Chapter 1 – Introduction to Taxation

MC – part 1
1. The point at which tax is levied is also called
a. Impact of Taxation c. Incidence of taxation
b. Situs of Taxation d. Assessment
2. Which of the following inappropriately describes the nature of taxation?
a. Inherent in sovereignty
b. Essentially a legislative function
c. Subject to inherent and constitutional limitation
d. Generally for public purpose
3. Which is correct?
a. Tax condonation is a general pardon granted by the government
b. The BIR had five deputy commissioners
c. The government can still collect tax in disregard of a constitutional limitation because taxes are
the lifeblood of the government
d. The president of the Philippines can change tariff or imposts without necessity of calling
Congress to pass a law for that purpose
4. A. The power to tax includes the power to exempt
B. The power to license includes the power to tax
Which is true?
a. A only c. A and B
b. B only d. Neither A and B
5. International double taxation can be mitigated by any of the following except
a. Providing allowance for tax credit
b. Provision of reciprocity provisions in tax laws
c. Provision of tax exemptions
d. Entering into treaties to form regional trade blockage against the rest of the world
6. Which is not an object of taxation?
a. a. Persons c .Transactions
b. b. Business d. Public Properties
7. That courts cannot issue injunction against the government’s effort to collect taxes is justified by
a. a. The lifeblood c. the ability to pay theory
b. b. Imprescriptibility of taxes d. the doctrine of estoppel
8. The power to enforce proportional contribution from the people for the support of the government is
a. a. Taxation c. Eminent domain
b. b. Police power d. Exploitation
9. This theory underscores that taxes are indispensable to the existence of the state.
a. Doctrine of equitable recoupment c. The benefit received theory
b. The Lifeblood Doctrine d. The Holmes Doctrine
10. A. Taxation is the rule, exception is the exemption
B. Vague taxation laws are interpreted liberally in favor of the government
Which is false?
A. A only c. Both A and B
B. B only d. Neither A nor B
11. Select the incorrect statement
a. The power to tax includes the power to exempt
b. Exemption is construed against the taxpayer and in favor of the government
c. Tax statues are construed against the government in case of doubt
d. Taxes should be collected only for public improvements
12. Which is not a public purpose?
a. Public education c. Transportation
b. National defense d. None of these
13. Which does not properly describe the scope of taxation?
a. Comprehensive c. Discretionary
b. Supreme d. Unlimited
14. All of these are secondary purposes of taxation except
a. To reduce social inequality
b. To protect local industries
c. To raise revenue for the support of the government
d. To encourage growth of local industries
15. What is the theory of taxation?
a. Reciprocal duties of support and protection c. Constitutionality
b. Necessity d. Public purpose
16. A. taxes should not operate retrospectively.
B.tax is generally for public purpose
Which is true?
 a. A only c. A and B
b. B only d. Neither A nor B
17. Which provision of the Constitution is double taxation believed to violate?
A. Equal protection guarantee c. Uniformity rule
B. Progressive scheme of taxation d. Either A or C
18. Which limitation of taxation is the concept of “situs of taxation” based?
a. Territoriality c. International comity
b. Public purpose d. Exemption of the government
19. Which tax exemption is irrevocable?
a. Tax exemption based on contract
b. Tax exemption based on the Constitution
c. Tax exemption based on law
d. Both A and B
20. Which statement is incorrect?
a. Every person must contribute his share in government costs
b. The existence of a government is expected to improve the lives of the people
c. The government provides protection and other benefits while the people provide support
d. Only those who are able to pay tax can enjoy the privileges and protection of the government
21. Which is the most incorrect statement regarding taxes?
a. Taxes are necessary for the continued existence of the government
b. The obligation to pay tax does not rest upon the privilege enjoyed by or the protection afforded to the
citizen of the government but upon the necessity of money for the support of the state
c. There should be personal benefit enjoyed from the government before one is required to pay tax
d. Taxes should be collected without unnecessary delay but its collection should not be tainted with
arbitrariness
22. Statement 1: in the selection of the objects of taxation, the courts have no power to inquire into the wisdom,
objectivity, motive, expediency, or necessity of a tax law.
Statement 2: An imposition can be both a tax and a regulation. Taxes may be levied to provide means for
rehabilitation and stabilization of threatened industry
Which is correct?
a. Statement 1 only c. Both statements
b. Statement 2 only d. Neither statements
23. Which of the following acts in taxation is administrative by nature?
a. Determination of the amount to be imposed
b. Fixing the allocation of the amount to be collected between the local government and the national
government
c. Levy or distraint of taxpayers’ property for tax delinquency
d. Determining the purpose of the tax to impose
24. This refers to the privilege or immunity form a tax burden which others are subject to:
a. Exclusion c. Tax holiday
b. Deduction d. Reciprocity
25. Statement 1: the benefit received theory presupposes that some taxpayers within the territorial jurisdiction of
the Phil. Will be exempted from paying tax so long as they do not receive benefits from the government.
Statement 2: the ability to pay theory suggests that some taxpayers may be exempted from tax provided they do
not have the ability to pay the same.
Which statement is true?
a. Only statement 1 c. Both statements 1 and 2
b. Only statement 2 d. Neither statement 1 nor 2
26. Which is not a legislative act?
a. Determination of the subject of the tax
b. Setting the amount of the tax
c. Assessment of the tax
d. Determining the purpose of the tax
27. Statement 1: Taxation is the rule; exemption is the exception
Statement 2: Taxation may be used to implement the police power of the state
a. I is true c. I and II are true
b. II is true d. I and II are not true
28. Which of the following powers of the Commissioner of Internal Revenue cannot be delegated?
a. The examination of tax return and the determination of tax due thereon
b. To refund or credit tax liabilities in certain cases
c. The power to compromise or abate any tax liability involving basic deficiency tax of P500,000 and
minor criminal violations
d. The power to reverse a ruling of the Bureau of Internal Revenue
29. When exemption from a tax imposition is silent or not clearly stated, which is true?
a. Taxation applies since exemptions are construed against the government
b. Exemption still applies since this is an instance of exemption by omission
c. Taxation applies since exemptions are construed against the tax payer
 d. Exemption applies since obligation arising from law cannot be presumed and hence construed against
the government
30. What is the basis of taxation?
a. Reciprocal duties of support and protection c. Public purpose
b. Constitutionality d. Necessity
31. When the provisions of tax law are silent as to the taxability of an item, which is true?
a. Taxation applies since taxation is the rule, exemption is the exception
b. Exemption applies since vague tax laws are construed against the government
c. Taxation applies due to the Lifeblood doctrine
d. Exemption applies since obligation arising from law is presumed; ignorance of the law is not an excuse
32. Which of the following statement does not support the principle that tax is not subject to compensation or
set-off?
a. The government and the taxpayer are not creditors and debtors of each other
b. Tax is not in the nature of contract but it grows out of a duty wherein taxpayers are bound to obey even
without the personal consent of the taxpayer
c. Taxes arise from law, not from contracts
d. Both tax and debt partake the nature of an obligation
33. Which is not legally tenable in refusing to pay tax?
a. Absence of benefit from the government
b. Lack of jurisdiction of the taxing authority
c. Prescription of the tax authority’s right to collect
d. All of these
34. What is the primary purpose of taxation?
a. To enforce contribution from its subjects for public purpose
b. To raise revenue
c. To achieve economic and social stability
d. To regulate the conduct of business or profession
1. The constitutional exemption of religious or charitable institutions refers only to
a. Real property tax c. Property tax and income tax
b. Income tax d. Business tax
2.The agreement among nations to lessen tax burden of their respective subjects called
a. Reciprocity c. Territoriality
b. International comity d. Tax minimization
3. An educational institution operated by a religious organization was being required by a local government to
pay real property tax. Is the assessment valid?
a. Yes, with respect to all properties held by such educational institution
b. Yes, with respect to properties not actually devoted to educational purposes
c. No, with respect to any properties held by such educational institution
d. No, with respect to properties not actually devoted to educational purposes
4. Which is not a constitutional limitation?
a. No tax law shall be passed without the concurrence of a majority of all members of congress
b. Non-appropriation for religious purposes
c. No law impairing government obligations on contracts shall be passed
d. Non-impairment of religious freedom
5. Which of the following is not an inherent limitation of the power to tax?
a. Tax should be levied for public purpose
b. Taxation is limited to its territorial jurisdiction
c. Tax laws shall be uniform and equitable
d. Exemption of government agencies and instrumentalities
6. The following are inherent limitations to the power of taxation except one. Choose the exception.
a. Territoriality of taxes c. For public purpose
b. Legislative in character d. Non-appropriation for religious purpos
7. That all taxable articles or properties of the same class shall be taxed at the same rate underscores
a. Equality in taxation c. Uniformity in taxation
b. Equity of taxation d. None of these
8. The following are limitations of taxation:
A. Territoriality of taxation
B. Exemption of the government
C. Taxation is for public purpose
D. Non-impairment of contracts
E. Non-delegation of the power to tax
Which of these are classified as both constitutional and inherent limitation?
a. A and B c. C and E
b. B and C d. D and E
9. The provisions in the Constitution regarding taxation are
a. Grants of the power to tax
b. Limitations to the power to tax
 c. Grants and limitations to the power to tax
d. Limitations against double taxation
10. The constitutional exemption of non-stock, non-profit educational institutions refers to
a. Real property tax c. property tax and income tax
b. Income tax d. business tax
11. Which of the following is violative of the principle of non-delegation?
a. Requiring that legislative enactment must exclusively pertain to congress
b. Authorizing the president to fix the amount of impost on imported and exported commodities
c. Authorizing certain private corporation to collect taxes
d. Allowing the secretary of finance and the BIR to issue regulation or rulings which go beyond the scope
of a tax law
12. Which of the following violates constitutional provisions?
a. Payment of salaries to priest or religious ministers employed by the Armed Forces of the Philippines
b. Imposing tax on properties of religious institutions which are not directly and exclusively used for
religious purposes
c. Imposition of license for the sale of religious literature
d. Authorizing the President of the Philippines to fix the rates of tariffs or imposts
13. In order to phase-out a huge deficit, the President of the Philippines passed a law offering all taxpayers with
previous tax delinquency to pay a minimum tax in exchange for relief from tax assessment in the period of
delinquency. Is this a valid exercise of taxation power?
a. Yes, because the measure adopted is grounded upon necessity
b. Yes, because the President is merely exercising his presidential discretion
c. No, because the power of taxation is non-delegated
d. No, because only the Department of Finance can issue such ruling
14. Concerned with increasing unemployment rates in the country, the President of the Philippines encouraged
the Philippine Senate to pass a law granting special tax privileges to foreign investors who will establish
businesses in the country. The senate accordingly drafted the bill and passed to Congress for approval. Is this
valid exercise of taxation power?
a. Yes. It is the discretion of the President to adopt any measures he deemed necessary to alleviate poor
conditions in the country.
b. Yes. Any means beneficial to the public interest should be given optimum priority.
c. Yes. The president’s proposal will have to be finally approved and passed by the legislature. The rule on
non-delegation of taxation would not be violated.
d. No. tax bills shall originate from the House of Representatives
15. Ram is the only practicing lung transplant specialist in Baguio City. The City Government of Baguio passed
a local ordinance subjecting the practice of lung transplant to 2% tax based on receipts. Ram objected claiming
that other transplant specialists in other regions of the country are not subjected to tax.is Ram’s contention
valid?
a. Yes, because the rule of taxation should be uniform and equitably enforced
b. Yes, because Ram is the only one subject. Other practitioners who would later practice would not be
covered by the ordinance.
c. No, because the ordinance would cover all transplant specialist who would practice in Baguio City. The
uniformity rule would not be violated.
d. No, because subjecting new industry to taxation would hamper economic growth.
16. With the country under incessant shortage of sugar, the Philippine Congress enacted a law providing tax
exemption and incentives to cane farmers without at the same time granting tax exemptions to rice farmers who
produce the staple food of the Philippines, is the new law valid?
a. Yes, since there is a valid classification of the taxpayers who would be exempted from tax
b. Yes, since sugar is more important than rice
c. No, since the grant of exemption is construed in favor of taxpayers
d. No, because there is no uniformity in the grant of tax exemption
17. Congress passed a law subjecting government-owned and controlled corporation (GOCCs) to income tax. Is
the law valid?
a. Yes, because all government agencies and instrumentalities are subject to tax
b. Yes, because GOCCs are not government agencies and are essentially commercial in nature
c. No, because government agencies are exempt. This would pose a violation of the equality clause in the
constitution
d. No, because GOCCs are constitutionally exempted from paying taxes
18. Which of the following is not a constitutional limitation of the power to tax?
a. Non-impairment of obligation or contracts
b. Due process and equal protection of the law
c. Non-appropriation for religious purposes
d. Non-delegation of police power
19. The Philippine Congress enacted a law requiring foreign banks to withhold taxes earned by Filipino
residents in their country and to remit the same to the Philippine government. Is this a valid exercise of Taxation
power?
a. Yes because foreign banks are with the territorial jurisdiction of the Philippines
 b. Yes, the Philippines can enforce tax requirements to subjects of foreign sovereignty even if they are
outside the country
c. No, as this leads to encroachment of foreign sovereignty
d. No, this is prohibited by the Constitution
20. Which of the following normally pays real property tax?
a. Bantay bata, a non-profit charitable institution
b. Jesus crusade movement, a religious institution
c. University of Pangasinan, a private proprietary educational institution
d. AM Property Holdings, a registered property development company
21. Tax exemption bills are approved by
a. Majority of all members of Congress
b. Solely by the President of the Republic
c. 2/3 of all members of Congress
d. Majority of the representatives constituting a quorum
22. The Japanese government invested P100,000,000 in a Philippine local bank and earned P10,000,000
interest. Which is correct?
a. The income is exempt on grounds of territoriality
b. The income is exempt due to international comity
c. The income is subject to tax on the basis of sovereignty
d. The income is subject to tax because the income is earned within the Philippines
PART 3
1.When a legislative body taxes a persons and property, rights and privileges under the same taxable category at
the same rate, this is referred to as compliance with the constitutional limitation of:
a. Equity c. Due process
b. Uniformity d. Equal protection clause
2.Which is not a legislative act?
a. Assessment of the tax c. Determination of the subject of the tax
b. Setting the amount of the tax d. Determining the purpose of the tax
3.The inherent powers of the state are similar in the following respect, except:
a. They are inherent to the existence of the State
b. They are exercisable without the need for an express constitutional grant
c. All are not exercised by private entities
d. They are exercised primarily by the legislature
4.Which is mandatorily observed in implementing police power?
a. Public interest c. Public Use
b. Just compensation d. All of these
5.Which is considered in the exercise of eminent domain?
a. Public use c. Both a and b
b. Just compensation d. Neither a and b
6. The general power to enact laws to protect the well-being of the people is called
a. Police power c. Taxation
b. Eminent domain d. all of these
7. Which of the following entities will least likely exercise the power of eminent domain?
a. Electric cooperatives c. telecommunication business
b. Water cooperatives d. transportation operators
8. In exercising taxation, the government need not consider
a. . Inherent limitations c. due process of law
b. Just compensation d. constitutional limitations
9. Licensing of business or profession is an exercise of
a. Police power c. Eminent Domain
b. Taxation d. All of these
10. Select the correct statement
a. Eminent domain refers to the power to take public property for private use after paying just
compensation
b. Police power being the most superior power of the State is not subject to any limitation
c. Taxation power shall be exercised by Congress even without an express Constitutional grant
d. Taxes may be collected even in the absence of a law since obligation arising from law is always
presumed
11. Which is principally limited by the requirement of due process?
a. Eminent domain c. taxation
b. Police power d. all of these
12. S1: congress can exercise the power of taxation even without constitutional delegation of the power of tax
S2: only the legislature can exercise the power of taxation, eminent domain, and police power?
Which statement is correct?
a. Statement 1 c. statement 1 and 2
b. Statement 2 d. neither statement 1 nor 2
13. Which power of the state affects the least number of people?
 a. Police power c. taxation
b. Eminent domain d. taxation and police power
14. Select the correct statement
a. The benefit received theory explains that the government is obliged to serve the people since it is
benefiting from the tax collection from its subjects
b. The lifeblood theory underscores the taxation is the most superior power of the state
c. The police power of the state is superior to non-impairment clause of the constitution
d. The power of taxation is superior to the non-impairment clause of the constitution
15. Which of the following is not exercised by the government?
a. Taxation c. eminent domain
b. Police power d. exploitation
16. Select the incorrect statement
a. Since there is compensation, eminent domain raises money for the government
b. Once a government is established, taxation is exercisable
c. The most important of the power is taxation
d. Police power is more superior that the non-impairment clause of the constitution
17. The following statements reflects the differences among the inherent powers except:
a. The property taken under eminent domain and taxation are preserved but that of police power is
destroyed
b. Eminent domain and police power do not require Constitutional grant, but taxation, being a formidable
power, requires constitutional grant
c. Only eminent domain can be exercised by private entities
d. Taxation, police power, and eminent domain are ways in which the government interferes with private
right and property
18. S1: the taxation power can be used to destroy if the law is valid
S2: a tax law which destroys things, business, or enterprises for the purpose of raising revenue is an invalid tax
law
Which is incorrect?
a. Statement 1 c. both statements
b. Statement 2 d. neither statement
19. Select the correct statement
a. The provision on taxation in the Philippine Constitution are grants of the power to tax
b. The power to tax includes the power to destroy
c. When taxation is used as a tool for general and economic welfare, this is called fiscal purpose
d. The sumptuary purpose of taxation is to raise finds for the government
20. Which if the following power is inherent or co-existent with the creation of the government?
a. Police power c. taxation
b. Eminent domain d. all of these
21. Which of the following is not an inherent limitation of the power to tax?
a. Tax should be levied for public purpose
b. Taxation is limited to its territorial jurisdiction
c. Tax laws shall be uniform and equitable
d. Government agencies and instrumentalities are exempt from tax
22. Select the incorrect statement
a. The power to tax includes the power to exempt
b. Exemption is construed against the taxpayer and in favor of the government
c. Tax statues are construed against the government in case of doubt
d. Taxes should be collected only for public improvement
23. Which of the following is not a constitutional limitation of the power to tax?
a. Non-impairment of obligation or contracts
b. Due process and equal protection of the law
c. Non-appropriation for religious purpose
d. Non-delegation of the taxing power
24. Which of the power of the state is the most superior? Which is regarded as the most important?
a. Taxation; eminent domain c. Eminent domain; police power
b. Police power; taxation d. All
CHAPTER 3: INTRODUCTION TO INCOME TAX
1. Which is not a requisite of gross income?
a. Return on capital c. Exempted by law
b. Realized benefit d. not exempted by law
2. Which is taxable item of income?
a. Increase in numbers of a herd animals c. Moral damages
b. Compensation for personal inquiries d. Interest on moral damages
3. Which is not subject to income tax?
a. Donation c. sales of goods
b. Sale of service d. barter of goods
4. The total consideration received from the sale of service constitute
 a. Return on capital c. either a or b
b. Return of capital d. both a or b
5. When paid for, which of the following items may involve a return on capital?
a. a. House an lot c. dignity
b. Life d. health
6. The total consideration received from the sales of goods at a gain represents
a. Return on capital c. either a or b
b. Return of capital d. both a or b
7. The total consideration received from the sale of goods at loss represents
a. Return on capital c. either a or b
b. Return of capital d. both a or b
8. Why is income subject to taxation?
a. Income is the most prevalent source of a taxpayer’s wealth
b. Income is the best measure of taxpayer’s ability to pay tax
c. Rich people tend to have more income than the poor
d. Any of these
9. Which is not an item of gross income because of the absence of an undertaking from the taxpayer?
a. Proceeds of a life insurance policy
b. Forgiveness of indebtedness as an act of gratuity
c. Revaluation surplus on properties
d. Service fees
10. Which is subject to income tax?
a. Proceeds of life insurance policy received by the family of the insured
b. Excess of proceeds over the premiums paid received by the taxpayers
c. Life insurance proceeds received by the corporation from the insurance of a deceased officer
d. None of these
11. Which of the following is exempted from income taxation because of the absence of ability to pay?
a. damages received from patent infringement suit
b. Unrealized income from investments
c. Gain on sale of goods
d. Inheritance
12. Income tax may be imposed for the following purposes, except
a. To provide large amount of revenues
b. To limit corruption
c. To offset regressive sales and consumption taxes
d. To mitigate the evils arising from the inequalities in the distribution of income and wealth
13. Which of the following constitutes taxable income?
a. Return of premium on life insurance received by the insured
b. Moral damages received from slander
c. Proceeds of crop insurance
d. Compensation for personal injury
14. Which of the following is not a constructive receipt of income?
a. Forgiveness of indebtedness in consideration of service
b. Matured detachable interest coupons
c. Deposit of income to taxpayer’s bank accounts
d. Cash salary of an employee
15. Transfers for insufficient consideration are subject to
a. Income tax c. either a or b
b. Transfer tax d. both a or b
16. Which is specifically exempted from income taxation by virtue of legal exemption?
a. Minimum wage c. Unrealized gain
b. Gain on sale of prohibited drug d. All of these
PART 2
1. A resident alien naturalized in accordance with Philippine laws is a
a. Resident citizen
b. Resident alien
c. Non-resident alien engaged in trade or business
d. Non-resident alien not engaged in trade or business
2. Who is not a resident alien?
a. An alien who stayed in the Phil. For more than two years
b. An alien who married and stayed in the Phil. For one year
c. And alien who stayed in the Phil. For more than one year
d. An alien who established his intention before the CIR to stay in the Phil. For an extended period of time
3. Which taxpayer is not a natural person?
a. Resident citizen
b. Taxable estate
c. Non-resident alien engaged in trade or business
 d. Non-resident alien not engaged in trade or business
4. A Filipino who has been abroad for more than 183 days is classified as a
a. Resident alien c. Non-resident citizen
b. Non-resident alien d. Non-resident citizen not engaged in trade or business
5. Which of the following is not an income taxpayer classification?
a. Resident citizen c. resident foreign corporation
b. Non-resident alien d. general professional partnership
6. An American who showed proof to the satisfaction of the Commissioner of Internal Revenue of his intention
to stay in the Philippines as an immigrant classified as a
a. resident citizen c. NRA – ETB
b.Resident alien d. NRA – NETB
7.A Japanese who is staying in the Philippines for 183 days is a
A. Resident alien
b.Non-resident alien
c. Non-resident alien engaged in trade or business
d Non-resident alien not engaged in trade or business
8.A Canadian who is staying in the Philippines for more than one year is a
a. Resident alien
b. Non-resident alien
c. Non-resident alien engaged in trade or business
d. Non-resident alien not engaged in trade or business
9.An alien who stayed less than one year in the Philippines is classified as a non-resident alien not engaged in
trade or business if he stayed herein for less than
a. 180 days c. 183 days
b. 1 year d. 2 years
10.A corporation incorporated according to Philippines laws is a
a. Domestic corporation c. non-resident corpo
b. Resident corpo d. de jure corpo
11.A foreign corporation which is not authorized to conduct business in the Philippines is a
a. Domestic corporation c. non-resident corpo
b. Resident corpo d. de jure corpo
12.A foreign corporation which operates a branch in the Philippines is a
a. Domestic corporation c. non-resident corpo
b. Resident corpo d. de jure corpo
13. A partnership which dominantly operates business abroad is a
a. Domestic corporation c. non-resident corpo
b. Resident corpo d. de jure corpo
14. Which is required to pay income tax?
a. Revocable trust c. Co-ownership
b. Estates under extrajudicial settlement d. Business partnership
15. Which is not an income taxpayer?
a. Non-resident foreign corporation
b. Non-resident alien not engaged in trade or business
c. Joint venture engaged in energy operation pursuant to a service contract with the government
d. Irrevocable trusts
16. Which of the following taxpayers is taxable only on income earned from the Philippines?
a. Resident alien c.resident citizen
b. Domestic corporation d. all of these
17. All of the following are taxable only on income earned from sources within the Philippines, except
a. Resident alien c. non-resident corporation
b. Non-resident citizen d. domestic corporation
18. Which is taxable on world income?
a. Resident corporation c. resident citizen
b. Non-resident citizen d. resident alien
Which is correct with regard to the final income taxation?
a. Taxpayers need to file an income tax return
b. It cover all items of passive income from whatever sources
c. It applies to all items of gross income of any non-residents sources within the Philippines
d. It applies to passive income earned abroad
Which statement is correct regarding final income tax?
a. Items of income subjected to final tax can still be subjected to regular tax
b. Final tax applies only on certain passive income earned within Philippines
c. Items of income exempt under final tax are subject to regular tax
d. Final income tax applies to all passive income from Philippines
Interest income from which of the following sources is subject to final income tax?
a. Lending c. Bond investment
b. Mortgage loans d. Money market placements
The final tax does not apply to interest on (select the best answer)
a. Long-term deposit c, Deposit substitute
b. Trust funds d. Promissory notes
The exemption on final tax on interest from long-term deposit is not applicable?
a. Citizen individuals c. Residents corporations or individuals
b. Corporations d. All of these
Which interest income is not subject to any income tax?
a. Interest income from discount notes
b. Interest income from bonds issued by a bank
c. Imputed interest
d. Interest income from deposit substitute
The final tax rates on pre-termination of long-term deposits is not relevant to
a. Any corporations c. Residents aliens
b. Residents citizens d. Non-residents citizens
Which of the following is subject to 15% final tax on interest from foreign currency deposits made with
Philippines banks?
a. Non-resident corporation
b. Non-resident alien engaged in trade or business
c. Non-resident alien not engaged in trade or business
d. Resident alien
The following are subject to final tax on all income from sources within the Philippines. Which is the
exception?
a. Non-resident foreign corporation
b. Non-resident alien not engaged in trade or business
c. Non-resident alien engaged in trade or business
d. None of these
The interest income from long-term peso deposits made with foreign banks is
a. Subject to 20% final tax c. Subject to regular tax
b. Exempt from any tax d. None of these
What is the final tax on interest income on 6-year deposit on dividends?
a. 20% c. 5%
b. 12% d. 0%
Which of the following recipients is exempt from final tax dividends?
a. Residents citizenship c. Resident corporation
b. Non-resident alien d. Resident alien
A dividend declaration in 2019 is subject to a final tax of?
a. 6% c. 10%
b. 8% d. 20%
Dividends declared by a resident corporation is
a. Exempt from tax
b. Subject to 10% final tax
c. Subject to regular income tax
d. Subject to 20% final tax
Between the date of declaration and the date of record, BCD Inc. sold as investment representing stock of ABC,
INC., a domestic corporation. Which statement is correct?
a. ABC, Inc. shall withhold 10% dividend tax if the buyer of the sale is an individual
b. ABC, Inc. shall withhold 10%dividend if the buyer of the sale is a corporation
c. ABC, Inc. shall withhold 10%dividend if the buyer of the sale is a individual
d. ABC, Inc. shall withhold 10%dividend if the buyer of the sale is a corporation
Which is covered by final tax?
a. Interest income from foreign banks
b. Share in the net income of a joint venture
c. P10,000 taxable prizes from the Philippines
d. Share in the net income of a general professional partnership
Which is not subject to 20% final tax?
a. Interest income from trust funds
b. Royalties from musical compositions
c. P11,000 worth of prizes
d. Winnings
Which is not subject to 10% final tax?
a. Royalties from literary works
b. Dividends from a domestic corporation
c. Share in the net income of a business partnership
d. Royalties from a business trademark
Which of the following taxable?
a. Prize on sport competitions sanctioned by the national sports organization
b. Prize from dance competition abroad
 c. Nobel prize
d. Any prize received without effort
Which is the following is taxable to a final tax
a. Winnings exceeding P10,000
b. Winnings not exceeding P10,000
c. Winnings from PCSO or lotto
d. All of these
Prizes from sources abroad is subject to final tax
a. If the amount of prizes exceeds P10,000
b. If the amount of prizes does not exceed P10,000
c. If it is given to the taxpayers without effort
d. Under no circumstance
The following winnings are exempt from tax, except one. Which is the exception?
a. Jueteng winnings
b. Lotto winnings exceeding P10k
c. PCSO winnings not exceeding P10k
d. All of these
Which of the following is exempt from final tax?
a. Interest income earned by a bank from deposits in another bank
b. Royalties from books
c. Interest income earned by a bank from lending activities
d. All of these
Dividend income from domestic corporations is subject to final tax effective
a. 2000
b. 1999
c. 1998
d. 1997
Prizes arising from sources within the Philippines may be
a. Subject to final tax
b. Subject to regular tax
c. Exempt from tax
d. Exempt or subject to final tax or regular tax
Any royalties earned abroad by a non-resident corporation is
a. Not subject to Philippines income tax
b. Always subject to final tax
c. Subject to either final tax or regular tax
d. Always subject to regular tax
The winnings of a resident alien form abroad is
a. Subject to regular tax
b. Subject to final tax
c. Subject to either final tax or regular tax
d. Not subject to Philippine income tax
Royalty income of a domestic corporation from abroad is
a. Subject to regular tax
b. Subject to final tax
c. Subject to either final tax or regular tax
d. Not subject to Philippine income tax
Winnings from PCSO are generally
a. Exempt from any tax
b. Subject to regular tax
c. Subject to 20% final tax
d. Subject to both final and regular tax
The final tax rates on income are generally similar to the following taxpayers, except one. Select the exception
a. Corporation
b. Resident alien
c. Non-resident citizen
d. Non-resident corporation
The tax informer’s reward may be granted to
a. Officials of the BIR
b. Public officials or employees
c. Close relatives of public government employees
d. Relatives of government employees beyond the 6th degree of consanguinity
Which is not subject to final tax?
a. Compensation to non-resident aliens not-engaged in trade or business
b. Fringe benefits of supervisory and managerial employees
c. Income of non-resident foreign corporations
d. Fringe benefits of rank and file employees
Which of the following is exempt from final tax?
a. Winnings in competitions aliens sponsored by local trading company
b. Prizes in body building competitions
c. Dividends from foreign corporation
d. Winnings from casino