Professional Documents
Culture Documents
TRUE OR FALSE:
For items 61 through 90: when the law that authorizes the revenue regulation
does not impose a penalty. F
Shade A if statement 1 is true and statement 2 is false. 72. I. A tax imposed by a law can be changed on its
Shade B if statement 1 is false and statement 2 is true. applicability to persons, properties, etc., only by an
Shade C if both statements are true. amendment of the particular law that imposed it. F
Shade D if both statements are false. II. The applicability of a tax imposed by a law on
certain person, properties, etc., may be changed by
61. I. The power of taxation is inherent is sovereignty another or new law that makes reference to the
being essential to the existence of every original law that imposed the tax. T
government. Hence, even if not mentioned in the 73. I. Gross compensation income is income arising out
Constitution, the state can still exercise the power. T of employer-employee relationship. T
II. It is essentially a legislative function. Even in the II. Gross income from self-employment is income
absence of any constitutional provision, taxation arising out of business or the practice of profession.
power falls to Congress as part of the general power T
of lawmaking. T 74. I. Damages recovered for physical injuries are not
62. I. The value-added tax is a property tax. F taxable. T
II. The estate tax is a direct tax. T II. Damages recovered for violation of copyright are
63. I. An ordinance imposing a tax on the manufacture of not taxable. F
softdrinks and another tax on the sale of softdrinks 75. I. Income derived from illegal sources, such as
constitute double taxation. F gambling, extortion, theft, bribes, embezzlement,
II. A criminal case for tax evasion may be filed against and smuggling are not taxable. F
a taxpayer even without prior assessment issued by II. Holiday pay and hazard pay are exempt from
the Commissioner of Internal Revenue. F income tax. F
64. I. A BIR Ruling issued by a Commissioner of Internal 76. I. Tips and gratuities paid directly to an employee by
Revenue which grants tax exemption would create a customers of the employer which are not accounted
perpetual exemption in favor of the taxpayer. F for by the employee to the employer are subject to
II. A tax exemption may be withdrawn anytime at the withholding tax. F
pleasure of the taxing authority. T II. Source of income is either within the Philippines,
65. I. As a rule, taxes are subject to set-off or without the Philippines, or partly within and partly
compensation. F without the Philippines. T
II. The point on which a tax is originally imposed is 77. I. A tax that is allowed by law to be passed on by a
impact of taxation. T taxpayer to another is called an indirect tax. T
66. I. In case of conflict between a revenue regulation II. Business taxes which are not allowed by law to be
and the provisions of the National Internal Revenue passed on by sellers of goods and services to buyers
Code, the latter shall prevail. T are nonetheless imperceptibly passed on because
II. The revocation of a revenue regulation cannot be they are factored in on the selling price. T
made retroactive even if the reason for its 78. i. In addition to rent, other consideration which the
revocation is that it is erroneous or contrary to law. F lessee may pay third parties such as interest, taxes,
67. I. Laundry allowance not exceeding P300 per month dividends, and insurance premiums are taxable to
is not an exempt de minimis benefit if given to rank- the lessee. F
and-file employees. F II. Income of any kind, to the extent required by any
II. Rice subsidy of P1,500 per month is an exempt de treaty obligation binding upon the Government of
minimis benefit regardless of whether the recipient the Philippines, is exempt from income tax. T
employee is occupying a managerial position or not. 79. I. Prizes and awards received in recognition of
T religious, charitable, scientific, educational, artistic,
68. I. Direct double taxation involves two taxes by the literary, or civic achievement are not taxable if the
same taxing authority. T recipient was either selected without any action on
II. Indirect double taxation involves two taxes by his part to enter the contests or proceedings or the
different taxing authorities. T recipient is not required to render substantial future
69. I. Direct double taxation is prohibited by the services as a condition to receiving the prize or
Philippine Constitution. F award. F
II. Indirect double taxation is allowed by the II. if services are paid for in a medium other than
Philippine Constitution. T money, it is not to be included as compensation. F
70. I. Tax evasion, which is the use of means to escape a 80. I. The tax benefit rule states that recovery of
tax that is already a liability, is prohibited by law, and accounts previously written off constitutes a receipt
is punishable. T of a taxable income if in the year of recognition of its
II. Tax avoidance, which is the use of means to being worthless, the write-off resulted in reduction
prevent an accrual of a tax, or to minimize a tax that of taxable income. T
may accrue, is likewise prohibited by law and is II. A non-taxable stock dividend does not constitute
punishable. F income if the new certificates plus the old ones
71. I. A revenue regulation may be contrary to the change the proportionate interest of the stockholder
provision of the law that it implements. F in the net assets of that corporation. F
II. A revenue regulation can expand the provision of 81. I. A progressive system of taxation means a tax
the law that it implements by imposing a penalty structure where the tax base increases as the tax
rate increases. F
II. Tax exemption is a grant of immunity to a She claimed for the monetized value of her unused
particular taxpayer from tax where others are leave credits for 8 days. Her daily basic salary is
obliged to pay. T P300.
82. I. There can only be a tax if there is a law imposing
the tax. T How much is to be considered as compensation income?
II. The power to tax is inherent. T _____________
83. I. A person may refuse to pay a tax on the ground 97-99. Joselito Dimagiba won the International Billiard
that he receives no personal benefit from it. F Championship held in Hanoi, Vietnam. The tournament was
II. One of the essential characteristics of a tax is it is sanctioned by a national sports association which is
unlimited in amount. F recognized by the Philippine Olympic Committee. He was
84. I. A tax is based on law while a debt is based on awarded US$60,000 by the sponsor of the tournament. He
contract. T was also given P250,000 cash by San Miguel Corporation as
II. A tax is also a customs duty. F prize or award.
85. I. Provisions in the Philippines Constitution on
taxation are grants of power. F In the same year, he entered into a contract with the same
II. Territoriality is one of the constitutional company to advertise their product for P1,500,000.
limitations on the power of taxation. F
If the exchange rate of every US$1 is P45, Joselito Dimagiba
86. I. Courts can review or inquire into the wisdom or
should report an income of: ___________.
advisability of a tax law. F
II. Our Constitution does not contain any provision For items 100 through 108:
granting tax exemption to the government. T
87. I. Our Tax Code prevails over the Civil Code. T Dora leased a land to Doro for a period of 11 years starting
II. Tax regulations promulgated by the Secretary of January 1, 2015 at annual rental of P12,000. Observing the
Finance need not be published in a newspaper of provisions of the contract, Doro constructed a building which
general circulation. F shall become the property of Dora at the expiration of the
88. I. In every case of doubt, tax statutes are construed lease. The construction was completed on January 1, 2018 at
strictly against the Government and liberally in favor a cost of P1,000,000 with an estimated useful life of 20 years.
of the taxpayer. T It is also stipulated in the contract that the lessee will pay to
II. Where the intent to tax is clear and the taxpayer the government the P1,500 annual real property tax on the
claims that he is exempt from the tax obligation; the land starting in 2015.
tax shall be construed against the taxpayer and in
favor of the Government because the power of 100-102. How much income is to be reported by Dora in 2018
taxation is necessary to the existence of such under the outright method? _________
Government. T
103-105. How much income is to be reported by Dora in 2018
89. I. Because the power of taxation is inherent in state,
under the spread-out method? ______
the inherent limitations on the power of taxation
always apply. F 106-108. Assuming that due to the fault of the lessee, the
II. Inherent limitations on the power of taxation must lease contract was terminated on January 1, 2020, how much
give way to constitutional limitations. T income is to be reported by the lessor in 2020?
90. I. Uniforms and clothing allowance not exceeding _________________
five thousand pesos per annum is an exempt de
minimis benefit. T 109-111. After working for 30 years and due to old age,
II. Actual medical benefits not exceeding P10,000 per Brutus retired from his employment on December 31, 2011 as
annum is an exempt de minimis benefit. T a rank-and-file employee of Toma Corporation. As a
consequence of his retirement, he received the following
SHORT PROBLEMS: (ON A SEPARATE SHEET OF YELLOW from his employer:
PAPER, ANSWER THE FOLLOWING PROBLEMS. NO
SUPPORTING SOLUTIONS, NO POINTS.) Salary for 2011 P250,000
Christmas gift 25,000
91-93. Mr. Ador Able was insured under an endowment Anniversary bonus 2,500
policy with a value of P1,000,000. Total premium paid by him Loyalty award 10,000
during the term of premium payments on the policy was Retirement pay 750,000
P980,000, from which there was a return of premiums of
P80,000. At the maturity of the policy in 2016, Mr. Able
Based on the above data, the amount subject to tax of Brutus
received P1,000,000. The income of Mr. Able under the policy
is: ______________.
is: _______________.
112-114. Authorized capital stock of a domestic corporation:
94-96. Dina Gaganda, an employee, has the following details
common and preferred.
relative to her employment in 2016:
Capital stock issued and outstanding at the time of dividend –
She consulted the company physician due to
common only;
headache. Had she consulted another physician, she
would have been charged P300 as consultation fee. 50% stock dividend in the form of preferred shares, with a fair
She received cash from a customer for her efficient market value of P60 per share;
service, P5,000. She failed to account for it to her
employer.
Stock owned at the time of dividend: 100 common shares,
with an acquisition cost of P210 per share and a fair market
value at the time of the dividend of P180 per share;
END OF EXAMINATION
Prepared by:
Approved by: