ICARE Preweek Taxation

No. 125 Brgy.
San Sebastian
Lipa City, Batangas, Philippines
Mobile : 0927 283 8234
Telephone : (043) 723 8412
Gmail : www.icarecpareview@gmail.com
Preweek Lecture Batch 3

Resident Alien---same effect @ resident citizen in terms of transfer tax
1. Your client is Mr. Irving Ackerman, an American residing in the Philippines, consulted you on
how he can transfer properties; composed of family home valued at Php11,000,000 and cash in
bank amounting to Php3,000,000, to his lone son with a minimum tax consequence . What will
lone means solo
you advise Mr. Irving Ackerman? a. Family Home---- capital asset subj at capital gain----6%
11,000,000 X 6% = 660,000 capital gain tax
a. Sell all his properties in favor of his son. b.
b. Incorporate and give all stockholdings to his son. c.---sale, CGT
c. Liquidate, convert all his properties into cash. d. subject is estate tax ---DEDUCTION 5M and 2M
d. Donate his property to his son, mortis causa.

2. Who are allowed to withhold VAT from its VAT suppliers?
a. Entities, organization, business or corporation duly registered with Philippine
Economic Zone Authority; no
b. Non-resident individuals and corporation; no
c. Government or any of its instrumentalities including government owned and controlled
corportation;
d. Resident Foreign Corporation doing business in the Philippines.
3. Who makes revenue regulations?
a. Secretary of Finance upon recommendation of commisioner of internal revenue
Secretary of finance----president---makes revenue regulation
b. Commissioner of Bureau of Internal Revenue under nya sina BIR & BOC
c. Board of Accountancy
d. Commissioner of Bureau of Customs
4. Which of the following may be a creditable withholding tax?
a. documentary stamps tax
b. Income tax
c. Excise tax
d. Percentage tax
5. The Run Against Tax Evaders (RATE) program of the Bureau of Internal Revenue is to eradicate?
eradiacte means elimante
a. Underground economy;
b. Smugglers;
c. Evaders;
d. Unregistered taxpayers.
6. Refers to a local sale of service by VAT-registered person to a person or entity who was granted
indirect tax exemption under the special laws or international agreement?
a. Automatic zero-rated transactions; Vat
b. Effective zero-rated transactions; ---NEED CONFIRMATION ------Output Vat
before you may deduct @BIR -------Zero rated "indirect tax exemption"
c. VAT exempt transaction;
d. Zero-rated transactions.
7. Which of the following are zero-rated transactions.
a. Sale of services to Asian Development Bank
b. Sale of services to International Rice Research Institute;
c. Sale of gold to Bangko Sentral of Pilipinas; BSP---before is zero rated but under Create law vat exempt
d. Sale of serivces to duly registered and accredited enterprises with Philippines
Economic Zone Authority. Input tAX ----aCTUAL
>>>>from actual purchase from vat supplier
8. What input taxes may be credited? >>>>Importation
a. Input taxes from non-vat suppliers; false ----eSTIMATE

>>>tRANSITIONAL & PRESUMPTIVE
b. Input taxes from puchase of direct labor; false its only for purchase of goods
c. Input taxes from importation of goods for sale; Input vat
d. Input taxes from importation of personal and household effects. Exempt
9. The input taxes on zero-rated sales of goods may, at the option of the VAT-registered person
be, except:
a. Refunded; TRUE
b. Converted into tax credit certificates; TRUE
c. Carried over to the next quarter; TRUE---QUARTER TO QUARTER, MONTHLY TO MONTHLY
NOT ENTIRELY TRUE, bec pwede nmn
d. Used as payment of other internal revenue tax, except, wtihholding tax.
HINDI PWEDE AGAD IPANGBAYAD ANG INPUT NEED 1ST TO CONVERT AT CERT.
1|P a g e AESCARTIN/TLOPEZ/JPAPA
No. 125 Brgy. San Sebastian
Mobile : 0927 283 8234
Telephone : (043) 723 8412
10. A refund of input taxes must be made within: from the time of transaction
a. 2 years
b. 3 years
c. 5 years
d. 10 years
11. The Comissioner is given how many days to decide a refund of input taxes?
a. 180 days 120 or 90 days????
b. 160 days
EQUIVALENT TO DENIAL-without confirmation of BIR after filling
c. 120 days equivalent to 4 months
d. 90 days
12. When may VAT registered person claim input taxes as an allowable deductions from his
income tax return? pang deduct mo kay ITR-----DEDUCT MO AT EXPENSE incase you are non-vat
a. Input taxes from zero-rated sales; you may claim as input tax
b. Input taxes from exempt sales; you may claim as deduction
c. Input taxes from capital goods; capital goods???
d. Input taxes from Export sale. you may claim as input tax
13. A documentary stamp tax is necessary in the following except: ---DST
a. Original issuance of shares of stocks;
b. Acceptance of a foreign bill of exchange; ---this is negotiable instrument
c. Esatate tax payment;
d. transfer of shares of stocks of a domestic corporation.
14. Application for permission to change the method of accounting employed and the basis upon
which the return is made shall be filed within: with in 90 days
a. 90 days; 3 MONTHS ---change in accounting policy, change in accounting method
b. 60 days;
c. 30 days;
d. 15 days. EXEMPT
15. A non-stock, non-profit organization made an importation of agricultural food product in its
original state from a chinese farmer amounting to Php2,240,000.00, such importation shall be:
a. Subject to 12% VAT;
b. Subject to zero rated VAT;
c. Exempt from VAT;
d. Subject to 3% other percentage tax.
16. Which of the following is VAT-able?
a. Sale or importation of fertilizer, ordinary feeds, seeds, seedlings and fingerlings; EXEMPT
b. Importation of professional instruments and implements wearing apparel, domestic
animals and personal household effects; EXEMPT
c. Services of agricultural contract growers and milling for others of palay into rice, corn
into grits and sugar cane to raw sugar; EXEMPT
d. Dental and Veterinay services paid to professional. SUBJECT TO VAT----IF FACILITY-vat exempt
17. Which of the following is a zero-rated transaction?

pa-note: a. Sales by non-agricultural, non-electrical and non-credit cooperatives duly registered
Zero- rated from vat ---exempt
>>>sales of goods
with cooperative development authority;
-sale to pagcor, and b. Sale of power or fuel generated through renewable sources of energy.
internation organization
-sale to outside supplier c. Export sale of non-vat registered individuals; non-vat----hindi cya allowed
non resident buyer d. Sale by agricultural cooperatives duly registered with Cooperative Development
for personal belonging
of filipino outside Authority;
exempt-vat need approval by BIR---to be effectively zero rated
transaction
- sale to export18.supplier
Which of the following is an effectively zero-rated transaction?
a. supplier
-sale to export enterprises Educational services rendered by private educational institutions duly accredited by
but their business DEPED, CHED and TESDA; --exempt from vat
nature require
exportation b. Services rendered by regional or area headquarters established in the Philippines by
-exempt from OMNIBUS multinational corporations which act as supervisory, communication and coordinating
>>>sale of services
centers; exempt
for export businessc. Sale of services to Asian Development Bank; transaction with international authority----subject zero rated sales
d. Service of banks, non-bank, financial intermediaries. vat exempt ----subject percentage tax
included pagcor, ADB, casino----subject to effectively zero rated transaction
Mobile : 0927 283 8234
Telephone : (043) 723 8412
19. All of the following are VAT-exempt, which is the exception?

a. Sale , importation, printing of magazines devoted principally for paid advertisements; VATABLE---it
subject to criteria
b. Importation of fuel, goods, and supplies by person engaged in international shipping before become
or air transportation; zero -rated sales exemption
c. Sale or importation of passenger or cargo vessels and aircrafts for domestic or

???????????????????
international shipping or air transportation; di po ba not entirely true po un, kasi sa cargo subject s zero rated,
if vat exempt hindi po cya allowed for claim input vat??????
Vat ---EXEMPT d. Gross receipts from lending cooperatives.
20. Mr. Santos sold his ancestral house and lot in the amount of Php5,000,000.00, such
transaction will be subject to: this is capital asset not in the ordinary course of business----exempt from vat
no pay CGT--6%
a. 12% VAT
b. Zero rated VAT no
c. Exempt from VAT
d. 3% other percentage tax no
21. Your client, Mr. Aegis, is a local trader. Which laws do you recommend for Mr. Aegis not to
read?
a. National Internal Revenue Code;
b. Implementing Rules and Regulation of NIRC;
c. Tariff and Customs Code;
d. Local Government Code.
22. A non-resident foreign corporation receives royalty income from the Philippines, which of
the following is correct?
a. Subject to final withholding tax of 10%;
b. Subject to final withholding tax of 20%;
c. Subject to final withholding tax of 25%; NRF---GI --25% final withholding tax
d. Subject to Profit Remittance tax of 15%. JAN 1, 2021
23. Zeus a Domestic Corporation has incurred Rent Expense amounting to Php120,000.00. Zeus
paid the lessor a total Php120,000.00 without withholding 5% tax therefrom. How much rent
expense can Zeus claim as an allowable deductions? RENT INCOME is subject to creditable withholding tax 5%
a. 120,000 zero, kapag hindi k ngawithheld ng 5% withholding tax
---bec this is for advance payment to BIR----at hi ka nga
b. 60,000 nagwithheld(nagbayad) not liable for claiming as allowable deduction
c. zero
d. None of the above.
24. Which of the following is exempt from VAT?
a. Export sale by non-vat registered individuals; true
b. Foreigh Currency Denominated Transactions; subject zero rated
c. Sale of services to entities duly registered with PEZA; subject zero rated
d. Sale to Ramon Magsaysay Awards Foundation. subject to zero rated
25. A corporation is asked where to file first its income tax return? where file -----purpose for????
a. Securities and Exchange Commission;
b. Local City Treasurer of Corporation principal address or Municipality; no
c. Bureau of Internal Revenue;
d. Authorized Accredited Agent Banks. where to pay
26. How many tax return copies are required by the Bureau of internal revenue?
a. Duplicate theory purposes duplicate?
b. Triplicate 3-nagbibigay pa sa sec?
c. quadruplicate
d. As many as required by revenue officer.
27. When will a self employed individual file its 1st quarter income tax return?
a. on or before April 15 of current year.
b. on or before May 15 of the current year.
c. on or before July 15 of the current year.
Mobile : 0927 283 8234
Telephone : (043) 723 8412
d. on or before August 15 of the current year.

28. Construction by XYZ Construction Co. of concrete barrier for the Asian Development Bank in
Ortigas Center to prevent car bombs from ramming the ADB gates along ADB Avenue in
Mandaluyong City. Is subject to what business tax?
a. 12% VAT zero rated,, construction to subcontractor---and transaction with international authority
b. 0% VAT
c. Exempt from VAT
d. None of the above
29. Call Center operated by a domestic enterprise in Makati that handles exclusively the
reservations of a hotel chain which are all located in North America. The services are paid for in
US$ and duly accounted for with the Bangko Sentral ng Pilipinas. Is subject to: ---12% vat
a. 12% VAT BPO industry
{TRANSACTION OUTSIDE???] this is not ROHQ
b. 0% VAT
-service rendered for not resident client
c. Exempt from VAT -payment for foreign currency
d. None of the above under BSP
30. Sale of orchids by a flower shop which raises its flower in Tagaytay. Is subject to: ---12% vat
a. 12% VAT NOT SUBJECT TO EXEMPTION

b. 0% VAT
c. Exempt from VAT
31. In 2021, LeBron Dela Cruz, a resident Filipino citizen, received dividend income from U.S. –
based corporation which owns a chain of Filipino restaurant in the West Coast, U.S.A. The
dividend remitted to LeBron is subject to U.S withholding tax with respect to a non-resident alien
like LeBron. The dividend is subject to:
a. Final income tax Individual ----received dividend from foreign corporation----subject 25% (final income tax)
-from domestic--10%
b. Basic income tax -from RFC---20%
c. Capital gains tax -from NRFC--25%
d. Exempt from tax
32. Mirador, Inc., a domestic corporation, filed its Annual Income Tax Return for its taxable year
2011 on April 15, 2012. In the Return, it reflected an income tax overpayment of P1,000,000.00
and indicated its choice to carry-over the overpayment as an automatic tax credit against its
income tax liabilities in subsequent years. if you choose carry over the overpayment is irrecoverable
On April 15, 2013, it filed its Annual Income Tax Return for its taxable year 2012 reflecting a
taxable loss and an income tax overpayment for the current year 2012 in the amount of
P500,000.00 and its income tax overpayment for the prior year 2011 of P1,000,000.00.
In its 2012 Return, the corporation indicated its option to claim for refund the total income tax
overpayment of P1,500,000.00 only 500,000 he may claim as refund
Choose which of the following statements is correct.

a. Mirador, Inc. may claim as refund the total income tax overpayment of P1,500,000.00
reflected in its income tax return for its taxable year 2012;
b. It may claim as refund the amount of P500,000.00 representing its income tax
overpayment for its taxable year 2012;
c. No amount may be claimed as refund.
d. None of the above.
33. Which of the following transactions is exempt from value-added-tax?

a) Medical services such as dental and veterinary services rendered by professionals. VATABLE
b) Legal services.VATABLE
c) Services arising from employee-employer relationship.EXEMPT
d) Services rendered by domestic air transport companies. ---they are subject to vat----passenger exempt but cargo---
vatable
Mobile : 0927 283 8234
Telephone : (043) 723 8412
34. Which of the following transactions is exempt from value-added-tax?
a) Services rendered by international shipping or air passenger transport operations.exempt

b) Services rendered by artist, actors and athletes. --subject to vat (if exceed in treshold) GENERAL RULE
c) Generation, transmission and distribution of electricity. ------yes vatable dahil ni ralph recto....bad
d) Services rendered by professionals such as CPAs, Physicians and Lawyers. if not stated not
--subject to vat (if exceed in treshold) GENERAL RULE alternative use
35. The Secretary of Finance is authorized to suspend the imposition of Minimum Corporate
Income Tax on any corporation which suffers losses on account of: suspend to pay MCIT????
a. Economic Sabotage;
b. Insolvency;
c. Force Majeure;
d. Corporate Rehabilitation.
36. When may the Bureau of Internal Revenue terminate taxing period, EXCEPT?
a. When the taxpayer is retiring from business subject to tax; terminate
b. When the taxpayer went abroad; not liable to pay,
c. When the taxpayer removes his property from Philippines; terminate
d. When the taxpayer hides or conceals his property; taxable
37. Which among the following Government Owned and Controlled Corporations is taxable?
a. Philippine Amusement and Gaming Corporation.
b. Social Security System.
c. Philippine Health Insurance Company.
d. Philippine Charity Sweepstakes Office.
38. HWPD is the winning bidder to exclusively supply face shield and equipment required by the
City of Manila. During the month it had the following(amount given are exclusive of the VAT):
Sales Php400,000
Purchases of merchandise 80,000
Purchases of delivery equipment 5 years life exceed 1M--SPREADOUT 1,200,000
(1.2M x 12% =144,000/ 5 yrs /12mon =2,400)
Purchases of utilities (paid to Meralco) 30,000
How much VAT payable for the month: pa-note:
Output Vat (400,000 x 12%) = 48,000 [ before dec 31, 2021 ]
a. 36,000 Input
-month basis, acquired capital asset
@ claiming input vat
b. 32,400 >>merchandise (80,000 x 12%) = (9,600) >>not exceeding 1M ---expense outright
>>delivery machine = (2,400) >> if exceed 1M ----spreadout use useful life
c. 13,600 (1.2M x 12% =144,000/ 5 yrs /12mon )
(max 60 months)
d. 10,000 >>utilities (30,000 x 12% ) = (3,600)

Vat payable==================== 32,400 [ starting Jan 1, 2022 ]
>> expense outright all
39. Withholding tax rates of income payments made by top 20,000 private corporations to their
local/resident suppliers of goods?
a. 1%
b. 2%
c. 3%
d. 4%
Mobile : 0927 283 8234
Telephone : (043) 723 8412
40. First Statement: For a taxpayer using the accrual method, the recognition of income and
expenses will be determined using the all events test whereby the following requisites must
be met: (1) fixing of a right to income or liability to pay; and (2) the availability of the
reasonable accurate determination of such income or liability
Second Statement: To determine the 'reasonable needs' of the business in order to justify
an accumulation of earnings, the Courts of the United States have invented the so-called
'Immediacy Test' which construed the words 'reasonable needs of the business' to mean the
immediate needs of the business, and it was generally held that if the corporation did not
prove an immediate need for the accumulation of the earnings and profits, the accumulation
was not for the reasonable needs of the business, and the penalty tax would apply.
a.True,true; b.False,False c.True,False d.False,True.
July 1, 2020
41. Effective ________________, generally, the regular corporate income tax rate for
25%
domestic corporations, other than MSME, was reduced from ________
30% to _________.
a. 01 January 2021 30% 25%

b. 01 July 2020 30% 20%
c. 01 January 2021 30% 20%
d. 01 July 2020 30% 25%
e. None of the above
42. The regular corporate income tax applicable to domestic corporations is lowered to
20%
________ 100,000,000
when the domestic corporation has total assets of ______________ and net
taxable income of ________________.
5,000,000
a. 25% P100 million below P5 million and below

b. 25% P150 million below P10 million and below
c. 20% P100 million below P5 million and below
d. 20% P150 million below P10 million and below
43. Effective ____________, the regular corporate income tax for resident foreign corporations
Domestic Corp - July 1, 2020---20% or 25%
was reduced from 30% to 25%.
resident foreign corp - July 1, 2020---25%
>>special corporation
a. 01 July 2020 - RICA----same ---2.5% basis GPB
- OBU--April 11, 2021---25% basis TI
b. 01 January 2021 -NRFC -ROHQ ---Jan 1, 2022--- 25% basis TI
c. 01 July 2021 ----NONE non resident foreign corp.- Jan 1, 2021---25% --GI
d. 01 January 2022---RFC--ROHQ >>special corporation (OWNER OF)
- cinematographic film 25%--GI
e. None of the above - Equipment vessel 45%--GI
- Aircraft --7.5% GI
44. The regular corporate income tax for non-resident foreign corporations was reduced from
30% to 25% effective _____________.
a. 01 July 2020 ---DC & RFC

b. 01 January 2021 NRFC
c. 01 July 2021
d. 01 January 2022 RFC--ROHQ
45. In the computation of income tax due of corporations for the taxable year 2020, regardless
of the taxpayer’s annual accounting period, the taxable income shall be computed with
regard to the specific date of when sales, purchases and other transactions occur.
a. True average, or evenly
b. False
Mobile : 0927 283 8234
Telephone : (043) 723 8412
46. For the taxable year 2020, the income and expenses of corporations shall be deemed to
have been earned and spent equally for each month of the period/taxable year.
a. True
b. False
47. Statement 1: A one-person corporation is excluded from the definition of a corporation

under the CREATE Act.
Statement 2: A one-person corporation is instead regarded under the CREATE Act as an

individual taxpayer.
Statement Statement 2
1
a. True True
b. True False
c. False False
d. False True
effective create july 1, 2020
check if
48. Daft Punk Incorporated, a domestic corporation, had gross sales of P10 million, cost of sales
fiscal
or calendar of P6 million and operating expenses of P3 million for its fiscal year ended 31 March 2021,
its 3rd year of operation. Its total assets amounted to P5 million, and does not own land and
building where its business operations are conducted. The income tax due against Daft Punk
Incorporated is: Gross sales 10M
20% exempt @ MCIT---
less: COS (6M) incase of net loss
-total asset 10M
=Gross Profit 4M
a. P 300,000 less: OPEX (3M)
-Net Income 5M
b. P 250,000 =Net Income 1M

X 22.5% Fiscal year April 1 2020 to March 31, 2021
c. P 225,000
=Income tax due===225,000
d. P 200,000 3/12 x 30% = .075
e. None of the above 9/12 x 20% = .15
==========.225
49. Script Corp. is a domestic corporation which is on its 2nd year of operation during the year
exempt @ MCIT---
2021. Its net taxable income of for calendar year 31 December 2021 amounts to P10 incase of net loss
million. Its total assets, net of the value of the land where its business is situated amounts
to P50 million. The income tax due against Spirit Box Corp. is:
a. P3 million 10,000,000 x 25%
b. P2.5 million
c. P2.25 million
d. P2 million
50. For the taxable year 2021, HER Inc. incurred interest expense of P50,000 on its bank loan,
and at the same time earned P100,000 worth of interest income. For the year, its gross
assets is P100 million exclusive of the cost of the land of P7.5 million. It registered a taxable
income of P2.5 million. How much would be the allowable interest expense for the year
2021? taxable year 2021----tax rate 20%------arbitrage rate-----0%-meaning whole amount may claim
incurred interest expense in bank loan----50,000
a. P10,000 Interest income earned 100,000-------20% final tax -
Gross asset 100M exclusive of land---------not exceeding 100M
b. P25,000 Cost of land 7.5M
c. P41,250 Taxable income 2.5 M------not exceeding 5M
d. P50,000 allowable interest expense
Mobile : 0927 283 8234
Telephone : (043) 723 8412
51. There shall be allowed an additional deduction of ½ of labor training expense for skills
development of enterprise-based trainees enrolled in public senior, high schools, public
higher educational institutions, or public technical and vocational institutions subject to the
following condition(s):
a. The enterprise should secure a certification from the Department of Education (DepEd),
Technical Education and Skills Development Authority (TESDA) or Commission on Higher
Education (CHED)
b. The deduction shall not exceed 10% of the direct labor wage
c. A and B
d. Neither A nor B
interest expense in borrowing (loan)
52. Interest paid or incurred within a taxable year on indebtedness in connection with the
taxpayer’s profession, trade or business shall be allowed as a deduction from gross income,
provided the same also satisfies certain conditions. Which of the following
conditions/criteria is incorrect?
all of them is correct
a. The interest payment arrangement must not be between related taxpayers 3rd party relation--TRUE
b. The interest must not be incurred to finance petroleum operations
c. The interest was not treated as capital expenditure, if such interest was incurred in
acquiring property used in trade, business or exercise of profession i'm not sure????
d. All of the above
e. None of the above all of them is correct
53. Foreign-sourced dividends received by domestic corporations shall be exempt from tax
subject to the following conditions:
I. Foreign-sourced dividends are reinvested in the business operations of a domestic

corporation within the next 2 taxable years from the time the foreign-sourced dividends
were received must be within 1 year
II. Dividend fund shall be used to fund working capital, capital expenditures, infrastructure
projects, investment in domestic subsidiaries and dividend payments
III. Domestic corporation holds directly at least 20% in value of the outstanding shares of
the foreign corporation and held uninterruptedly the shareholdings for a minimum of 2
years from time of dividend distribution
Condition Condition 2 Condition

1 3
a. Correct Correct Correct
b. Correct Correct Incorrect
c. Correct Incorrect Incorrect
d. Incorrect Correct Correct
e. Incorrect Incorrect Incorrect
54. For calendar year 2021 financial statements, PAS 12 provides that components of tax
expense (income) may include “any adjustments recognized in the period for current tax of
prior periods” and “the amount of deferred tax expense (income) relating to changes in tax
rates or the imposition of new taxes”, among others (PAS 12.80.b and PAS 12.80.d)
a. True
b. False
55. Statement 1: For the calendar year 2021, deferred tax assets and liabilities as of 31
December 2021 need not be remeasured since the new tax rates are already in full effect. false
need to remeasure bec this will reflect the effect of new tax rate implemented july 1, 2020
Mobile : 0927 283 8234
Telephone : (043) 723 8412
Statement 2: The impact of remeasurement of deferred taxes is recognized in profit or loss

(i.e. provision for/benefit from deferred income tax), unless it can be recognized in other
comprehensive income or another equity account.
1
a. True True
b. True False
c. False False
d. False True
56. EXO, an offshore banking unit, will be subject to the 10% preferential tax rate for the
taxable year ending 31 December 2021.not applicable
OBU-SRFC effective TI-25%-april 11, 2021
a. True
b. False
57. BTS, a regional operating headquarters, will be subject to the 10% preferential tax rate for
the taxable year ending 31 December 2021.
ROHQ-SRFC-TI-25%- Jan 1,2022
a. True
b. False
58. The Monkees Inc. maintains its office in the City of Manila, but owns a banana plantation in
Tagum City, Davao del Norte. For purposes of qualifying for the imposition of the reduced
20% corporate income tax rate, the value of the land being used as banana plantation
should not be excluded in the determination of the total assets of The Monkees Inc.?
should be inlcuded
only excluded is the land where your office reside, plant & equipment
a. Yes
b. No i don't know if inlcuded and production facility(property)
59. For purposes of determining the applicability of the reduced 20% regular corporate income
tax rate on domestic corporations, the value of the land which shall be excluded in
determining the total assets of the corporation is limited to the particular land where the
business entity’s office, plant and equipment are located during the taxable year for which
the 20% income tax is imposed.
a. True
b. False
60. If the gross income of a private non-profit hospital from unrelated trade, business or activity
exceeds _______
50% of the total gross income derived by such institutions from all sources, the
100%
tax prescribed for domestic corporations shall be imposed on _______ of such institution’s
taxable income.
a. 30% 50%
b. 30% 100%
c. 50% 50%
d. 50% 100% application of predominance test
Mobile : 0927 283 8234
Telephone : (043) 723 8412
61. One of the conditions that must be satisfied in order for a domestic corporation will qualify
for the reduced corporate income tax rate of 20% is that the total assets should not be
more than Php100 million, exclusive of the land. For this purpose, are the total assets net of
any depreciation and allowance for bad debts?
a. Yes
b. No
62. Pursuant to Revenue Regulations No. 5-2021, what is the minimum corporate income tax
rate applicable for the calendar year 2020?
july 1, 2020
transitional period
2% + 1% = 3 /2 =1.5%
a. 0.5%
b. 1%
c. 1.5%
d. 2%
63. Prior to the effectivity of the CREATE Act, regional operating headquarters are not subject
to minimum corporate income tax. From 01 January 2022 to 30 June 2023, the minimum
corporate income tax rate applicable to regional operating headquarters is 1%.
a. True
b. False
64. Effective 01 July 2023, regional operating headquarters will revert to its status prior to
CREATE of not being subject to minimum corporate income tax. ROHQ- is liable to MCIT 2%
a. True
b. False
65. Non-resident foreign corporations are not subject to minimum corporate income tax.
a. True NRFC-basis GROSS INCOME

b. False
66. A domestic corporation with a taxable year ending on December 31 will be subject to 1%
MCIT for the year 2023. Back to 1.5%
a. True
b. False
67. Government-owned corporations, agencies and instrumentalities shall pay such rate of tax
upon their taxable income as are imposed upon corporations or associations engaged in a
similar business, industry or activity, except:
a. Social Security System (SSS)

b. Home Development Mutual Fund (HDMF)
c. Philippine Health Insurance Corporation (Philhealth)
d. All of the above
68. Everglow Corporation, a domestic corporation, has unappropriated retained earnings in

excess of its paid-up capital stock amounting to P20 million as of its fiscal year ended 30
September 2020. Everglow Corporation is subject to the 10% improperly accumulated
earnings tax as of 30 September 2020. appeal april 11,2020
still subject to IAET until year end

a. True
b. False
10 | P a g e AESCARTIN/TLOPEZ/JPAPA
Mobile : 0927 283 8234
Telephone : (043) 723 8412
69. Loona Inc., also a domestic corporation, has unappropriated earnings in excess of its paid-
up capital stock amounting to P50 million as of its fiscal year ended 31 March 2021. Loona
Inc., is subject to the 10% improperly accumulated earnings tax as of 31 March 2021.
a. True still liable pa rin

b. False
70. For its fiscal year ended 30 June 2021, Red Velvet Corp. has unappropriated earnings in
excess of its capital stock amounting to Php100 million. The improperly accumulated
earnings tax imposable against Red Velvet Corp. is:
a. P10 million
b. P7.5 million
c. P5 million
d. Zero
71. The final withholding tax on interest income derived by resident foreign corporations from
foreign currency deposits is 7.5%. changed 15%
a. True
b. False
72. The two-tiered rates of 5% and 10% tax on the gain derived by resident and nonresident
foreign corporations from the sale, transfer, or exchange of shares of stock not traded in
the stock exchange was replaced with a fixed rate of 15%.
a. True
b. False
73. Excess percentage tax payments as a result of the decrease of tax rate from 3% to 1%
starting 01 July 2020 may not be carried forward to the succeeding taxable quarter/s.
may be carried forward Opt---July 1, 2020

a. True 3% to 1%-------retroactive effect...
b. False
74. Percentage taxpayers who have overpaid taxes as a result of the decrease of tax rate from
3% to 1% starting 01 July 2020 until the effectivity of Revenue Regulations No. 4-2021 are
allowed for a tax refund in the event that:
a. The taxpayer shifted from non-VAT to VAT-registered status

b. The taxpayer has opted to avail the 8% income tax rate at the beginning of taxable year
2021
c. A and B
d. Neither A nor B
75. Sale of residential lot, intended for sale in the ordinary course of trade or business, valued
at P1.5 million is exempt from value-added tax. residential only
residential dwelling---
a. True
b. False
Mobile : 0927 283 8234
Telephone : (043) 723 8412
76. Sale of house and lot and other residential dwellings valued at P3,199,200 or less is exempt
from value-added tax.
a. True
b. False
77. Sale or importation of prescription drugs and medicines for cancer, mental illness and
kidney diseases is exempt from value-added tax beginning 01 January 2020.
a. True
b. False
78. Sale or importation of prescription drugs and medicines for diabetes, high cholesterol, and
hypertension is exempt from value-added tax beginning 01 January 2020.
a. True
b. False
79. Starting 01 January 2021 to 31 December 2023, the following items are exempted from
value-added tax: sale and importation----are all exempt
I. Capital equipment, its spare parts, and raw materials necessary for the production of
personal protective equipment components such as coveralls, gown, surgical cap,
surgical mask, N95 mask, scrub suits, goggles, and face shield, double or surgical gloves,
exempt
dedicated shoes, and shoe covers, for COVID 19 prevention
II. All drugs, vaccines, and medical devices specifically prescribed and directly used for the
treatment of COVID 19 exempt
III. Drugs for the treatment of COVID 19 approved by the Food and Drug Administration for
use in clinical trials, including raw materials directly necessary for the production of
drugs exempt
Statement Statement Statement

1 2 3
a. Correct Correct Correct
b. Correct Correct Incorrect
c. Correct Incorrect Incorrect
d. Incorrect Correct Correct
e. Incorrect Incorrect Incorrect
80. _______________ refers to any individual, partnership, corporation, Philippine branch of a

foreign corporation, or other entity organized and existing under Philippine laws and
registered with an Investment Promotions Agency excluding service enterprises such as
those engaged in customs brokerage, trucking or forwarding services, janitorial services,
security services, insurance, banking, and other financial services, consumers’ cooperatives,
credit unions, consultancy services, retail enterprises, restaurants, or such other similar
services, as may be determined by the Fiscal Incentives Review Board.
a. Domestic market enterprise

b. Registered business enterprise
c. Service enterprise
d. Other registered entities
Mobile : 0927 283 8234
Telephone : (043) 723 8412
81. Statement 1: Export enterprises may be granted an income tax holiday of 6 years to 8 years,
depending on the location and industry priorities. 6 yrs to 7 yrs
Statement 2: After the income tax holiday, export enterprises may avail of the special
corporate income tax rate for 5 years, or of the enhanced deductions for 5 years. 7 yrs
ECT or enhance deduction
1
a. True True
b. True False
c. False False
d. False True
82. Statement 1: Domestic enterprises may be granted an income tax holiday of 4 years to 7
years.
Statement 2: Upon expiration of the income tax holiday, domestic enterprises may only avail
of enhanced deductions for 10 years.
1
a. True True
b. True False
c. False False
d. False True
83. Facts: Oasis Corp. was registered with the Philippine Economic Zone Authority prior to the
effectivity of the CREATE Act. It was granted a 4-year income tax holiday and thereafter,
entitled to the 5% tax on gross income.
Statement 1: Oasis Corp. is about to commence the 3rd year of its 4-year income tax holiday
when the CREATE Act has been passed into law. Under the CREATE Act, Oasis Corp. is no
longer allowed to use the ITH for the remaining period specified in the terms and conditions
of its registration. Oasis Corp. will automatically be subject to the special corporate income
tax rate. FALSE, tatapusin ung nya pa muna...
Statement 2: Oasis Corp. may avail of the 5% special corporate income tax rate for a period
of 8 years. yes, at 8 yes pa pwede
1
a. True True
b. True False
c. False False
d. False True
84. You are engaged to audit the financial statements for the year ending September 30, 2021
with taxable income exceeding P5 million. How will the deferred tax assets and liabilities be
measured in the statement of financial position?
a. The deferred tax assets and liabilities relating to temporary differences from prior years
will still be measured using the 30% tax rate while deferred tax assets and liabilities that
originated during the current year will be measured using the 25% tax rate.
Mobile : 0927 283 8234
Telephone : (043) 723 8412
b. The deferred tax assets and liabilities relating to temporary differences from prior years
will still be measured using the 30% tax rate while deferred tax assets and liabilities that
originated during the current year will be measured using the 28.75% tax rate.
c. The deferred tax assets and liabilities will be measured using the 25% tax rate that have
been enacted by the end of the reporting period.
d. The deferred tax assets and liabilities will be measured using the 28.75% tax rate that
have been enacted by the end of the reporting period.
85. If dividends are declared after the reporting period but before the financial statements are
authorized for issue,
a. Dividend shall be recognized as liability.

b. Dividend shall not be recognized as liability and without disclosure in the notes.
c. Dividend shall not be recognized as liability but with disclosure in the notes.
d. All of the given choices are possible options of the management.
86. If non-adjusting events after the reporting period are material, non-disclosure could influence
the economic decisions that users make on the basis of the financial statements. Accordingly,
an entity shall disclose the following for each material category of non-adjusting event after
the reporting period:
Statement 1: The nature of the event
Statement 2: An estimate of its financial effect, or a statement that such an estimate cannot
be made.
a. Statement 1 only
b. Statement 2 only
c. Both Statement 1 and Statement 2
d. Either Statement 1 or Statement 2
87. The following are the powers of the BIR, except:

a. The assessment and collection of all national internal revenue taxes.
b. The execution of all judgments in all cases decided in its favor by the CTA and the
ordinary courts.
c. The enforcement of all forfeitures, penalties and fines connected with national internal
revenue taxes.
d. The assessment and collection of some customs duties.
88. 1st Statement:: The Commissioner of Internal Revenue shall have the power to inquire into
a taxpayer’s bank deposit in relation to all internal revenue taxes. only in case of estate tax, or how appply compromise
2nd Statement: The Commissioner of Internal Revenue shall have agreement
the power to divide the
Philippines into zones for purposes of prescribing real property values: zonal vaue---TRUE
a. True, True c. False, True
b. True, False d. False, False
89. The following powers of the Commissioner are not delegable except:
a. The power to recommend the promulgation of rules and regulations by the secretary of
finance.
b. The power to issue ruling of first impression or to reverse, revoke or modify any existing
ruling of the bureau. FIRST IMPRESSION--NONE DELEGABLE
c. The power to compromise or abate internal revenue taxes save for a few.
d. The power of the commissioner to make assessments.
Mobile : 0927 283 8234
Telephone : (043) 723 8412
KAPAG NATALO KA,

90. Statement No. 1: A party adversely affected by a resolution of a division of the CTA has no
other recourse but to appeal to the Court of Appeals. IT MUST BE CTA en banc
Statement No. 2 a party adversely affected by a resolution of a division of the CTA on a
motion for reconsideration or new trial, may file a petition for review with the CTA en banc.
91. Statement No.1: The CTA may sit en banc or in three divisions each divisions consisting of 3
--true
justices.
Statement No.2: The Court of Tax appeals, now treated as having the same level as the court
of Appeals, shall be composed of 1 presiding justice and 8 associate justices.
92. Statement No. 1: The fact that an individual’s name is signed to a filed return shall be
prima facie evidence for all purposes that the return was actually signed by him.
prima facie - rebatable
Statement No. 2: If a taxpayer is unable to make his return, the return may be made by his
guardian or representative, the latter assuming the responsibilities of making the return and
incurring penalties if the same was erroneous.
93. The following are agents and deputies for collection of National Internal Revenue taxes,
except:
a. The commissioner of Customs and his subordinates with respect to the collection of
national Internal Revenue Taxes on imported goods.
b. The head of the appropriate government office and his subordinates with respect to the
collection of energy tax.
c. Banks duly accredited by the commissioner with respect to receipts of payments of
internal revenue taxes authorized to be made thru banks.
d. City treasurer with regard to collection of real estate tax.
94. The chief officials of the BIR shall be composed of:

a. 1 Commissioner and 4 Deputy Commissioners
b. 1 Commissioner and 5 Deputy Commissioners
c. 1 Commissioner, 2 Assistant Commissioners and 2 Deputy Commissioners.
d. 1 Commissioner and 7 Deputy Commissioners.
a. dissemination of news item to the public

95. The Commissioner or his authorized representative is hereby empowered to suspend the
business operations and temporarily close the business establishment of any person for: in vat
a. Failure to issue receipts or invoices of a VAT- registered entity.
b. Failure to file a VAT-return for VAT-registered person as required by the tax code.
c. Understatement of taxable sales or receipts by thirty percent (30%) or more of his correct
taxable sales or receipts for the taxable quarter
d. All of the above.
96. First statement: Failure of any person to register as a VAT-entity shall result to his being
temporarily closed for the duration of not less than five (5) days and shall be lifted only upon
compliance with whatever requirements prescribed by the Commissioner in the closure
order.
Second statement: In the case of sale in the amount of Php1,000 or more where the sale or
transfer is made to a VAT-registered person, the name, business style, if any, address and
Taxpayer Identification Number (TIN) of the customer should be prominently shown in the SI
or OR..
need kailangna ung name and othe details in receipt
Mobile : 0927 283 8234
Telephone : (043) 723 8412
a. True, False c. False; True

b. True, True d. False; False
97. First statement: Taxes imposed and based on weight or volume capacity or any other physical
unit of measurement shall be referred to as ad valorem tax. specific
Second statement: Taxes imposed and based on selling price or other specified value of the
good shall be referred to as specific tax: advalorem
a. True; False c. False; True
b. True; True d. False; False
98. One of the following is not considered taxes, fees and charges deemed to be national internal
revenue taxes:
a. Income taxes c. Business taxes
b. Estate and donor’s taxes d. Documentary stamp taxes
99. A merchant of stock or securities, whether an individual, partnership or corporation, with an

established place of business, regularly engaged in the purchase of securities and the resale
vatable in share ofthereof to customers; and who, as a merchant, buys securities and resells them to customers
shares
with a view to the gains and profits that may be derived therefrom.
a. Dealer in securities c. Underwriters
b. Stock brokers d. Stock merchants
100. The following are secondary purposes of the power of taxation, except:
a.Regulation; b. Reduction of social inequity; c. Encourage economic growth; d.
Protectionism; e. Raise revenue for the Government. e- is primary
a to d is secondary
101. The following are the requisites of a validly imposed tax, except:
a.That the subject matter thereof be within the jurisdiction of the state;
b. That the assessment and collection thereof be subject to the due process guarantee of the
constitution:
c. That the tax must not impinge on the inherent and constitutional limitations on the exercise
of taxation power;
d. it should be generally payable in money.
102. The following are the requisites of a taxpayer’s suit, except: si taxpayer---ang nagrereclamo
A. That public money, earned from taxes, are being spent on any improper purpose;
B. That the petitioner should assume the personality of a taxpayer to gain personality to
file the suit;
C. That the petitioner must be a citizen of the Philippines; no necesarry your a citizen, basta vatable kah
D. That the petitioner seeks to restrain the respondent from wasting public funds.
103. 1st Statement –Ordinarily, Internal revenue taxes shall be assessed within three (3) years
after the last day of filing as prescribed by law or when the return is filed which ever is later.
2nd Statement – Internal revenue taxes shall be administratively collected within five (5) years
following the valid assessment of the tax.
104. The minimum compromise rate for cases other than financial incapacity of the taxpayer is
equivalent to:
a. Ten percent (10%) of the basic assessed tax. compromise agreement
financial incapicity----10%
b. Twenty percent (20%) of the basic assessed tax.
other than-----40%
c. Thirty percent (30%) of the basic assessed tax.
d. Forty percent (40%) of the basic assessed tax.
Mobile : 0927 283 8234
Telephone : (043) 723 8412
105. st Statement – Criminal violation of NIRC may be compromised even those already filed in
court. false
nd
2 Statement – Criminal violation of NIRC may be compromised except those involving fraud. true
106. Remedies of the government for the collection of delinquent taxes shall be by:
a. Levy or/and distraint
b. Civil or criminal action
c. Either of these remedies or both simultaneously.
107. The prescription of check or warrant refund or tax credit shall be within:
a. 4 years from the date of issue
b. 5 years from the date of issue
c. 10 years from the date of issue
d. 12 years from the date of issue
108. First statement – The BIR Commissioner upon the recommendation of the Secretary of
Finance, shall promulgate all needful rules and regulations for the effective enforcement of
the provisions of NIRC. secretary of finance
Second statement – The rules and regulations of the BIR shall contain the conditions to be
observed by revenue officer respecting the institution and conduct of legal actions and
proceedings. truee

109. First Statement: All violations of any provision of the NIRC shall prescribe after five (5) years.
Second statement: Prescription shall begin to run from the day of the commission of the
violation of the law, even if the offender is outside the Philippines. false
110. Which of the following statement is wrong?
a. An assessment which is not protested and appealed to the CTA becomes final and
executory;
b. The proceedings on the protest in the BIR is administrative proceedings;
c. The proceedings in the CTA may be appealed to the CA; also false
d. The proceedings in the CTA are quasi-judicial proceedings. best answer wrong
That in all things God will be glorified

ICARE Preweek Taxation

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No. 125 Brgy.

Preweek Lecture Batch 3

d. Donate his property to his son, mortis causa.

a. Input taxes from non-vat suppliers; false ----eSTIMATE

17. Which of the following is a zero-rated transaction?

19. All of the following are VAT-exempt, which is the exception?

c. Sale or importation of passenger or cargo vessels and aircrafts for domestic or

d. on or before August 15 of the current year.

a. 12% VAT NOT SUBJECT TO EXEMPTION

Choose which of the following statements is correct.

33. Which of the following transactions is exempt from value-added-tax?

34. Which of the following transactions is exempt from value-added-tax?

a) Services rendered by international shipping or air passenger transport operations.exempt

d. 10,000 >>utilities (30,000 x 12% ) = (3,600)

a. 01 January 2021 30% 25%

a. 25% P100 million below P5 million and below

a. 01 July 2020 ---DC & RFC

a. True average, or evenly

47. Statement 1: A one-person corporation is excluded from the definition of a corporation

Statement 2: A one-person corporation is instead regarded under the CREATE Act as an

b. P 250,000 =Net Income 1M

a. P3 million 10,000,000 x 25%

e. None of the above

interest expense in borrowing (loan)

I. Foreign-sourced dividends are reinvested in the business operations of a domestic

Condition Condition 2 Condition

Statement 2: The impact of remeasurement of deferred taxes is recognized in profit or loss

e. None of the above

a. True NRFC-basis GROSS INCOME

a. Social Security System (SSS)

68. Everglow Corporation, a domestic corporation, has unappropriated retained earnings in

still subject to IAET until year end

a. True still liable pa rin

may be carried forward Opt---July 1, 2020

a. The taxpayer shifted from non-VAT to VAT-registered status

Statement Statement Statement

80. _______________ refers to any individual, partnership, corporation, Philippine branch of a

a. Domestic market enterprise

a. Dividend shall be recognized as liability.

Statement 1: The nature of the event

87. The following are the powers of the BIR, except:

KAPAG NATALO KA,

94. The chief officials of the BIR shall be composed of:

a. dissemination of news item to the public

a. True, False c. False; True

99. A merchant of stock or securities, whether an individual, partnership or corporation, with an

a. True; False c. False; True

110. Which of the following statement is wrong?

That in all things God will be glorified

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