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Bar Examination Questionnaire for Taxation

Set A
1. A municipality may levy an annual ad valorem tax on real property such as
land, building, machinery, and other improvement only if
A. the real property is ithin the !etropolitan !anila Area.
2. the real property is located in the municipality.
3. the "#$% authori&es it to do so.
4. the poer is delegated to it by the province.
'. Anne $apada, a student activist, ants to impugn the validity of a tax on text
messages. Aside from claiming that the la adversely affects her since she
sends messages by text, hat may she allege that ould strengthen her claim
to the right to file a taxpayer(s suit)
A. That she is entitled to the return of the taxes collected from her in case the
court nullifies the tax measure.
B. That tax money is being extracted and spent in violation of the
constitutionally guaranteed right to freedom of communication.
3. That she is filing the case in behalf of a substantial number of taxpayers.
4. That text messages are an important part of the lives of the people she
represents.
*. There is no taxable income until such income is recogni&ed. Taxable income
is recogni&ed hen the
A. taxpayer fails to include the income in his income tax return.
B. income has been actually received in money or its e+uivalent.
,. income has been received, either actually or constructively.
". transaction that is the source of the income is consummated.
-. .eyrand, #nc., a /hilippine corporation, sold through the local stoc0 exchange
11,111 /$"T shares that it bought ' years ago. .eyrand sold the shares for /'
million and reali&ed a net gain of /'11,111.11. 2o shall it pay tax on the
transaction)
1. #t shall declare a /' million gross income in its income tax return, deducting
its cost of ac+uisition as an expense.
2. #t shall report the /'11,111.11 in its corporate income tax return ad3usted
by the holding period.
3. #t shall pay 45 tax on the first /111,111.11 of the /'11,111.11 and 115
tax on the remaining /111,111.11.
4. #t shall pay a tax of one6half of 15 of the /' million gross sales.
4. Amaretto, #nc., imported 111 cases of !arula ine from South Africa. The
shipment as assessed duties and value6added taxes of /*11,111 hich
Amaretto, #nc. immediately paid. The Bureau of ,ustoms did not, hoever, issue
the release papers of the shipment yet since the 7ood and "rug Administration
87"A9 needed to test the suitability of the ine for human consumption. #s the
Bureau of ,ustoms at fault for refusing to release the shipment 3ust as yet)
1. :es, because the importation as already terminated as a result of
the payment of the taxes due.
2. :es, the Bureau of ,ustoms is estopped from holding the release of the
shipment after receiving the payment.
Bar Examination Questionnaire for Taxation
Set A
,. ;o, if the amount paid as duties and value6added taxes due on the importation
as insufficient.
". ;o, because the Bureau of ,ustoms has not yer issued the legal permit
for ithdraal pending the 7"A<s findings.
=. >hich theory in taxation states that ithout taxes, a government ould be
paraly&ed for lac0 of poer to activate and operate it, resulting in its destruction)
A. /oer to destroy theory
B. $ifeblood theory
3. Sumptuary theory
4. Symbiotic doctrine
?. The spouses 2elena and 7ederico anted to donate a parcel of land to their
son "ondon ho is getting married in "ecember, '111. The parcel of land has a
&onal valuation of /-'1,111.11. >hat is the most efficient mode of donating the
property)
1. The spouses should first donate in '111 a portion of the property valued at
/'1,111.11 then spread the /-11,111.11 e+ually for '11', '11*, '11- and '114.
2. Spread the donation over a period of 4 years by the spouses donating
/111,111.11 each year from '111 to '114.
3. The spouses should each donate a /111,111.11 portion of the value of
the property in '111 then each should donate /111,111.11 in '11'.
4. The spouses should each donate a /111,111.11 portion of the value of the
property in '111, and another /111,111.11 each in '11'. Then, in '11*, 2elena
should donate the remaining /'1,111.11.
@. !ia, a compensation income earner, filed her income tax return for the
taxable year '11? on !arch *1, '11@. An !ay '1, '111, !ia received an
assessment notice and letter of demand covering the taxable year '11? but the
postmar0 on the envelope shos April 11, '111. 2er return is not a false and
fraudulent return. ,an !ia raise the defense of prescription)
A. ;o. The * year prescriptive period started to run on April 14, '11@, hence, it
has not yet expired on April 11, '111.
2. :es. The * year prescriptive period started to run on April 14, '11@, hence, it
had already expired by !ay '1, '111.
3. ;o. The prescriptive period started to run on !arch *1, '11@, hence, the
* year period expired on April 11, '111.
4. :es. Since the *6year prescriptive period started to run on !arch *1, '11@, it
already expired by !ay '1, '111.
B. "ouble taxation in its general sense means taxing the same sub3ect tice
during the same taxing period. #n this sense, double taxation
1. violates substantive due process.
2. does not violate substantive due process.
3. violates the right to e+ual protection.
4. does not violate the right to e+ual protection.
11. The payor of passive income sub3ect to final tax is re+uired to ithhold the
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Set A
tax from the payment due the recipient. The ithholding of the tax has the effect
of
A. a final settlement of the tax liability on the income.
2. a credit from the recipient<s income tax liability.
3. consummating the transaction resulting in an income.
4. a deduction in the recipient<s income tax return.
11. %uidant Cesources ,orporation, a corporation registered in ;oray, has a 41
!> electric poer plant in San Dose, Batangas. Aside from %uidant<s income
from its poer plant, hich among the folloing is considered as part of its
income from sources ithin the /hilippines)
A. %ains from the sale to an #locos ;orte poer plant of generators bought from
the Enited States.
2. #nterests earned on its dollar deposits in a /hilippine ban0 under the
Expanded 7oreign ,urrency "eposit System.
3. "ividends from a to6year old ;oregian subsidiary ith operations in
Fambia but derives =15 of its gross income from the /hilippines.
4. Coyalties from the use in Bra&il of generator sets designed in the
/hilippines by its engineers.
1'. Tong Sio0, a ,hinese billionaire and a ,anadian resident, died and left assets
in ,hina valued at /@1 billion and in the /hilippines assets valued at /'1 billion.
7or /hilippine estate tax purposes the alloable deductions for expenses,
losses, indebtedness, and taxes, property previously taxed, transfers for public
use, and the share of his surviving spouse in their con3ugal partnership amounted
to /14 billion. Tong<s gross estate for /hilippine estate tax purposes is
A. /'1 billion.
2. /4 billion.
3. /111 billion.
4. /@4 billion.
1*. An0tryd, #nc., bought a parcel of land in '11B for /? million as part of its
inventory of real properties. #n '111, it sold the land for /1' million hich as its
&onal valuation. #n the same year, it incurred a loss of /= million for selling
another parcel of land in its inventory. These ere the only transactions it had in
its real estate business. >hich of the folloing is the applicable tax treatment)
A. An0tryd shall be sub3ect to a tax of =5 of /1' million.
B. An0tryd could deduct its /= million loss from its /4 million gain.
3. An0tryd<s gain of /4 million shall be sub3ect to the holding period.
4. An0tryd<s /= million loss could not be deducted from its /4 million gain.
1-. Aplets ,orporation is registered under the las of the Girgin #slands. #t has
extensive operations in Southeast Asia. #n the /hilippines, #ts products are
imported and sold at a mar06up by its exclusive distributor, .im<s Trading, #nc.
The B#C compiled a record of all the imports of .im from Aplets and imposed a
tax on Aplets net income derived from its exports to .im. #s the B#C correct)
A. :es. Aplets is a non6resident foreign corporation engaged in trade or business
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Set A
in the /hilippines.
B. ;o. The tax should have been computed on the basis of gross revenues and
not net income.
,. ;o. Aplets is a non6resident foreign corporation not engaged in trade or
business in the /hilippines.
". :es. Aplets is doing business in the /hilippines through its exclusive distributor
.im<s Trading. #nc.
14. #n '11B, Sprat&, #nc.(s net profit before tax as /*4 million hile its operating
expenses as /*1 million. #n '111, its net profit before tax as /-1 million and
its operating expenses as /*@ million. #t did not declare dividends for '11B and
'111. And it has no proposed capital expenditures for '111 and the immediate
future. !ay Sprat& be sub3ect to the improperly accumulated tax on its retained
profits for '11B and '111)
A. :es, since the accumulated amounts are reasonable for operations in relation
to hat it usually needed annually.
B. :es, since the accumulation is not reasonably necessary for the immediate
needs of the business.
3. ;o, because there is no shoing that the taxpayer<s '11B and '111 net profit
before tax exceeded its paid6up capital.
4. ;o, because the taxpayer is not shon to be a publicly6listed corporation,
a ban0, or an insurance company.
1=. The actual effort exerted by the government to effect the exaction of hat
is due from the taxpayer is 0non as
1. assessment.
2. levy.
3. payment.
4. collection.
1?. Although the poer of taxation is basically legislative in character, it is ;AT
the function of ,ongress to
A. fix ith certainty the amount of taxes.
B. collect the tax levied under the la.
3. identify ho should collect the tax.
4. determine ho should be sub3ect to the tax.
1@. /assive income includes income derived from an activity in hich the earner
does not have any substantial participation. This type of income is
A. usually sub3ect to a final tax.
2. exempt from income taxation.
3. taxable only if earned by a citi&en.
4. included in the income tax return.
1B. #n '111, Duliet Elbod earned /411,111.11 as income from her beauty parlor
and received /'41,111.11 as ,hristmas gift from her spinster aunt. She had no
other receipts for the year. She spent /141,111.11 for the operation of her
beauty parlor. 7or tax purposes, her gross income for '111 is
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Bar Examination Questionnaire for Taxation
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A. /?41,111.11.
B. /411,111.11.
,. /*41,111.11.
". /=11,111.11.
'1. Exempted from donor(s taxation are gifts made
A. for the use of the barangay.
2. in consideration of marriage.
3. to a school hich is a stoc0 corporation.
4. to a for6profit government corporation.
'1. 7ederico, a 7ilipino citi&en, migrated to the Enited States some six years ago
and got a permanent resident status or green card. 2e should pay his /hilippine
income taxes on
1. the gains derived from the sale in ,alifornia, E.S.A. of 3eelry he purchased in
the /hilippines.
2. the proceeds he received from a /hilippine insurance company as the sole
beneficiary of life insurance ta0en by his father ho died recently.
3. the gains derived from the sale in the ;e :or0 Stoc0 Exchange of shares
of stoc0 in /$"T, a /hilippine corporation.
4. dividends received from a to year old foreign corporation hose
gross income as derived solely from /hilippine sources.
''. An example of a tax here the concept of progressivity finds application
is the
A. income tax on individuals.
2. excise tax on petroleum products.
3. value6added tax on certain articles.
4. amusement tax on boxing exhibitions.
'*. A corporation may change its taxable year to calendar or fiscal year in filing
its annual income tax return, provided
A. it see0s prior B#C approval of its proposed change in accounting period.
2. it simultaneously see0s B#C approval of its ne accounting period.
3. it should change its accounting period to years prior to changing its taxable
year.
4. its constitution and by6las authori&es the change.
'-. >hat is the rule on the taxability of income that a government
educational institution derives from its school operations) Such income is
A. sub3ect to 115 tax on its net taxable income as if it is a proprietary educational
institution.
B. Exempt from income taxation if it is actually, directly, and exclusively used
for educational purposes.
,. sub3ect to the ordinary income tax rates ith respect to incomes derived
from educational activities.
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Bar Examination Questionnaire for Taxation
Set A
". Exempt from income taxation in the same manner as government6oned and
controlled corporations.
'4. >hich among the folloing reduces the gross estate 8not the net estate9 of a
citi&en of the /hilippines for purposes of estate taxation)
1. Transfers for public use
2. /roperty previously taxed
3. Standard deduction of /1 million
4. ,apital of the surviving spouse
'=. .a /edring !atibag, a sole proprietor, buys and sells H0umot at 0ulamboI
both of hich are sub3ect to value6added tax. Since he is using the calendar year
as his taxable year, his taxable +uarters end on the last day of !arch, Dune,
September, and "ecember. >hen should .a /edring file the GAT +uarterly return
for his gross sales or receipts for the period of Dune 1 to September *1)
A. >ithin '4 days from September *1
2. >ithin -4 days from September *1
3. >ithin 14 days from September *1
4. >ithin *1 days from September *1
'?. #n Danuary '111, the B#C issued a ruling that ,lemen<s vod0a imports ere
not sub3ect to increased excise tax based on his claim that his net retail price as
only /'11 per ?41 milliliter bottle. This ruling as applied to his imports for !ay,
Dune, and Duly '111. #n September '111, the B#C revo0ed its ruling and
assessed him for deficiency taxes respecting his !ay, Dune and Duly '111 vod0a
imports because it discovered that his net retail price for the vod0a as /'41 per
bottle from Danuary to September '111. "oes the retroactive application of the
revocation violate ,lemen<s right to due process as a taxpayer)
A. :es, since the presumption is that the B#C ascertained the facts before it made
its ruling.
B. ;o, because he acted in bad faith hen he claimed a loer net retail price
than hat he actually used.
3. ;o, since he could avail of remedies available for disputing the assessment.
4. :es, since he had already ac+uired a vested right in the favorable B#C ruling.
'@. "on 7ortunato, a idoer, died in !ay, '111. #n his ill, he left his estate of
/111 million to his four children. 2e named his compadre, "on Epitacio, to be
the administrator of the estate. >hen the B#C sent a demand letter to "on
Epitacio for the payment of the estate tax, he refused to pay claiming that he
did not benefit from the estate, he not being an heir. 7orthith, he resigned as
administrator. As a result of the resignation, ho may be held liable for the
payment of the estate tax)
1. "on Epitacio since the tax became due prior to his resignation.
2. The eldest child ho ould be reimbursed by the others.
,. All the four children, the tax to be divided e+ually among
them. ". The person designated by the ill as the one liable.
'B. An Duly *1, '111, Esperan&a received a preliminary assessment notice from
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the B#C demanding that she pays /1@1,111.11 deficiency income taxes on her
'11B income. 2o many days from Duly *1, '111 should Esperan&a respond to
the notice)
1. 1@1 days.
2. *1 days.
3. =1 days.
4. 14 days.
*1. The B#C could not avail itself of the remedy of levy and distraint to implement,
through collection, an assessment that has become final, executory, and
demandable here
A. the sub3ect of the assessment is an income tax.
B. the amount of the tax involved does not exceed /111.11.
3. the corporate taxpayer has no other uncollected tax liability.
4. the taxpayer is an individual compensation income earner.
*1. Alain "escartes, a 7rench citi&en permanently residing in the /hilippines,
received several items during the taxable year. >hich among the folloing is
;AT sub3ect to /hilippine income taxation)
A. ,onsultancy fees received for designing a computer program and
installing the same in the Shanghai facility of a ,hinese firm.
2. #nterests from his deposits in a local ban0 of foreign currency earned abroad
converted to /hilippine pesos.
3. "ividends received from an American corporation hich derived =15 of
its annual gross receipts from /hilippine sources for the past ? years.
4. %ains derived from the sale of his condominium unit located in The
7ort, Taguig ,ity to another resident alien.
*'. #ncome is considered reali&ed for tax purposes hen
1. it is recogni&ed as revenue under accounting standards even if the la
does not do so.
2. the taxpayer retires from the business ithout approval from the B#C.
3. the taxpayer has been paid and has received in cash or near cash the
taxable income.
4. the earning process is complete or virtually complete and an exchange has
ta0en place.
**. >hich among the folloing circumstances negates the prima facie
presumption of correctness of a B#C assessment)
A. The B#C assessment as seasonably protested ithin *1 days from receipt. B.
;o preliminary assessment notice as issued prior to the assessment notice.
,. /roof that the assessment is utterly ithout foundation, arbitrary, and
capricious.
". The B#C did not include a formal letter of demand to pay the alleged
deficiency.
*-. An !arch *1, '114 !iguel 7oods, #nc. received a notice of assessment and
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a letter of demand on its April 14, '11' final ad3ustment return from the B#C.
!iguel 7oods then filed a re+uest for reinvestigation together ith the re+uisite
supporting documents on April '4, '114. An Dune ', '114, the B#C issued a final
assessment reducing the amount of the tax demanded. Since !iguel 7oods as
satisfied ith the reduction, it did not do anything anymore. An April 14, '111 the
B#C garnished the corporation<s ban0 deposits to anser for the tax liability. >as
the B#C action proper)
A. :es. The B#C has 4 years from the filing of the protest ithin hich to collect.
B. :es. The B#C has 4 years from the issuance of the final assessment ithin
hich to collect.
3. ;o. The taxpayer did not apply for a compromise.
4. ;o. >ithout the taxpayer(s prior authority, the B#C action violated the Ban0
"eposit Secrecy $a.
*4. >hich among the folloing taxpayers is re+uired to use only the calendar
year for tax purposes)
A. /artnership exclusively for the design of government infrastructure
pro3ects considered as practice of civil engineering.
2. Doint6stoc0 company formed for the purpose of underta0ing
construction pro3ects.
3. Business partnership engaged in energy operations under a service contract
ith the government.
4. Doint account 8cuentas en participacion9 engaged in the trading of mineral
ores.
*=. Spanflex #nt(l #nc. received a notice of assessment from the B#C. #t
seasonably filed a protest ith all the necessary supporting documents but the
B#C failed to act on the protest. Thirty days from the lapse of 1@1 days from the
filing of its protest, Spanflex still has not elevated the matter to the ,TA. >hat
remedy, if any, can Spanflex ta0e)
1. #t may file a motion to admit appeal if it could prove that its failure to
appeal as due to the negligence of counsel.
2. #t may no longer appeal since there is no B#C decision from hich it
could appeal.
3. #t may ait for the final decision of the B#C on his protest and appeal it to the
,TA ithin *1 days from receipt of such decision.
4. ;one. #ts right to appeal to the ,TA has prescribed.
*?. %erardo died on Duly *1, '111. 2is estate tax return should be filed ithin
1. six months from filing of the notice of death.
2. sixty days from the appointment of an administrator.
3. six months from the time he died on Duly *1, '111.
4. sixty days from the time he died on Duly *1, '111.
*@. #ncome from dealings in property 8real, personal, or mixed9 is the gain or
loss derived
A. only from the cash sales of property.
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2. from cash and gratuitous receipts of property.
3. from sale and lease of property.
". only from the sale of property.
*B. #n !arch '11B, Tonette, ho is fond of 3eelries, bought a diamond ring for
/?41,111.11, a bracelet for /'41,111.11, a nec0lace for /411,111.11, and a
brooch for /411,111.11. Tonette derives income from the exercise of her
profession as a licensed ,/A. #n Actober '11B, Tonette sold her diamond ring,
bracelet, and nec0lace for only /1.'4 million incurring a loss of /'41,111.11.
She used the /1.'4 million to buy a solo diamond ring in ;ovember '11B hich
she sold for /1.4 million in September '111. Tonette had no other transaction in
3eelry in '111. >hich among the folloing describes the tax implications
arising from the above transactions)
A. Tonette may deduct his '11B loss only from her '11B professional income.
B. Tonette may carry over and deduct her '11B loss only from her '111 gain.
3. Tonette may carry over and deduct her '11B loss from her '111
professional income as ell as from her gain.
4. Tonette may not deduct her '11B loss from both her '111 professional
income and her gain.
-1. Anion, #nc. received a notice of assessment and a letter from the B#C
demanding the payment of /* million pesos in deficiency income taxes for the
taxable year '11@. The financial statements of the company sho that it has
been suffering financial reverses from the year '11B up to the present. #ts asset
position shos that it could pay only /411,111.11 hich it offered as a
compromise to the B#C. >hich among the folloing may the B#C re+uire to
enable it to enter into a compromise ith Anion, #nc.)
A. Anion must sho it has faithfully paid taxes before '11B.
B. Anion must promise to pay its deficiency hen financially able.
,. Anion must aive its right to the secrecy of its ban0 deposits.
". Anion must immediately deposit the /411,111.11 ith the B#C.
-1. Ceal property oned by the national government is exempt from real property
taxation unless the national government
A. transfers it for the use of a local government unit.
B. leases the real property to a business establishment.
3. gratuitously allos its use for educational purposes by a school established for
profit.
4. sells the property to a government6oned non6profit corporation.
-'. "ondon and 2elena ere legally separated. They had six minor children, all
+ualified to be claimed as additional exemptions for income tax purposes. The
court aarded custody of to of the children to "ondon and three to 2elena,
ith "ondon directed to provide full financial support for them as ell. The court
aarded the =th child to "ondon<s father ith "ondon also providing full financial
support. Assuming that only "ondon is gainfully employed hile 2elena is
not, for ho many children could "ondon claim additional exemptions hen he
files his income tax return)
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A. Six children.
B. 7ive children.
,. Three children.
". To children.
-*. /olitical campaign contributions are ;AT deductible from gross income
A. if they are not reported to the ,ommission on Elections.
B. if the candidate supported ins the election because of possible corruption.
,. since they do not help earn the income from hich they are to be deducted.
". since such amounts are not considered as income of the candidate to hom
given.
--. >hen a B#C decision affirming an assessment is appealed to the ,TA,
the B#C<s poer to garnish the taxpayer<s ban0 deposits
1. is suspended to aait the finality of such decision.
2. is suspended given that the ,TA can reverse B#C decisions hen pre3udicial
to the taxpayer.
3. is not suspended because only final decisions of the B#C are sub3ect to
appeal.
4. is not suspended since the continued existence of government depends
on tax revenues.
-4. Ceal property taxes should not disregard increases in the value of real
property occurring over a long period of time. To do otherise ould violate the
canon of a sound tax system referred to as
A. theoretical 3ustice.
B. fiscal ade+uacy.
3. administrative feasibility.
4. symbiotic relationship.
-=. The poer to tax is the poer to destroy. #s this alays so)
1. ;o. The Executive Branch may decide not to enforce a tax la hich
it believes to be confiscatory.
2. :es. The tax collectors should enforce a tax la even if it results to
the destruction of the property rights of a taxpayer.
3. :es. Tax las should alays be enforced because ithout taxes the very
existence of the State is endangered.
4. ;o. The Supreme ,ourt may nullify a tax la, hence, property rights are not
affected.
-?. Deopardy assessment is a valid ground to compromise a tax liability
A. involving deficiency income taxes only, but not for other
taxes. B. because of doubt as to the validity of the assessment.
3. if the compromise amount does not exceed 115 of the basic tax.
4. only hen there is an approval of the ;ational Evaluation Board.
-@. Fygomite !inerals, #nc., a corporation registered and holding office in
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Australia, not operating in the /hilippines, may be sub3ect to /hilippine income
taxation on
A. gains it derived from sale in Australia of an ore crusher it bought from the
/hilippines ith the proceeds converted to pesos.
B. gains it derived from sale in Australia of shares of stoc0 of /hilex !ining
,orporation, a /hilippine corporation.
3. dividends earned from investment in a foreign corporation that derived -15
of its gross income from /hilippine sources.
4. interests derived from its dollar deposits in a /hilippine ban0 under
the Expanded 7oreign ,urrency "eposit System.
-B. As a general rule, ithin hat period must a taxpayer elevate to the ,ourt of
Tax Appeals a denial of his application for refund of income tax overpayment)
A. >ithin *1 days from receipt of the ,ommissioner(s denial of his application for
refund.
B. >ithin *1 days from receipt of the denial hich must not exceed ' years
from payment of income tax.
3. >ithin ' years from payment of the income taxes sought to be refunded.
4. >ithin *1 days from receipt of the denial or ithin to years from payment.
41. After the province has constructed a barangay road, the Sangguniang
/anglalaigan may impose a special levy upon the lands specifically benefitted
by the road up to an amount not to exceed
A. =15 of the actual cost of the road ithout giving any portion to the barangay.
2. 1115 of the actual pro3ect cost ithout giving any portion to the barangay.
3. 1115 of the actual pro3ect cost, 0eeping =15 for the province and giving -15
to the barangay.
4. =15 of the actual cost, dividing the same beteen the province and
the barangay.
41. ,elia donated /111,111.11 to her friend Gictoria ho as getting married.
,elia gave no other gift during the calendar year. >hat is the donor<s tax
implication on ,elia(s donation)
1. The /111,111.11 portion of the donation is exempt since given
in consideration of marriage.
2. A /11,111.11 portion of the donation is exempt being a donation
in consideration of marriage.
3. ,elia shall pay a *15 donor<s tax on the /111,111.11 donation.
4. The /111,111.11 portion of the donation is exempt under the rate schedule
for donor<s tax.
4'. $evox ,orporation anted to donate /4 million as pri&e money for the orld
professional billiard championship to be held in the /hilippines. Since the Billiard
Sports ,onfederation of the /hilippines does not recogni&e the event, it as held
under the auspices of the #nternational /rofessional Billiards Association, #nc. #s
$evox sub3ect to the donor<s tax on its donation)
A. ;o, so long as the donated money goes directly to the inners and not
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Bar Examination Questionnaire for Taxation
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through the association.
B. :es, since the national sports association for billiards does not sanction
the event.
3. ;o, because it is donated as pri&e for an international competition under the
billiards association.
4. :es, but only that part that exceeds the first /111,111.11 of total $evox
donations for the calendar year.
4*. A violation of the tariff and customs las is the failure to
A. pay the customs duties and taxes and to comply ith the rules on
customs procedures.
B. pay the customs duties and taxes or to comply ith the rules on
customs procedures.
3. pay the customs duties and taxes.
4. comply ith the rules on customs procedures.
4-. >hat is the effect on the tax liability of a taxpayer ho does not protest
an assessment for deficiency taxes)
1. The taxpayer may appeal his liability to the ,TA since the assessment is a
final decision of the ,ommissioner on the matter.
2. The B#C could already enforce the collection of the taxpayer<s liability if it could
secure authority from the ,TA.
3. The taxpayer<s liability becomes fixed and sub3ect to collection as the
assessment becomes final and collectible.
4. The taxpayer<s liability remains suspended for 1@1 days from the expiration
of the period to protest.
44. A non6stoc0, non6profit school alays had cash flo problems, resulting in
failure to recruit ell6trained administrative personnel to effectively manage the
school. #n '111, "on $eon donated /111 million pesos to the school, provided
the money shall be used solely for paying the salaries, ages, and benefits of
administrative personnel. The donation represents less than 115 of "on $eon<s
taxable income for the year. #s he sub3ect to donor<s taxes)
A. ;o, since the donation is actually, directly, and exclusively used for
educational purposes.
B. :es, because the donation is to be holly used for administration purposes.
3. :es, since he did not obtain the re+uisite ;%A certification before he
made the donation.
4. ;o, because the donation does not exceed 115 of his taxable income for
'111.
4=. >hat is the tax base for the imposition by the province of professional taxes)
1. That hich ,ongress determined.
2. The pertinent provision of the local %overnment ,ode.
,. The reasonable classification made by the provincial sanggunian.
". That hich the "ept. of #nterior and $ocal %overnment determined.
4?. There is prima facie evidence of a false or fraudulent return here the
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1. tax return as amended after a notice of assessment as issued.
2. tax return as filed beyond the reglementary period.
3. taxpayer changed his address ithout notifying the B#C.
". deductions claimed exceed by *15 the actual deductions.
4@. The proceeds received under a life insurance endoment contract is ;AT
considered part of gross income
1. if it is so stated in the life insurance endoment policy.
2. if the price for the endoment policy as not fully paid.
,. here payment is made as a result of the death of the insured.
". here the beneficiary as not the one ho too0 out the endoment contract.
4B. The excess of alloable deductions over gross income of the business in a
taxable year is 0non as
A. net operating loss.
B. ordinary loss.
,. net deductible loss.
". ;A$,A.
=1. ;o action shall be ta0en by the B#C on the taxpayer(s disputed issues until
the taxpayer has paid the deficiency taxes
A. hen the assessment as issued against a false and fraudulent return.
B. if there as a failure to pay the deficiency tax ithin =1 days from
B#C demand.
,. if the Cegional Trial ,ourt issues a rit of preliminary in3unction to en3oin
the B#C.
". attributable to the undisputed issues in the assessment notice.
=1. #s an article previously exported from the /hilippines sub3ect to the payment
of customs duties)
1. :es, because all articles that are imported from any foreign country are sub3ect
to duty.
2. ;o, because there is no basis for imposing duties on articles
previously exported from the /hilippines.
3. :es, because exemptions are strictly construed against the importer ho
is the taxpayer.
4. ;o, if it is covered by a certificate of identification and has not been improved
in value.
='. /rior to the enactment of the $ocal %overnment ,ode, consumer<s
cooperatives registered under the ,ooperative "evelopment Act
en3oyed exemption from all taxes imposed by a local government. >ith
the $ocal %overnment ,ode(s ithdraal of exemptions, could these
cooperatives continue to en3oy such exemption)
A. :es, because the $ocal %overnment ,ode, a general la, could not amend a
special la such as the ,ooperative "evelopment Act.
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2. ;o, ,ongress has not by the ma3ority vote of all its members granted
exemption to consumers< cooperatives.
3. ;o, the exemption has been ithdran to level the playing field for all
taxpayers and preserve the $%Es< financial position.
4. :es, their exemption is specifically mentioned among those not ithdran
by the $ocal %overnment ,ode.
=*. Ender the Tariff and ,ustoms ,ode, abandoned imported articles becomes
the property of the
A. government hatever be the circumstances.
2. insurance company that covered the shipment.
3. shipping company in case the freight as not paid.
4. ban0 if the shipment is covered by a letter of credit.
=-. .a Tato ons a parcel of land in San Dose, Batangas declared for real
property taxation, as agricultural. #n 1BB1, he used the land for a poultry feed
processing plant but continued to declare the property as agricultural. #n !arch
'111, the local tax assessor discovered .a Tato(s change of use of his land and
informed the local treasurer ho demanded payment of deficiency real property
taxes from 1BB1 to '111. 2as the action prescribed)
A. ;o, the deficiency taxes may be collected ithin five years from hen they
fell due.
B. ;o. The deficiency taxes for the period 1BB1 up to '111 may still be collected
ithin 11 years from !arch '111.
3. :es. !ore than 11 years had lapsed for the period 1BB1 up to '111, hence
the right to collect the deficiency taxes has prescribed.
4. :es. !ore than 4 years had lapsed for the collection of the deficiency taxes
for the period 1BB1 up to '114.
=4. /ierre de Savigny, a 7renchman, arrived in the /hilippines on Danuary 1,
'111 and continued to live and engage in business in the /hilippines. 2e ent
on a tour of Southeast Asia from August 1 to ;ovember 4, '111. 2e returned to
the /hilippines on ;ovember =, '111 and stayed until April 14, '111 hen he
returned to 7rance. 2e earned during his stay in the /hilippines a gross income
of /* million from his investments in the country. 7or the year '111, /ierre(s
taxable status is that of
A. a non6resident alien not engaged in trade or business in the /hilippines.
B. a non6resident alien engaged in trade or business in the /hilippines.
3. a resident alien not engaged in trade or business in the /hilippines.
4. a resident alien engaged in trade or business in the /hilippines.
==. $ualhati Educational 7oundation, #nc., a stoc0 educational institution
organi&ed for profit, decided to lease for commercial use a 1,411 s+. m. portion of
its school. The school actually, directly, and exclusively used the rents for the
maintenance of its school buildings, including payment of 3anitorial services. #s
the leased portion sub3ect to real property tax)
1. :es, since $ualhati is a stoc0 and for profit educational institution.
2. ;o, since the school actually, directly, and exclusively used the rents for
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Bar Examination Questionnaire for Taxation
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educational purposes.
,. ;o, but it may be sub3ect to income taxation on the rents it receives.
". :es, since the leased portion is not actually, directly, and exclusively used for
educational purposes.
=?. Apparently the la does not provide for the refund of real property taxes
that have been collected as a result of an erroneous or illegal assessment by
the provincial or city assessor. >hat should be done in such instance to avoid
an in3ustice)
1. Question the legality of the no6refund rule before the Supreme ,ourt.
2. Enact a ne ordinance amending the erroneous or illegal assessment to
correct the error.
3. Subse+uent ad3ustment in tax computation and the application of the
excess payment to future real property tax liabilities.
4. /ass a ne ordinance providing for the refund of real property taxes that have
been erroneously or illegally collected.
=@. >hat should the B#C do hen the prescriptive period for the assessment of a
tax deficiency is about to prescribe but the taxpayer has not yet complied ith the
B#C re+uirements for the production of boo0s of accounts and other records to
substantiate the claimed deductions, exemptions or credits)
A. ,all the taxpayer to a conference to explain the delay.
B. #mmediately conduct an investigation of the taxpayer<s activities. ,.
#ssue a 3eopardy assessment coupled ith a letter of demand.
". #ssue a notice of constructive distraint to protect government interest.
=B. !oney collected from taxation shall not be paid to any religious dignitary
EJ,E/T hen
A. the religious dignitary is assigned to the /hilippine Army.
2. it is paid by a local government unit.
3. the payment is passed in audit by the ,AA.
4. it is part of a lama0er(s por0 barrel.
?1. "iscriminatory duties may ;AT be imposed upon articles
1. holly manufactured in the discriminating country but carried by vessels of
another country.
2. not manufactured in the discriminating country but carried by vessels of such
country.
3. partly manufactured in the discriminating country but carried by vessels
of another country.
4. not manufactured in the discriminating country and carried by vessels of
another country.
?1. The taxpayer seasonably filed his protest together ith all the supporting
documents. #t is already Duly *1, '111, or 1@1 days from submission of the
protest but the B#C ,ommissioner has not yet decided his protest. "esirous of
an early resolution of his protested assessment, the taxpayer should file his
appeal to the ,ourt of Tax Appeals not later than
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A. August *1, '111.
B. August *1, '111.
3. August 14, '111.
4. August 1, '111.
?'. >hich of the folloing are ;AT usually imposed hen there is a
tax amnesty)
A. ,ivil, criminal, and administrative penalties
2. ,ivil and criminal penalties
3. ,ivil and administrative penalties
4. ,riminal and administrative penalties
?*. >hich among the folloing concepts of taxation is the basis for the situs of
income taxation)
A. $ifeblood doctrine of taxation
B. Symbiotic relation in taxation
3. ,ompensatory purpose of taxation
4. Sumptuary purpose of taxation
?-. #n HAperation .andado,I the B#C temporarily closed business
establishments, including ;e "ynasty ,orporation that failed to comply ith
GAT regulations. ;e "ynasty contends that it should not be temporarily closed
since it has a valid and existing GAT registration, it faithfully issued GAT receipts,
and filed the proper GAT returns. The contention may be re3ected if the B#C
investigation reveals that
1. the taxpayer has not been regularly filing its income tax returns for the past -
years.
2. the taxpayer deliberately filed a false and fraudulent return ith deliberate
intention to evade taxes.
3. the taxpayer used falsified documents to support its application for refund of
taxes.
4. there as an understatement of taxable sales or receipts by *15 or more
for the taxable +uarter.
?4. The head priest of the religious sect Tres /ersonas Solo "ios, as the
corporation sole, rented out a 4,111 s+. m. lot registered in its name for use as
school site of a school organi&ed for profit. The sect used the rentals for the
support and up0eep of its priests. The rented lot is
1. not exempt from real property taxes because the user is organi&ed for profit.
2. exempt from real property taxes since it is actually, directly, and exclusively
used for religious purposes.
3. not exempt from real property taxes since it is the rents, not the land, that is
used for religious purposes.
4. exempt from real property taxes since it is actually, directly, and exclusively
used for educational purposes.
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