in filing of estate tax return?
S1 – If the deductions are higher than the gross estate, the estate is not required to file
S2 – If the property is not registrable property and no estate tax accrues therefrom, filing is not required
a. S1 is true
b. S2 is true
c. Both are true
d. Both are false
35. Nicanor grew up in Pampanga. He works in Makati City. He lives in a rented apartment in Pasay City. He
suffered an accident and died in Quezon City. Where is the venue of filing the estate tax return?
a. Pampanga
b. Makati City
c. Quezon City
d. Pasay City
36. Which is TRUE?
S1 – Payment of estate tax is generally upon filing of estate tax return
S2 – The Commissioner can extend for ten (10) days the request for extension to file estate tax return if
he finds the request meritorious cases
a. S1 is true
b. S2 is true
c. Both are true
d. Both are false
37. Which is TRUE?
S1 –Payment of estate tax can be extended by the Commissioner up to 5 years if settled judicially. S2
– Payment of estate tax can be extended by the Commissioner up to 2 years if settled between
families.
a. S1 is true
b. S2 is true
c. Both are true
d. Both are false
38. Which is TRUE?
S1 – If request for extension is due to negligence, no extension will be approved. S2
– CPA Certificate is required if net estate exceeds Php 5,000,000.
a. S1 is true
b. S2 is true
c. Both are true
d. Both are false
39. Which is TRUE?
S1 – The primary liability to pay estate tax is vested with the executor, administrator or heirs.
S2 – Heirs are liable for the payment of that portion of the estate which his distributive share bears to the
value of the total net estate.
a. S1 is true
b. S2 is true
c. Both are true
d. Both are false
40. Nicanor, a 90-year old bachelor, was advised by his friend to sell the house and lot since he is old already
and just enjoy the fruits of his labor. The details of the property is hereunder provided:

Zonal value of land – Php 5,000,000

Assessor’s fair value of land – Php 3,000,000
Assessor’s fair value of house – Php 5,000,000
Value per independent appraiser – Php
15,000,000

Fearing nearing death, Nicanor sold the property at Php 10,000,000. Assuming Nicanor died a few days after the
sale, how much is the transfer in contemplation of death subject to estate tax?
a. Php 0
b. Php 3 Million
c. Php 5 Million
d. Php 10 Million
41. How much is the transfer for insufficient consideration subject to estate tax if he sold the property at Php
5,000,000 only?
a. Php 0
b. Php 3 Million
c. Php 5 Million
 d. Php 10 Million
42. On May 22, 2010, Nicanor bought house and lot valued at Php 10,000,000 paying 20% down-payment with the
balance payable in 10 years. On September 30, 2019, Nicanor died. The fair market value at the time of death
is Php 12,000,000. Inday, the sole heir, after paying the corresponding estate tax, acquired the property and
assumed the mortgage balance of Php 1,000,000. In August 2021, Inday died. At the time of her death, the
balance of the mortgage is Php 600,000.

Inday’s total gross estate is Php 15,000,000 including the house and lot she inherited from Nicanor
which was valued at Php 13,000,000.

The following are expenses / deductions paid/payable to be taken from the estate
Unpaid mortgage – Php 600,000
Losses – Php 500,000
Total unpaid taxes – Php 100,000
Claims by hospitals on unpaid medical bills – Php 1,000,000
Donation to the City Government for Public Use – Php 1,000,000
The Vanishing Deduction is?
a. Php 0
b. Php 1,797,733
c. Php 1,865,987
d. Php 1,979,733
43. How much is the total allowable (ordinary and special deductions) on the estate of Inday?
a. Php 8,684,943
b. Php 9,179,733
c. Php 9,719,733
d. Php 10,143,673
44. The executor of Nicanor, a Filipino citizen based in Canada, provided details of his properties in
connection with the processing and payment of his estate tax:

Philippines Canada
Gross estate 5,000,000 10,000,000
Allowable Deductions 5,000,000 5,000,000
Net estate 0 5,000,000
Estate tax paid Php 500,000

How much is the ESTATE TAX PAYABLE?

a. Php 0
b. Php 100,000
c. Php 200,000
d. Php 300,000
45. Nicanor, single and Filipino citizen, died 2020. The list of his properties is given below:

House and lot (family home) – Php 10,000,000

Cash in bank – Php 5,000,000
Personal properties – Php 5,000,000

During settlement of estate, the following information was known:

Funeral and judicial expenses – Php 200,000
Claims against estate (unpaid medical expenses) Php 3,000,000
Claims against the estate (loan) – Php 2,000,000
Losses as a result of the fire – Php 2,000,000
The estate tax due is?
a. Php 0
b. Php 60,000
c. Php 360,000
d. Php 180,000

46. Nicanor, who died in 2020, is survived by Inday, his wife and JR and RJ. The list of his properties is given
below:

Conjugal Properties
Cash in bank – Php 5,000,000
Conjugal personal properties – Php 5,000,000
House and lot (family home) – Php
20,000,000
 Exclusive Personal properties – Php 5,000,000

During settlement of estate, the following community expenses/liabilities were provided: Claims
against estate (unpaid medical expenses) Php 3,000,000
Claims against the estate (loan) – Php 2,000,000
Claims against the estate (unpaid funeral expenses) – Php 500,000
Funeral and judicial expenses – Php 500,000
Losses as a result of the fire – Php
2,000,000 The estate tax due is?
a. Php 180,000
b. Php 270,000
c. Php 540,000
d. Php 960,000
47. Nicanor left the following bank deposits upon his death:
Uno Bank – Php 1,000,000
Dos Bank – Php 2,000,000
Tri Bank – Php
3,000,000
How much is the estate tax?
a. Php 0
b. Php 360,000
c. Php 5,000
d. Php 60,000
48. Nicanor left the following bank deposits upon his death:
Uno Bank – Php 1,000,000
Dos Bank – Php 2,000,000
Tri Bank – Php
3,000,000
How much is the final tax required to be withheld by the bank assuming the heirs will opt for final tax?
a. Php 0
b. Php 60,000
c. Php 360,000
d. The deposits are not subject to final tax
49. Nicanor left the following bank deposits upon his death:
Uno Bank – Php 1,000,000
Dos Bank – Php 2,000,000
Tri Bank – Php
3,000,000
How much is the amount to be reported as part of gross estate assuming the heirs of Nicanor will opt
for final tax?
a. Php 0
b. Php 1,000,000
c. Php 2,000,000
d. Php 6,000,000
50. Which is FALSE in estate taxation of bank deposits?
S1 – At the option of the executor, administrator or heirs, bank deposits of decedents may be subjected to
6% final tax at any time from decedent’s death.
S2 – If the bank deposits were subjected to final tax, the deposits shall no longer form part of the gross estate of
the decedent.
S3 – In case of joint deposits, only that share or interest of decedent is subject to either final tax or estate tax.
S4 - In all cases, the final tax withheld shall not be refunded but may be credited from the tax due in instances where
the bank deposit account subjected to final tax has been actually included in the gross estate declared in the
estate tax return of the decedent.
a. S1
b. S2
c. S3
d. S4

51. Inday provided you the list of the estate of Nicanor who died intestate on February 14, 2023. The
following are the details:

Properties:
 Family home – Php 15,000,000.00
 Inherited land – Php 5,000,000.00
 1000 Shares in ABC Corp. an unlisted company – 5,000,000.00
 Bank deposits – Php 5,000,000.00
  Motor vehicles – Php
5,000,000.00 Other information:
 Funeral Expenses – Php 1,000,000.00
 Loss incurred on February 13, 2023 – Php 1,000,000.00

How much is the estate tax due?

a. Php 150,000.00
b. Php 300,000.00
c. Php 450,000.00
d. Php 750,000.00

GEN principles

1. To provide funds or property with which to promote the general welfare and protection of its citizens and to enable it to
finance public expenditure is the:
a. Importance of taxation
b. Lifeblood theory
c. Primary purpose of taxation
d. Secondary purpose of taxation
2. The primary purpose of taxation is to:
a. Prevent inflation
b. Protect local industries
c. Provide revenue for the State
d. Reduce inequalities and wealth
3. The power of taxation proceeds upon a this theory that the existence of the government is a necessity; that it cannot continue
without means to pay its expenses; and that it has a right to compel all its citizens and property within the its limits to
contribute.
a. Benefit-received theory
b. Doctrine of symbiotic relationship
c. Lifeblood doctrine
d. Theory of relativity
4. As to subject matter, it is a tax imposed upon the performance of an act, the enjoyment if a privilege or the engaging
in an occupation.
a. Ad valorem tax
b. Excise or privilege tax
c. Personal, poll or capitation tax
d. Property tax
5. The basis of taxation is found on the reciprocal duties of protection and support between the State and its
inhabitants. This theory is otherwise known:
a. Benefit-received theory
b. Doctrine of symbiotic relationship
c. Lifeblood doctrine
d. Theory of relativity
6. The tax laws should be capable of convenient, just and effective administration:
a. Administrative Feasibility
b. Fiscal Adequacy
 c. Theoretical Justice
d. Uniformity
7. The sources of revenue should be sufficient to meet the demands of public expenditures:
a. Administrative Feasibility
b. Equality
c. Fiscal Adequacy
d. Theoretical Justice
8. The tax burden should be proportionate to the taxpayer’s ability to pay.
a. Administrative Feasibility
b. Fiscal Adequacy
c. Theoretical Justice
d. Uniformity
9. Theoretical justice is the:
a. Ability to pay theory
b. Due process clause
c. Equal protection of the laws
d. Uniformity of taxation
10. Generally, the power of taxation can only levied by:
a. Bureau of Internal Revenue and Bureau of Customs
b. Congress of the Philippines
c. The Executive Department
d. The Judiciary
11. The actual effort exerted by the government to effect the exaction of what is due from the taxpayer is known as
a. assessment
b. collection
c. levy
d. payment
12. The imposition of tax by the legislature is called:
a. assessment
b. collection
c. levy
d. payment
13. Although the power of taxation is basically legislative in character, it is NOT the function of Congress to
a. collect the tax levied under the law
b. determine who should be subject to the tax
c. fix with certainty the amount of taxes
d. identify who should collect the tax
14. A rule in taxation which states that all taxable persons and property of the same class are taxed at the same rate
a. Scope of taxation
b. Situs of taxation
c. Theory of taxation
d. Uniformity in taxation
15. The country that has the jurisdiction or right to levy and collect the tax
a. Scope of taxation
b. Situs of taxation
c. Theory of taxation
d. Uniformity in taxation
16. It is the place of taxation.
a. Scope of taxation
b. Situs of taxation
c. Theory of taxation
d. Uniformity in taxation
17. A theory which states that no person shall be imprisoned for non-payment of this type of tax
a. Excise tax
b. Poll tax
c. Property tax
d. Value added tax
18. The existence of the government is a necessity is a theory founded on:
a. Benefits received theory
b. Doctrine of symbiotic relationship
c. Lifeblood theory
d. The power to destroy
19. The reason why cigarettes manufacturer are taxed heavily is based on the theory that:
a. The police power of the government is limitless
b. The power to tax includes the power to destroy
c. There is a symbiotic relationship between the taxing authority and the taxpayer
d. No viable answer given
20. These are restrictions arising from the very nature of the power to tax itself:
 a. Constitutional limitations
b. Inherent limitations
c. Self-limitations
d. Self-restraints
21. These are restrictions founded on the fundamental law of the land:
a. Constitutional limitations
b. Inherent limitations
c. Self-limitations
d. Self-restraints
22. Taxation is inherent in every sovereignty because:
a. It may be exercised although it is not expressly granted by the fundamental law
b. The Congress of the Philippines, as a law-making body delegated such power to the State
c. The Constitution expressly provided for it
d. The Tax Code afforded such power to the State
23. 1st statement – The power of taxation is absolute.
2nd statement – The power of taxation is subject to limitations
a. 1st statement is true
b. 2nd statement is true
c. Both are true
d. Both are false
24. 1st statement - No person shall be deprived of life, liberty, or property without due process of law. 2nd
statement – No person shall be denied equal protection of the law.
a. 1st statement is true
b. 2nd statement is true
c. Both are true
d. Both are false
25. It means the recognition or respect accorded by one jurisdiction within its territory over the law of another because
they are sovereign equals.
a. Exemption from taxation of government entities
b. International comity
c. Reciprocity
d. Territoriality
26. It refers to fraudulent or forbidden schemes or devices designed to lessen or defeat taxes.
a. Tax avoidance
b. Tax evasion
c. Either tax evasion or avoidance
d. Neither tax evasion or avoidance
27. It is the exploitation by the taxpayer of legally permissible alternative tax rates or methods of assessing taxable
property or income in order to reduce tax liability.
a. Tax avoidance
b. Tax evasion
c. Either tax evasion or avoidance
d. Neither tax evasion or avoidance
28. The transfer of the tax burden by one whom the tax is assessed to another is called:
a. Tax avoidance
b. Tax evasion
c. Tax exemption
d. Tax shifting
29. It is the agreement between two States or countries reduced in writing as to the treatment of the income of each
citizens within its jurisdiction:
a. International comity
b. Reciprocity
c. Tax covenants
d. Tax treaty
30. The power of taxation can only be exercised by the State:
a. True
b. False
31. The power of eminent domain can only be exercised by the State:
a. True
b. False

32. The benefit-received theory is based on what principle?

a. Ability to pay theory
b. Equity
c. Necessity
d. Reciprocity
33. The statement “Without taxes, the government would be paralyzed” is based on:
a. Ability to pay theory
b. Benefit-received theory
c. Life-blood theory
 d. Paralysis theory
34. A quasi-public corporation like the National Grid Corporation of the Philippines (NGCP) may exercise one of the inherent
powers of the state. Which is it?
a. Police power
b. Power of eminent domain
c. Taxation power
35. Which does NOT belong to the group?
a. Due process of law
b. Equal protection of the law
c. Non-impairment of obligation and contract
d. Territoriality
36. Identify which escape of taxation is not allowed by law.
a. Shifting
b. Tax dodging
c. Tax minimization
d. Transformation
37. Which is NOT an element of a valid tax?
a. It must be for public purpose
b. It must be payable in money
c. It must be proportional in character
d. It must be uniform and equitable
38. Which is NOT a source of tax law?
a. Decisions of the Court of Tax Appeals
b. Opinion of tax experts
c. Revenue regulations issued by the Secretary of Department of Finance
d. Tax treaties entered into by the Philippines and another foreign state
39. The issuance promulgated by the Secretary of Finance:
a. Revenue Regulations
b. Revenue Memorandum Order
c. Revenue Memorandum Circular
d. Revenue Rulings
40. The Commissioner, when clarifying a specific provision of a law, shall issue:
a. Revenue Regulations
b. Revenue Memorandum Order
c. Revenue Memorandum Circular
d. Revenue Rulings
41. The Inter-Agency Task Force on Emerging Infectious Disease, as the government arm in combatting COVID-19, imposed a
rule banning all minors and senior citizens from going out the households. Any person violating the rule will be penalized in the
amount of Php 10,000 or suffer imprisonment. The rule is in accordance with what power of the State?
a. Police Power
b. Power of taxation
c. Power of eminent domain
d. People Power
42. The Government, thru: General Galvez, the Chief of Inter-Agency Task Force on COVID19 required the use of
facemasks and face shields outside of residence. This exercise of
a. Police Power
b. Power of taxation
c. Power of eminent domain
d. People Power
43. Without taxes, government will be paralyzed is based on this theory.
a. Lifeblood doctrine
b. Benefit-received theory
c. Unity in taxation
d. Darwin’s Theory
44. The branch/es of government which is/are directly concerned in regard the Aspects/Process of Taxation.
a. Legislative and executive
b. Legislative only
c. Executive only
d. Legislative, executive and judiciary
45. Nicanor is a professional while Inday is engaged in the sale of goods. If both earn income, both should be taxed alike. This
is based on which doctrine or theory or principle in taxation?
a. Uniformity in taxation
b. Unity in taxation
c. Equity in taxation
d. Equality in taxation
46. Nicanor is rich, hence he should pay more. Inday on the other hand is a minimum wage earner. The taxation of higher rate
on the income of Nicanor and exemption of income of Inday is consistent with that principle in taxation?
a. Unity in taxation
b. Equity in taxation
 c. Equality in taxation
d. Uniformity in taxation
47. Due to pandemic, the BIR allowed the filing of returns even outside the revenue jurisdiction of Revenue District Offices
(RDOs). This is in accordance with what principle related to Sound Tax System?
a. Administrative feasibility
b. Fiscal adequacy
c. Theoretical justice
d. Ability to pay principle
48. The BIR announced that meeting with BIR can be done online using the e-appointment. This is in accordance with what
principle related to Sound Tax System?
a. Administrative feasibility
b. Fiscal adequacy
c. Theoretical justice
d. Ability to pay principle
49. Assuming the Government of China sold to the Government of the Philippines COVID-19 vaccine called the
“SinoVACkumita”, the income from sale is exempted from taxation based on what principle?
a. International comity
b. Territoriality
c. Lifeblood theory
d. Power of taxation
50. Any law that provides for the assessment and collection of taxes for the support of the government and other public
purposes is called?
a. Tax Law
b. Tax Code
c. Constitution
d. Ordinance
51. It is a fixed amount of tax imposed upon persons residing in a community without regard to their property or
occupation:
a. Capitation tax
b. Excise tax
c. Privilege tax
d. Property tax
52. The 8% optional tax is an example of the following, except:
a. Direct tax
b. National tax
c. Progressive
d. Proportional
53. Imported vehicles are taxed according to value. This is an example of:
a. Ad valorem tax
b. Privilege tax
c. Property tax
d. Specific tax
54. The following are sources of tax laws, except:
a. Constitution of the Philippines
b. Decisions on tax cases of the Supreme Court
c. Revenue Memorandum Orders or Circulars of the BIR
d. Sanggunian Bayan Ordinance on franchise
55. 1st statement – In Tax Reporting, the source of the rules is the Tax Code
1. 2nd statement – In Financial Reporting, the source of the rules include the PFRS.
a. Only the 1st statement is true
b. Only the 2nd statement is true
c. Both of the statements are true
d. Both of the statements are false
56. Generally, in Tax Accounting, the basis of revenue recognition is:
a. In the period the income was earned and paid
b. In the period the income was paid
c. In the period the income was received by the taxpayer
d. In the period the income was recorded in the books of accounts
57. The BIR has no power in this regard:
a. Arrest tax evaders
b. Assess the tax
c. Collect the tax
d. Enforce favorable judgments by the Courts
58. The following are issued by the BIR Commissioner except:
a. Revenue Memorandum Circulars
b. Revenue Memorandum Orders
c. Revenue Regulations
d. Revenue Rulings
59. The Commissioner of Internal Revenue can do the following, except:
a. Change the accounting period
 b. Close the business of a taxpayer
c. File a return on behalf of a taxpayer
d. Levy internal revenue taxes
60. The BIR Commissioner can terminate the taxable period of a taxpayer. Which of the following instances in most likelihood
an exercise of such power may not be proper? Note: Taxpayer is under BIR audit:
a. Taxpayer will travel and have a vacation abroad
b. Taxpayer obstructed the proceedings from the collection of the tax
c. Taxpayer donated his only property to his children
d. Taxpayer is closing the business due to losses

VAT
1. The following are persons liable to VAT, except:
a. Importer
b. Lessee
c. Seller of goods
d. Seller of services
2. Which is FALSE?
a. A lessor follows the cash basis of accounting
b. A seller of goods follows the accrual basis of accounting
c. A seller of service follows the cash basis of accounting
d. An importer follows the accrual basis of accounting
3. As a general rule, the person statutorily liable to pay the VAT is the:
a. Buyer
b. Seller
c. Either the seller or the buyer
d. Neither the seller of the buyer
4. 1st statement – The gross selling price excludes the VAT.
2nd statement – The excise tax, if any is part of the gross selling price.
a. Only the 1st statement is true
b. Only the 2nd statement is true
c. Both of the statements are true
d. Both of the statements are false
5. 1st statement – The gross receipts excludes the VAT.
2nd statement – The gross receipts may include the amount charged for materials supplied with the services.
a. Only the 1st statement is true
b. Only the 2nd statement is true
c. Both of the statements are true
d. Both of the statements are false
6. Consigned goods are VATable if remained unsold and not returned within:
a. Thirty (30) days
b. Sixty (60) days
c. Ninety (90) days
d. One (1) year
7. The following are zero-rated sales, except:
a. Direct exports
b. Indirect exports
c. Sale to energy developers
d. Sales to registered export enterprises for their registered activity
8. Nicanor is a dual citizen based in the United States of America. He plans to resettle in the Philippines. The
TRAIn law exempts him from VAT on importing the following, except:
a. His calculator
b. His car used in business
c. His pet
d. His wearing apparels
9. St. Clementine Academy (SCA) is a private education institution. To be exempt from VAT, SCA must obtain
accreditation from the following, except:
a. Bureau of Internal Revenue (BIR)
b. Commission on Higher Education (CHEd)
c. Department of Education (DepEd)
d. Technical Education and Skills Development Authority (TESDA)
10. 1st statement – Sale of electricity by National Grid Corporation of the Philippines is subject to VAT. 2nd
statement – Sale of electricity by electric cooperatives is subject to VAT.
a. Only the 1st statement is true
b. Only the 2nd statement is true
c. Both of the statements are true
d. Both of the statements are false
11. Export-oriented enterprise are subject to zero-rated sale based on 70% of:
a. Total annual production
 b. Total gross income
c. Total gross sales
d. Total net income
12. 1st statement – Sale of residential lot in the amount of Php 1,919,500.00 is subject to VAT. 2nd
statement – Sale of residential house and lot amounting to Php 2.5M is subject to VAT.
a. Only the 1st statement is true
b. Only the 2nd statement is true
c. Both of the statements are true
d. Both of the statements are false
13. If monthly rental does not exceed Php 15,000.00 and the total gross receipts exceeds Php 3 Million, the
taxpayer is:
a. Exempt from Percentage Tax only
b. Exempt from VAT only
c. Exempt from VAT and Percentage Tax
d. VATable if the taxpayer is a VAT-registered taxpayer
14. If monthly rental does not exceed Php 15,000.00 and the total gross receipts does not exceed Php 3 Million,
the taxpayer is:
a. Exempt from Percentage Tax only
b. Exempt from VAT only
c. Exempt from VAT and Percentage Tax
d. VATable if the taxpayer is a VAT-registered taxpayer
15. If monthly rental exceeds Php 15,000.00 and the total gross receipts exceeds Php 3 Million, the taxpayer is:
a. Subject to Percentage Tax only
b. Subject to VAT and Percentage Tax
c. Subject to VAT only
d. VATable if the taxpayer is a VAT-registered taxpayer
16. If monthly rental exceeds Php 15,000.00 and the total gross receipts does not exceed Php 3 Million, the
taxpayer is:
a. Subject to Percentage Tax only
b. Subject to VAT only
c. Subject to VAT and Percentage Tax
d. VATable if the taxpayer is a VAT-registered taxpayer
17. Assuming all taxpayers are VAT-registered, which of the following is most likely subject to VAT?
a. Sale of goods by senior citizens
b. Sale of goods to persons with disability
c. Association dues
d. Tax-free exchanges
18. Sale of gold is:
a. Exempt from VAT
b. Subject to 12% VAT
c. Subject to 3% Percentage Tax
d. Zero-rated sale
19. Inday is a die-hard k-pop fan. She intends to go to South Korea. If she will ride South Korean Airlines, her
ticket is:
a. Subject to percentage tax or reciprocity
b. VAT exempt
c. VATable
d. Zero-rated sale
20. Nicanor owns a real property. He was given an equivalent ownership in ABC Corporation with control in
exchange for the property. The tax-free exchange is:
a. Subject to percentage tax or reciprocity
b. VAT exempt
c. VATable
d. Zero-rated sale
21. Nicanor is a senior citizen. He bought a Kiddie meal at Jollibee. The sale is:
a. Subject to percentage tax or reciprocity
b. VAT exempt
c. VATable
d. Zero-rated sale
22. Nicanor is a Person with Disability (Pwd). He bought a condominium unit worth Php 5 Million from a
developer. The sale is:
a. Subject to percentage tax or reciprocity
b. VAT exempt
c. VATable
 d. Zero-rated sale
23. Self-employed individuals and professionals availing of the 8% tax on gross sales and/or receipts and
other non-operating income are:
a. Exempt from the payment of twelve (12%) VAT
b. Subject to 3% Percentage Tax
c. Subject to VAT
d. Subject to 0%
24. If a taxpayer, not required to register as VAT, opted to become a VAT-registered taxpayer, such option when
taken is:
a. Forever irrevocable
b. Irrevocable for three (3) years
c. Revocable anytime
d. Revocable if the taxpayer’s actual gross receipts or gross sales did not exceed the VAT threshold
25. Amortization of input tax on depreciable goods is:
S1 - Allowed until December 31, 2021
S2 - Allowed even after December 31, 2021 but up to full utilization only of remaining deferred input tax
a. S1 only
b. S2 only
c. Both are true
d. Both are false
26. The 5% VAT withholding on government sale is:
a. Creditable
b. Final tax
c. Not creditable
27. Application for tax refunds from zero-rated sales should be made:
a. Within two (2) years after the close of the taxable quarter when such sales were made
b. Within two (2) years from the date of filing of VAT returns
c. Within two (2) years from the purchase of goods and payment of corresponding input tax
d. Within two (2) years from year of sale
28. A taxpayer whose VAT registration was cancelled due to retirement may apply for a tax refund if he has no
other tax liability:
a. Within (two) years from the date of issuance of tax clearance
b. Within two (2) years after the close of the taxable quarter when such sales were made
c. Within two (2) years from the date of filing of VAT returns
d. Within two (2) years from the date of closure
29. The date of cancellation of VAT registration is reckoned from:
a. The date of actual closure of the business
b. The date of issuance of tax clearance by the BIR
c. The date of payment of tax liabilities and issuance of a memo report of the Revenue Officer
d. The filing of closure with the BIR and the stamping of BIR Form 1905
30. Other than input tax from direct exports:
1st statement - Claims for refunds shall be filed with Large Taxpayers Service (LTS) if the taxpayer is classified
as large taxpayer.
2nd statement - Claims for refunds shall be filed with Revenue District Office (RDO) having jurisdiction over the
principal place of business of the taxpayer if not classified as large taxpayer.
a. Only the 1st statement is true
b. Only the 2nd statement is true
c. Both of the statements are true
d. Both of the statements are false
31. Claims for input tax refund of direct exporters shall be exclusively filed with:
a. Large Taxpayer Service where registered
b. Revenue District Office where registered
c. Large Taxpayer Service or Revenue District Office where registered
d. VAT Credit Audit Division (VCAD)
32. In case there is full or partial denial of the claim for tax refund, the taxpayer has thirty (30) days from
the receipt of the decision denying the claim to:
a. Appeal the decision with the Commissioner of Internal Revenue by filing a request for
reconsideration
b. Appeal the decision with the Court of Tax Appeals
c. Appeal the decision with the Court of Appeals
d. Appeal the decision with the Supreme Court by Quo Warranto Proceedings
33. A failure on the part of any official, agent, or employee of the BIR to act on the application for refund within
the prescribed period shall be:
a. Criminally charged
 b. Demoted to next rank
c. Promoted to next rank
d. Punishable under the provisions of the Tax Code, as amended
34. Funds for VAT refund applications shall be sourced thru:
a. Automatic appropriation of 5% on total VAT collections of the BIR and BOC
b. Automatic appropriation of 50% on total VAT collections of the BIR and BOC
c. Automatic appropriation of 5% on total tax collections of the BIR and BOC
d. Automatic appropriation of 50% on total tax collections of the BIR and BOC
35. The deadline of the filing of the quarterly VAT tax return for ABC Corp. is:
a. 10th day following the close of the taxable quarter
b. 20th day following the close of the taxable quarter
c. 25th day following the close of the taxable quarter
d. 30th day following the close of the taxable quarter
e. last day following the close of the taxable quarter
36. S1 – Goods on hand of taxpayers who will transition from non-VAT to VAT are subject to 12% VAT due to
deemed sale transaction.
S2 - Taxpayers who will change registration from VAT to non-VAT is entitled to transitional input tax.
a. Only S1 is true
b. Only S2 is true
c. Both are true
d. Both false
37. Which is FALSE?
a. Beginning 2023, the filing of VAT return is quarterly only
b. Input tax on purchase of capital goods (depreciable) exceeding Php 1,000,000.00 is creditable
against output tax
c. Input tax on purchase of capital goods (depreciable) exceeding Php 1,000,000.00 is deferred over
the useful life of the asset or maximum of sixty months
d. The remedy in case of denial of VAT refunds is to appeal to the Court of Tax Appeals

Comprehensive Problem
The following can be found in ABC Corp.’s (domestic corporation) 2022 financial records:
Quarterly Income Statement:
Quarters 1st 2nd 3rd 4th
Gross sales 5,000,000 4,000,000 3,000,000 6,000,000
Cost of sales 4,000,000 3,000,000 2,000,000 4,000,000
(purchase of
goods)
Gross income 1,000,000 1,000,000 1,000,000 2,000,000
Deductions 500,000 200,000 1,100,000 500,000
Taxable income 500,000 800,000 (100,000) 1,500,000
(loss)

The duly filed Quarterly VAT returns disclosed the following:

Quarters 1st 2nd 3rd 4th
VATable sales 2,000,000 3,000,000 3,000,000 5,000,000
Output tax 120,000 360,000 360,000 600,000

Purchases with
VAT:
Goods 4,000,000 3,000,000 2,000,000 4,000,000
Service 200,000 100,000 200,000 200,000
Input tax 504,000 372,000 264,000 504,000

VAT paid 0 0 96,000 96,000

In addition to the above, a review of the Balance Sheet Accounts (Statement of Financial Position) showed
the balances of Asset and Liability in the amounts of Php 10,000,000 and Php 6,000,000, respectively.
38. How much is the VAT payable for the 1st Quarter VAT Return?
a. Php 46,000
b. Php 96,000.00
 c. Php 360,000.00
d. Php 600,000.00
39. How much is the VAT payable for the 2nd Quarter VAT Return?
a. Php 68,000.00
b. Php 108,000.00
c. Php 328,000.00
d. Php 480,000.00
40. How much is the VAT payable (overpayment) for the 3rd Quarter VAT Return?
a. (Php 204,000.00)
b. Php 0
c. Php 96,000.00
d. Php 360,000.00
41. How much is the VAT payable for the 4th Quarter VAT Return?
a. Php 120,000.00
b. Php 216,000.00
c. Php 480,000.00
d. Php 720,000.00
42. Assuming the Company filed its 4th Quarter VAT return on January 20, 2023 and filed an amendment on
January 31, 2023, the imposable surcharge is?
a. None
b. 25% since the under-declaration is less than 30%
c. 25% based on the deficiency basic VAT
d. 50% due to falsity or fraud

Comprehensive Problem:
Nicanor disclosed the following 2022 transactions for your review:
Customers Amount of Sale Amount collected
Senior citizens 100,000.00 100,000.00
Persons with disability 50,000.00 50,000.00
Solo parents 50,000.00 50,000.00
National Athletes 50,000.00 50,000.00
Athletes 50,000.00 50,000.00
Regular customers 400,000.00 300,000.00
Government 1,000,000.00 500,000.00
Total 1,700,000.00 1,100,000.00
He asked you to compute the following:

43. Assuming Nicanor is VAT-registered seller of goods, how much is the total output tax required to be reported
in the VAT return?
a. Php 102,000.00
b. Php 108,000.00
c. Php 174,000.00
d. Php 180,000.00
44. Assuming Nicanor is VAT-registered seller of goods, how much is the VAT-exempt transaction required to be
reported in the VAT return?
a. Php 150,000.00
b. Php 200,000.00
c. Php 250,000.00
d. Php 300,000.00
45. Assuming Nicanor is VAT-registered seller of service, how much is the total output tax required to be
reported in the VAT return?
a. Php 102,000.00
b. Php 108,000.00
c. Php 174,000.00
d. Php 180,000.00
46. Assuming Nicanor is Non-VAT-registered seller of service, how much is the percentage tax PAYABLE
assuming further that the required withholding was made by the government?
a. Php 6,000.00
b. Php 7,000.00
 c. Php 11,000.00
d. Php 17,000.00
47. The records of ABC Corp., a VAT-registered taxpayer, for the TY 2022 are disclosed below:
Month Description of purchase Amount Input Tax
January Inventory 1,000,000.00 120,000.00
Machinery 2,000,000.00 240,000.00
February Inventory 500,000.00 60,000.00
Equipment 1,500,000.00 90,000.00
March Inventory 2,000,000.00 240,000.00
Delivery truck 3,000,000.00 360,000.00
Total 10,000,000.00 1,200,000.00
Note: Life of machinery, equipment and delivery truck is five (5) years How
much is the total input tax creditable against the output tax?
a. Php 420,000.00
b. Php 441,000.00
c. Php 1,179,000.00
d. Php 1, 200,000.00
48. The NIRC became effective:
a. January 1, 1997
b. January 1, 1998
c. January 1, 1999
d. January 1, 2000
49. The date of effectivity of TRAIN law is:
a. December 19, 2017 which is the date the President signed the TRAIN
b. December 31, 2017
c. January 1, 2018
d. The date of publication of the TRAIN
50. The date of general effectivity of CREATE law is:
a. July 1, 2020
b. January 1, 2021
c. April 11, 2021
d. January 1, 2022

OPT
1. Nicanor is a smart back-packer. Upon his travel to Japan, he booked a flight with Japan Airlines. The receipts
by the Japan Airlines is? Disregard rule on treaty, if any
a. Subject to zero-rated sale
b. Subject to 12% VAT
c. Subject to gross receipts tax of 3%
d. Subject to percentage tax of 1% (or 3%)
2. Ivana Ala-uwi is a popular Filipino vlogger. Her sole income comes from her monthly monetization of credits
earned by her YowTube channel where content is purely made in the Philippines. YowTube, an NRFC, paid
Ivana an average of $3,000 per month at Php 50.00 per $1. Ivana’s transaction is:
a. Subject to zero-rated sale
b. Subject to 12% VAT
c. Subject to gross receipts tax of 3%
d. Subject to percentage tax of 1% (or 3%)
e. Exempt from percentage tax
3. Shushi Bae is a Korean based in South Korea. She established Shushi Samgyup in the Philippines and
registered the same at the Department of Trade and Industry and the Bureau of Internal Revenue as Non-VAT.
She hired Nicanor as the General Manager in-charge of all the operations of the head office and its branches.
Total receipts for the 2021 are hereunder accounted:
1st Quarter 2nd Quarter 3rd Quarter 4th Quarter
Head Office NCR 500,000 400,000 500,000 400,000
Cebu Branch 250,000 300,000 200,000

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 Davao Branch 100,000 200,000
How much is the total output tax Shushi Bae is required to report?
a. Php 0
b. Php 60,000
c. Php 216,000
d. Php 342,000
4. How much is the total percentage tax is she required to pay for the year 2021?
a. Php 0
b. Php 18,000
c. Php 28,500
d. Php 85,500
5. The Company is required to consolidate the sales and pay the business tax in the NCR Office?
a. True
b. False
6. Which is FALSE?
S1 – ABC TV whose annual gross receipts is only Php 5 Million is subject to franchise tax of 3%
S2 – ABC Water is a water utility franchise holder whose gross receipts is Php 20M is subject to 2%
franchise tax
S3 – PAGCOR is subject to 5% franchise tax on all its gaming and non-gaming operations.
a. S1
b. S2
c. S3
d. None of the three are false
7. Nicanor as a sole proprietor, chose 8% as his taxation. He is required to pay percentage tax.
a. True
b. False
8. Nicanor as a sole proprietor, chose 8% as his taxation. He is required to pay percentage tax on the first 3M if
his gross sales amounted to Php 4 Million.
a. True
b. False
9. Nicanor as a sole proprietor, chose 8% as his taxation. He is required to report output tax on the excess of the
Php 3 Million if his gross sales amounted to Php 4 Million.
a. True
b. False
10. Nicanor is a Non-VAT taxpayer engaged in merchandising. When is he required to report his sales and pay
the percentage tax due?
a. Monthly
b. Quarterly
c. Semi-annually
d. Annually
11. Nicanor is a non-VAT taxpayer subject to percentage tax. The deadline of the filing of his 1st
quarterly percentage tax return for the year 2023 is:
a. March 25
b. April 20
c. April 25
d. Not later than last day of month of April
12. Nicanor is an operator of a beerhouse club. His gross receipts is subject to:
a. 3% percentage tax
b. 12% VAT if gross receipts exceeded Php 3M
c. 18% amusement tax
d. 30% other percentage tax
13. Nicanor's business expanded to 3 branches including the head office. Which is false if his registration is
non-VAT?
a. His percentage tax return filing may be consolidated
b. He is required to consolidate his receipts and report the same under head office
c. The head office may report its receipts separately
d. The branches may report its receipts separately
14. If a taxpayer is a Non-VAT taxpayer, he may be qualified to avail 8% preferential taxation
a. True
b. False
15. The following taxpayers are exempt from paying the percentage tax, except:
a. Cooperative
b. Self-employed individual subject to 8% commuted tax
 c. Self-employed taxpayer whose gross sales is Php 2 Million pesos and who has not opted 8%
income tax regime
d. Compensation income earner
16. Stock transaction tax under TRAIN law is:
a. 6/10 of 1%
b. 5/10 of 1%
c. 6%
d. 5%
17. Which is TRUE? A restaurant with videoke is:
a. Subject to 3% percentage tax if below the VAT threshold
b. Subject to 8% optional tax
c. Subject to amusement tax of 18%
d. Subject to VAT if exceeded the threshold
18. The following were lifted from the 2022 sales books and the duly filed percentage tax returns of ABC Corp.:
Head Office Branch 1 Branch 2 Branch 3
Gross Sales 700,000.00 300,000.00 200,000.00 100,000.00

Percentage tax
returns:
1st Quarter 200,000.00 150,000.00 No return filed 100,000.00
2nd Quarter 100,000.00 No return filed 50,000.00 No return filed
3rd Quarter 150,000.00 50,000.00 No return filed No return filed
4th Quarter No return filed 50,000.00 No return filed No return filed
The Head Office’s and the Branches’ Certificate of Registration showed Percentage Tax Return as one of the
tax types. You were engaged to handle tax compliance of the Company. The total deficiency basic
percentage tax you will recommend for payment in the amendment of the returns is:
a. Php0.00
b. Php 2,000.00
c. Php 4,500.00
d. Php 45,000.00
19. Percentage tax is a deduction from gross income.
a. True
b. False
20. Which is FALSE? The rate of 1% percentage tax:
a. Is temporary
b. Shall return to 3% by July 1, 2023
c. Applies to non-individual taxpayers who are NON-VAT registered and who are not subject to OPT
d. Shall remain effective unless removed by Congress