EASY

1. Which of the following taxes is NOT a national tax?

a. Sugar adjustment tax; c. Real estate tax;
b. Science fund tax; d. Private motor vehicle tax.

2. For income tax purposes, any person, natural or juridical, that holds in trust an estate of another person is called:
a. Trustor; c. Fiduciary;
b. Provider; d. Beneficiary.

3. One of the following is not an intangible personal property situated in the Philippines:
a. Shares, obligations or bonds issued by any corporation or sociedad anonima organized or constituted in the
Philippines in accordance with its laws;
b. Shares, obligations or bonds issued by any foreign corporation 85% of the business of which is located in the
Philippines;
c. Shares, obligations or bonds issued by any foreign corporation if such shares, obligations or bonds have acquired
business situs in the Philippines;
d. Shares, obligations or bonds issued by a non-resident foreign corporation.

4. An excise tax upon the privilege, opportunity or facility offered at exchanges for transactions of the business is:

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a. an ad valorem tax; c. a documentary stamp tax;

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b. a specific tax; d. a donor’s tax.

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5. Properties acquired by gratuitous title during the marriage are generally classified as:

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I – Conjugal properties under conjugal partnership of gains;
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II – Community properties under absolute community of properties.
a. Only I is correct; c. Both I and II are correct;
b. Only II is correct; d. Both I and II are incorrect.
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6. Mr. J. Cruz transferred P200,000 mortis causa to a religious organization. During the year, the total expenses of the
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religious organization was P5,000,000, 30% of which was for administration. How much of the transferred amount
would be exempt for estate tax purposes?
a. Zero; c. P100,000;
b. P10,000; d. P200,000.
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7. The term applied to the person whose property is transmitted through succession through a will.
a. Estate; c. Testator;
b. Donor; d. Trustor.
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8. Which is correct?
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I – The person to whom a gift of real property is given by virtue of a will is called a devisee;
II – The person to whom a gift of personal property is given by virtue of a will is called a legatee.
a. Both I and II are correct; c. Only I is correct;
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b. Both I and II are incorrect; d. Only II is correct.

9. Under the TRAIN Law, the fringe benefit tax (FBT) rate is now at what percent?
a. 32% b. 33% c. 34% d. 35%

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 10. A BMBE is a business entity engaged in the production, processing or manufacturing of products or commodities,
including agro-processing, trading and services, whose total assets including those arising from loans but exclusive of
the land on which the particular business entity’s office, plant and equipment are situated, .

a. Do not exceed 4,000,000

b. Do not exceed 3,000,000
c. Do not exceed 5,000,000
d. Do not exceed 1,000,000

AVERAGE
1. First statement: A donation on which the donor’s tax is not paid is a valid donation.
Second statement: Title to a tax-exempt donation of real property cannot be transferred to the donee in the Register
of Deeds unless the donor’s tax on the donation had been paid.
a. True, True; c. True, False;
b. False, False; d. False, True.

2. The donation of personal (movable) property may be made:

I – orally if the value is P5,000 or less requiring simultaneous delivery;
II – in writing if the value is more than P5,000.
a. Both I and II correct; c. Only I is correct;

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b. Both I and II are incorrect; d. Only II is correct.

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3. First statement: An importation of goods by a non-profit charitable organization shall not be subject to the value-
added tax.

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Second statement: In the case of importation, the importer is not the one liable for the VAT but the person who shall
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buy the imported goods.
a. Both statements are correct; c. Only the first statement is correct;
b. Both statements are incorrect; d. Only the second statement is correct.
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4. First statement: A zero-rated sale of goods or properties by a VAT-registered person is not a taxable transaction for
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VAT purposes.
Second statement: The input tax on purchases of goods, properties or services, related to zero-rated sale, shall be
available not as tax credit only but as tax refund also.
a. Both statements are correct; c. Only the first statement is correct;
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b. Both statements are incorrect; d. Only the second statement is correct.

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5. A telephone company, VAT-registered, provides services for domestic and overseas calls. It is a taxpayer as far as
what business tax is concerned?
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a. Value-added tax;
b. Overseas communications tax;
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c. Value-added tax on domestic calls and overseas communications tax on overseas calls;
d. Franchise tax.
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6. In the value-added tax on sale of services, the output tax is computed:

a. on billings of the month;
b. on collections of the month on all billings made;
c. on the contract price of contracts completed during the taxable period;
d. only and strictly on labor performed under the contract for services.

7. Which of the following percentage taxes are not paid on a quarterly basis.
I – Overseas communications tax; III - Tax on winnings;
II - Amusement tax; IV – Stock transactions tax.
a. I, II, III and IV; c. I and II;
b. I, II and III; d. III and IV.
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 8. An irrevocable trust was created whereby Mr. Samuel San Jose transferred his commercial apartment to the
Philippine Trust Company as trustee. The trust instrument designated Mrs. Josefa San Jose as the beneficiary to the
rentals for life and appointed their only son to the remainder. Which of the following statements best describes the
taxability of the trust?
a. The transfer by Mr. San Jose is subject to donor’s tax while the rentals accruing to Mrs. San Jose is exempt
from income tax as property acquired by gift;
b. The transfer by Mr. San Jose is subject to donor’s tax while the rentals accruing to Mrs. San Jose is subject to
income tax;
c. The transfer by Mr. San Jose is not subject to donor’s tax but the rentals accruing to Mrs. San Jose is subject
to donor’s tax being the nature of usufruct;
d. The transfer of the apartment to the trustee is subject to estate tax upon the death of Mr. San Jose.

9. Which of the following government-owned or controlled corporations shall be subject to the corporate income tax?
I - Philippine Amusement and Gaming Corporation (PAGCOR);
II - National Development Corporation (NDC);
III - Philippine Charity Sweepstakes Office (PCSO);
IV - Social Security System (SSS).
a. All of the above; c. I and II only
b. II only; d. None of the above.

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10. One of the following is a taxable income.

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a. Income from a qualified pension plan;
b. Compensation for personal injuries;

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c. Stock dividend received;
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d. Gift given by an employer to an employee for services rendered.

DIFFICULT
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1. Which of the following statements is correct?

a. Provinces, cities and municipalities must have uniform taxes between and amongthemselves
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b. The local taxes of political subdivisions need not be uniform with local taxes of another political subdivisions
c. Business that are subject to national taxes are exempted from local business taxes
d. Local business taxes may be credited against national business taxes
ed d

2. Fixing the tax rate to be imposed is best described as a (an):

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a. Tax administration aspect

b. Tax legislative function
c. Aspect of taxation which could be delegated
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d. Function that could be exercised by the executive branch

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3. Under the global system of income taxation:

a. there is no need for classification of income as all taxpayers are subject to a single rate;
b. there are different categories of taxable income;
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c. there are different tax rates;

d. individuals are subject to different tax treatments.

4. A Filipino citizen receives dividends from the US on his capital investments in that foreign country. The dividend
being remitted to him is taxed in the US and at the same time is also being taxed in the Philippines.
I – The above is double taxation which is constitutionally anathematized;
II – The taxpayer has to absorb the impact of the tax which is imposed twice on the same income.
a. Only I is correct; c. Neither I nor II is correct;
b. Only II is correct; d. Both I and II are correct.

5. Which among the following is not a characteristic of tax laws?

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a. They are part of political law;
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 b. They are civil in character;
c. They are not part of criminal law;
d. They are special law.

6. One of the following statements is not an accepted rule in interpretation of tax laws.
a. Tax laws are to be interpreted strictly against the taxpayer and liberally in favor of the government;
b. There is no need to apply the rules on statutory construction of tax laws if the law isclear;
c. Tax exemption laws are to be construed strictly against the taxpayer and liberally in favor the state;
d. As to the property of the State, exemption is the rule and taxation is the exemption.

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ed d
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 7. An income tax is a tax:
a. collected from the proprietor, lessee or operator of duly designated places or activities for pleasurable diversion or
entertainment;
b. imposed on a fixed ratio between the gross sales or receipts and the burden imposed upon the taxpayer;
c. which is imposed only on the increase in the worth, merit or importance of goods, properties or services, and not
on the total value of the goods of services sold or rendered;
d. on the yearly profits arising from employment, property, professions, trades and offices.

8. POGI Sari-sari Store, organized under Philippine laws, has the following data in its financial statements:
Cash P 1,000,000
Accounts receivable 300,000
Loans Receivable 200,000
Building, net 500,000
Equipment, net 400,000
Goodwill 600,000
Land 4,000,000
Accounts Payable 2,000,000
Loans Payable 1,000,000
POGI, capital 4,000,000

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Is POGI qualifies as BMBE under the law?

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A. Yes

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B. No
C. The information provided is insufficient

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D. It depends
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9. In lieu of ITR, BMBE files Annual Information Return. For self-employed individuals, use . For corporations
and partnerships, as well as cooperatives, use .
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a. BIR Form 1702-AIF; BIR Form 1703-AIF

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b. BIR Form 1702-AIF; BIR Form 1701-AIF

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c. BIR Form 1701-AIF; BIR Form 1702-AIF

d. BIR Form 1701-AIF; BIR Form 1703-AIF

10. POGI Corporation, non-VAT registered, provides 25% discount to senior citizen. It recorded the following
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receipts during the year:

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Customers
Regular Senior Citizen Total
Net Receipts P4,000,0000 P750,000 P4,750,000
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Cost of Services 2,800,000

Other deductible expenses 1,200,000
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Under the train law, how much is the taxable gross income?
a. 5,000,000
b. 2,800,000
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c. 2,200,000
d. None of the above

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 CLINCHER
1. A type of income tax consisting of a series of separate quasi-personal taxes, assessed on the particular source of
income with a superimposed personal tax on the income as a whole is:
a. unitary income tax; c. composite income tax;
b. presumptive income tax; d. progressive income tax.

2. That there should be no improper delegation of the legislative authority to tax is:
a. a principle of a sound tax system;
b. a constitutional limitation on the power of taxation;
c. an inherent limitation on the power of taxation;
d. both a constitutional and an inherent limitation on the power of taxation.

3. A law was passed by Congress which granted tax amnesty to those who have not paid income taxes for a certain
year without at the same time providing for the refund of taxes to those who have already paid them. The law is:
a. valid because there is a valid classification;
b. not valid because those who did not pay their taxes are favored over those who have paid their taxes;
c. valid because it was Congress that passed the law and it did not improperly delegate the power totax;
d. not valid because only the President with the approval of Congress may grant amnesty.

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4. Which among the following statements is not correct?
a. The Bureau of Internal Revenue is part of the administrative machinery for the assessment and collection of internal

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revenue taxes;
b. The Bureau of Customs is also charged with the collection of internal revenue taxes;

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c. The local government units, such as the municipalities, cities and provinces, form part of the national tax system;
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d. Private banks may be authorized to collect internal revenue taxes.
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5. The national tax system includes:
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a. a private employer constituted as a withholding tax agent;

b. a municipality, a city or a province;
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c. the employer of a non-resident alien who does not earn income from within the Philippines;
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d. a foreign government who employs Filipino citizens within the territory of their country.
ed d
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 ANSWER KEY:
EASY
1. C
2. C
3. D
4. C
5. D
6. A
7. C
8. A
9. D
10. B

AVERAGE
1. C
2. A
3. B
4. D
5. A

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6. B

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7. D

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8. B
9. C

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10. D
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DIFFICULT
1. B
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2. B
3. A
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4. C
5. A
6. A
7. D
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8. A
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9. C
10. C
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CLINCHER
1. C
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2. D
3. A
4. C
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5. A

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