1. Which of the following is subject to VAT? C. The payment is passed in audit by the COA.

A. Sale of non-food agricultural products in their original state by farmers. D. It is part of a lawmaker's pork barrel.
B. Services of non-VAT person subject to percentage tax.
C. Sale or importation of agricultural and marine food products in their original state. 8. Crisostomo died on July 31, 2014. His estate tax return should be filed within:
D. None of the above. A. Six months from filing of the notice of death.
B. Sixty days from the appointment of an administrator.
2. Which of the following is deductible expense to arrive at the taxable income? C. Six months from the time he died on July 31, 2014.
a. Personal, living or family expenses. D. Sixty days from the time he died on July 31, 2014.
b. Any amount paid for new buildings or for permanent improvements, or betterment made of increase the
9. The following are the similarities of the inherent power of taxation, eminent domain and police power
value of any property or estate
except:
c. Any amount expended in restoring property or in making good the exhaustion thereof which an allowance
A. They are necessary attributes of sovereignty.
is or has been made.
B. They affect all persons or the public
d. Premiums paid or any life insurance policy covering the life of any officer or employee, when the
C. They interfere with private rights and property
immediate family member of the insured officer or employee is directly the beneficiary.
D. They are legislative in implementation.
3. Pheonix Resources Corp., a corporation registered in Norway, has a 50MW electric power plant in San
10. No person shall be imprisoned for non-payment of:
Jose, Batangas. Aside from Pheonix’s income from its power plant, which among the following is
A. Property Tax B. Excise Tax C. Poll Tax D. All kinds of taxes
considered as part of its income from sources within the Philippines?
a. Gains from the sale to an Ilocos Norte power plant of generators bought from the United States. 11. On July 31, 2014, Esperanza received a preliminary assessment notice from the BIR demanding that she
b. Interests earned on its dollar deposits in a Philippine bank under the Expanded Foreign Currency pays P180,000 deficiency income taxes on her 2012 income. How many days from July 31, 2014 should
Deposit System. Esperanza respond to the notice?
c. Dividends from a two-year old Norwegian subsidiary with operations in Zambia but derives 60% of its A. 180 days B. 30 days C. 60 days D. 15 days
gross income from the Philippines.
d. Royalties from the use in Brazil of generator sets designed in the Philippines by its engineers. 12. The distinction of a tax from permit or license is that a tax is:
a. Imposed for regulation.
4. Statement 1: Itemized deductions from income should be duly supported by vouchers or receipts. b. One which involves an exercise of police power.
Statement 2: Only business expenses may be deducted from the income of taxpayers. c. One in which there is generally no limit on the amount that may be imposed.
a. First statement is true while second statement is false. d. Imposed through the provisions of the Constitution.
b. Both statements are true.
c. First statement is false while second statement is true. 13. Which of the following is not an element of double taxation?
d. Both statements are false. A. Two taxes
B. Same subject matter
5. In filing the estate tax return, a CPA Certificate is required when the gross estate: C. Same amount
A. exceeds P2,000,000 D. Same year
B. reaches P200,000
C. exceeds P200,000 14. A nonresident alien individual who shall come to the Philippines shall be deemed a nonresident alien
D. reaches P2,000,000 along doing business in the Philippines if he stays therein for an aggregate period of how many days
during any calendar year?
6. Properties owned before marriage and brought into the marriage are generally classified as: a. More than one hundred eighty-three (183) days.
I. Exclusive properties under conjugal partnership of gains. b. One hundred eighty (180) days or less.
II. Common properties under absolute community of properties. c. More than one hundred eighty (180) days.
A. Only I is correct C. Both I and II are correct d. More than one hundred ninety (190) days.
B. Only II is correct D. Both I and II are incorrect
7. Money collected from taxation shall not be paid to any religious dignitary EXCEPT when: 15. There shall be levied, collected and paid for each taxable year upon the gross income received by every
A. The religious dignitary is assigned to the Philippine Army. alien individual employed by regional or area headquarters and regional operating headquarters
B. It is paid by a local government unit.
 established in the Philippines by multinational companies from such regional or area headquarters and 19. Which of the following is not expressly provided for by the Philippine Constitution?
regional operating headquarters, a tax equal to: A. Due process of law.
a. Twenty-five percent (25%) of such gross income. B. Equal protection of laws.
b. Twenty percent (20%) of such gross income. C. Progressive system of taxation.
c. Fifteen percent (15%) of such gross income. D. Prohibition against double taxation.
d. Ten percent (10%) of such gross income.
20. A local government unit (LGU) imposed taxes on the steam boilers of an electric company. The
16. A married resident citizen has five (5) qualified dependent children. The following information pertains Department of Labor and Employment also imposed fees on the said steam boilers. There is no conflict
to his income and expenses in the year 2014: between the two impositions on the same subject matter because:
Salary, net of P20,000 withholding tax P380,000 A. The former is exercising the power of taxation while the latter is exercising the police power.
Interest income, bank deposit-BPI, Manila 50,000 B. The purpose of the former is to raise revenue while the purpose of the latter is for regulation.
Yield from money market placement, State Investment House, Manila 30,000 C. There is no direct duplicate taxation since there are two different taxing authorities: the local
Rent expense, apartment house 36,000 government and the national government.
Health insurance premium paid 5,000 D. All of the above are correct.

How much is the taxable compensation income? 21. 1st statement. To require businesses to register first with the government regulatory agency is an exercise
a. P 400,000 c. P250,000 of the taxing power of the State.
b. P 336,000 d. P230,000 2nd statement. Non-compliance to business registration renders the business illegal.
a. 1st statement is true while 2nd statement is false.
17. The following information are available relating to the computation of estate tax of a resident decedent b. 1st statement is false while 2nd statement is true.
who died in August 29, 2015: c. Both statements are true.
d. Both statements are false.
Australia - Net estate P100,000 and estate tax paid of P3,500 New
Zealand - Net estate of P200,000 and estate tax paid of P5,000
22. On January 15, 2014, a VAT-registered domestic corporation, engaged in the real estate business, sold
Philippines - Net estate of P200,000
land and building for P10 million. Is the sale subject to Value-added tax (VAT)?
a. No, because the property sold does not form part of its goods available for sale.
Compute for the estate tax still due after foreign tax credit.
b. No, because the sale of the property was only a one-time transaction.
A. P6,000 B. P6,500 C. P7,000 D. P8,000
c. Yes, because the sale of the property was made in the ordinary course of trade or business of the
18. The following data were provided by Air Asia, international carrier doing business in the Philippines: corporation, being engaged in the real estate business.
d. Yes, because all sales of property whether used in business or not are subject to value added tax
Gross receipts, sales of tickets in the Philippines (Manila to Taipei flight) P8,000,000 (VAT).
Gross receipts, sales of tickets in Japan (Manila to Tokyo flight) 5,000,000
Gross receipts, sales of tickets in Japan (Tokyo to manila flight) 3,000,000 23. The records of a resident citizen revealed the following income (all amounts at gross) from Philippine
Gross receipts, sales of tickets in the Philippines (Manila to Hongkong flight), 1,000,000 sources for the taxable year 2014:
passenger were endorsed to another international airline which airlifted them Interest on bank deposit P30,000
from Manila Royalty from patented invention 50,000
Gross receipts, sales of tickets in the Philippines (Manila to Los Angeles flight), 4,500,00 Royalty from copyrighted books 40,000
passengers were transshipped in Tokyo to Los Angeles by another airline Prize won in the Singing Bee contest 7,500
(flight from manila to Tokyo - 5 hours; flight from Tokyo to Los Angeles - 10 Share from professional partnership 25,000
hours) Dividend from San Miguel Corporation 10,000
Expenses 4,000,000 Lotto winnings 20,000
The total final income taxes withheld amount to:
How much was the Philippine income tax due and payable? A. P21,000 B. P21,750 C. P22,500 D. P24,250
a. P5,250,000 c. P387,500
24. In which of the following debts is legal compensation proper? When one of the debts
b. P 537,500 d. P287,500
a. Arises from the obligation of a depository
 b. Arises from a voidable contract 30. Timothy died leaving a house and lot to Rudolf on March 31, 2014 which was questioned by Sander. It
c. Arises from a claim for support by gratuitous title is under litigation but the parties have started an extra-judicial settlement. The last day for the payment of
d. Consists in civil liability arising from penal offense estate tax if extended shall be:
A. March 21, 2016 B. September 30, 2016 C. September 30, 2019 D. April 30, 2016
25. Under absolute community of property, which of the following is a community property?
A. Property inherited by the surviving spouse during the marriage 31. Tax of a fixed proportion of the value of the property with respect to which the tax is assessed and requires
B. Property bought during the marriage using the salary of the decedent earned before marriage the intervention of assessors or appraisers to estimate the value of such property before the amount due from
C. Personal belongings (e.g. clothes, shoes, etc.) bought during the marriage for the exclusive use each taxpayer can be determined is known as:
a. Specific b. Ad valorem c. Special or regulatory d. Fiscal
of the decedent
D. Jewelry inherited by the decent during the marriage
32. The following are the powers of BIR except:
26. If transfer in contemplation of death, revocable transfer or property passing under general power of A. The assessment and collection of all national revenue taxes.
appointment is made created, exercised or relinquished for consideration in money or money’s worth, but B. The execution of all judgments in all cases decided in its favor by the CTA and the ordinary courts
there is no bona fide sale for an adequate and full consideration in money or money’s worth, the gross C. The enforcement of all forfeitures, penalties and fines connected with national internal revenue taxes
estate will include: D. The assessment and collection of custom duties
A. Fair market value of such property at the time of transfer
33. Statement 1: Symbiotic relation is the reason why the government would impose donor’s tax on property
B. Historical cost of such property at the time acquired.
donated by a resident citizen located outside the Philippines.
C. Excess of the fair market value of the property at the time of death over the value of the
Statement 2: Jurisdiction is the reason why citizens must provide support to the state so the latter could
consideration received therefore.
continue to give protection.
D. Fair market value or the assessed value of such property, at the time of death, whichever is higher. a. Both statements are true c. Only statement 1 is correct
b. Both statements are false d. Only statement 2 is correct
27. The following selected data were taken from the Estate of Ed Sados:
Claim against an insolvent person (fully uncollectible) P 500,000 34. Which among the following is not a tax-free donation?
Claim against a person who absconded (fully uncollectible) 300,000 a. Donation for prizes to be given to athletes in local sports competitions held in the Philippines
Claim against an insolvent person (20% collectible) 100,000 sanctioned by a national sports association.
How much should be deducted from the gross estate? b. Net gifts made by an individual to a non-stranger in the amount of P100,000 during the calendar
A. P 80,000 B. P 100,000 C. 580,000 D. 880,000 year.
c. A cash donation amounting to P1 million made to a candidate last election who is aspiring for the
28. A married couple donated a conjugal property to their son who is getting married. Which of the following position of Senator which donation was reported to the COMELEC.
statements is incorrect in connection with the donation? d. Renunciation by a surviving spouse of his share in the absolute community in favor of his common
A. The husband is the proper claimant of the dowry, being head of the family children with the decedent.
B. The husband wife shall file two separate donor’s tax returns.
C. The husband and the wife can claim P 10,000 dowry each. 35. A married non-resident alien donates shares of stock valued at P300,000 to his son who is getting married
D. The gross gift of the husband shall be one-half of the value of the donated conjugal property to a Filipina in the Philippines. Assuming there is reciprocity, how much is the gross gift and the exempt
dowry?
29. A dealer in securities has the following data for the year 2014: Gross gift Dowry Gross gift Dowry
Sales, shares held as inventory P 4,000,000 a. P300,000 P10,000 c. P150,000 Zero
Sales, shares held as investment 1,500,000 b. P300,000 Zero d. Zero Zero
Cost, shares held as inventory 2,000,000
Cost, shares held as investment 500,000 36. First statement: Transfer inter vivos to the National Government for public use is a deduction from the
Supplies expense, net of VAT 100,000 gross gifts.
Rent expense, net of VAT 200,000 Second statement: Transfer mortis causa to the National Government for public purpose is a deduction from
How much is the taxable net income assuming the dealer is single? BONUS the gross estate.
A. P 1,680,000 B. P 1,750,000 C. P 2,750,000 D. 1,730,000 a. True, true b. False, false c. True, false d. False, true
37. Panda Co. has the following data for a particular month: 42. For proceeds of life insurance not to constitute part of the gross estate
Gross receipts, domestic calls P5,000,000 a. Must have been taken out by the decedent upon his life.
Gross receipts, overseas calls (originating from the Phils.) 3,000,000 b. Must have designated the estate of the decedent as irrevocable beneficiary.
Purchases of supplies used in connection with domestic calls, net of VAT 300,000 c. Must have designated a third person as, the decedent’s executor or administrator as the irrevocable
Purchases of equipment used in connection with both domestic calls and beneficiary.
overseas calls, net of VAT 2,000,000 d. Must have designated a third person other than the estate, the decedent’s executor or administrator
Business expenses 1,000,000 as irrevocable beneficiary.

How much is the VAT payable assuming the corporation is VAT-registered and has registered its tax- 43. Statement I - If the estate is settled extra-judicially, the estate tax return should be filed within 2 years
exempt transactions under the VAT system? from date of death of decedent.
a. P920,000 b. P912,000 c. P684,000 d. P 567,500 Statement II - if the estate is settled judicially, the estate tax return should be filed within 5 years from
death of decedent.
38. The following, except one, are exceptions to the rule that tax exemptions must be strictly construed: Statement III - The value added tax return should be filed within 25 days from the close of the taxable
a. Where the statute granting the exemption provides for the liberal interpretation thereof. month.
b. The taxpayer does not fall within the purview of exception by clear legislative intent. Statement IV - the donor’s tax return is not required if the net gift does not exceed P 100,000.
c. Case of special taxes relating to special cases and affecting only special classes of persons. a. All statements are true.
d. Exemptions refer to public property. b. All statements are false.
c. Only one statement is true.
39. The ranch of the decedent was mortgaged to accommodate the request of his brother for a loan. The value of d. Only two statements are true.
the loan to the brother was not included as receivable in the gross estate of the decedent. What would be the
treatment of the unpaid mortgage on the ranch? 44. The gross receipts of A, a lessor from his residential units for the year, show (net of VAT):
a. Deductible from the gross estate Monthly Rent/ Unit No. of Units Total
b. Not deductible from the gross estate P 10,000 20 P 2,400,000
c. Deductible form the gross income of the estate 12,000 10 1,440,000
d. Deductible either from the gross estate or the gross income of the estate 14,000 6 840,000
16,000 10 1,920,000
40. The taxable income before income tax of Elaine Corporation for the current year was P500,000. During
the year, the corporation received the following refund of taxes paid in previous years and recoveries of accounts The output VAT is
written off, all of which were credited to miscellaneous income: a. P 230,400 b. P 331,200 c. P 504,000 d. P 792,000
Refund of percentage tax, P20,000
Refund of income tax, P50,000 45. Which of the following is not a basic principle of a sound taxation system?
Bad debt recovered (allowed as deduction), P30,000 a. It should be capable of being effectively enforced.
Bad debt recovered (disallowed as deduction), P15,000 b. It must be a progressive tax.
c. It must be sufficient to meet government expenditures and other public needs.
How much would be the income tax payable of the corporation for the current year? d. It should be exercised to promote public welfare.
a. P150,000 c. P115,500
b. P130,500 d. None of the choices 46. A dealer in securities has the following data for the year 2012
Sales, shares held as inventory P 4,000,000
41. Which of the following statements is not correct? Sales, shares held as investment 1,500,000
a. The sharing of heirs in testamentary succession must satisfy the rules on legitime. Cost, shares held as inventory 2,000,000
b. When a compulsory heir is given by will less than his legitime, the provisions of the will should Cost, shares held as investment 500,000
be modified in such a way that he will receive his legitime. Supplies expense net of VAT 100,000
c. The CIR may examine the bank deposit of a decedent for the purpose of determining his gross Rent expense, net of VAT 200,000
estate even if the estate did not request for a compromise on the ground of financial incapacity.
d. The P 500,000 standard deduction for medical expenses for estate tax purposes is a legal How much is the taxable net income assuming the dealer is married with a qualified dependent niece, 18 years
mechanism to further exempt the less privileged estate and heirs from tax burden. old person with disability?
A. P 1,625,000
 B. P 1,650,000
C. P 2,650,000
D. not subject to income tax

47. A nonresident alien donor gifted his son and his daughter in law on account of their forthcoming marriage in
the Philippines. The maximum exempt dowry was:
Gift to Donee-Son Gift to Donee-Daughter-in-Law
A. P 10,000 P 10,000
B. P 10,000 Zero
C. Zero Zero
D. Zero P 10,000

48. Joseph sold his apartment house to Evelyn, his best friend, for P 1,000,000. The fair market value of the
land at the time of sale was P 1,500,000. For donor’s tax purpose, which of the following statements was correct?
A. Joseph would be subject to donor’s tax at 30% based on P 500,000.
B. Joseph was not subject to donor’s at 30% based on P 1,500,000.
C. Joseph was not subject to donor’s tax but to 6% capital gains tax based on the selling price.
D. Joseph would be subject to donor’s tax or capital gains tax depending on his choice

49. Sunset Insurance Company, a domestic corporation, had the

Health and accidence insurance P 2,340,000
Motor vehicle insurance 1,250,000
Life and disability insurance 1,850,000
Property insurance 2,840,000

The percentage tax is:

A. P 83,800 B. P 92,500 C. P 272,000 D. P 414,000

50. In taxation, the following is included in the term corporation, except

a. Partnership
b. Joint stock companies
c. Joint venture
d. Joint accounts