1.

Our national internal revenue laws are

a. Political in nature b. penal in nature

c. Criminal in nature

d. Civil in nature

2. Subject to inherent and constitutional limitations, the power of taxation is regarded

supreme, plenary unlimited and comprehensive
a. Basis of taxation b. situs of taxation
c. scope of taxation d. theory of taxation
3. The process or means by which the sovereign, through its law making body raises
income to defray the expenses of the government
a. Toll
b. license fee
c. taxation
d. assessment
4. Basic principles of sound tax system, except
a. Fiscal adequacy
c. Administrative feasibility
b. Equality or theoretical justice
d. Intellectual sensitivity
5. The tax should be proportional to the relative value of the property taxed at the same
rate
a. Simplicity in taxation
c. Equality in taxation
b. Equity in taxation
d. Uniformity in taxation
6. An alien who stayed for _______ in the Philippines is a non-resident alien not engaged
in business in the Philippines
a. For 183 days or more
b. For 180 days or more
c. For less than 183 days
d. For less than 180 days
7. If the taxpayer constructed a new residence and then sold his old house, is the
transaction subject to capital gains tax?
a. No, because the transaction is not in the scope of recognizing capital gain tax
b. Yes, , exemption from capital gains tax does not find application since the law is
clear that the proceeds should be used in acquiring or constructing a new principal
residence
c. No, recognizing capital gain tax will lead to double taxation
8. There is no taxable income until such income is recognized. Taxable income is
recognized when the
a. taxpayer fails to include the income in his income tax return
b. income has been actually received in money or its equivalent
c. income has been received, either actually or constructively
d. transaction that is the source of the income is consummate
9. Which of the following is not a requisite of tax regulations (BIR revenue regulations):
a. It must be reasonable and germane to the purpose of the law
b. It must be within the authority conferred or under the color of valid title
c. It must be given retroactive application
d. It must be published
10. The power to tax is exclusively lodged with the legislature, however, there are
exceptions provided by the Constitution, which of the following is not:

a. Authority of the President to fix tariff rates, import and export quotas, tonnage and
wharfage dues, and other duties and imposts

b. Power of local government units to levy taxes, fees and charges

c. Delegation to administrative agencies for implementation and collection of taxes
d. Designation to private entities the enforcement and collection of taxes
11. Which of the following is subject to VAT?
a. Sale of non-food agricultural products in their original state by farmers
b. Services of non-VAT person subject to percentage tax
c. Sale or importation of agricultural and marine food products in their original state
d. None of the above
12. Pheonix Resources Corp., a corporation registered in Norway, has a 50MW electric
power plant in San Jose, Batangas. Aside from Pheonixs income from its power plant,
which among the following is considered as part of its income from sources within the
Philippines?
a. Gains from the sale to an Ilocos Norte power plant of generators bought from the
United States
b. Interests earned on its dollar deposits in a Philippine bank under the Expanded
Foreign Currency Deposit System
c. . Dividends from a two-year old Norwegian subsidiary with operations in Zambia but
derives 60% of its gross income from the Philippines
d. Royalties from the use in Brazil of generator sets designed in the Philippines by its
engineers
13. Statement 1: Itemized deductions from income should be duly supported by vouchers or
receipts
Statement 2: Only business expenses may be deducted from the income of taxpayers
a. First statement is true while second statement is false.
b. Both statements are true
c. First statement is false while second statement is true.
d. Both statements are false
14. In filing the estate tax return, a CPA Certificate is required when the gross estate:
a. exceeds P2,000,000
b. reaches P200,000
c. exceeds P200,000
d. reaches P2,000,000
15. Crisostomo died on July 31, 2014. His estate tax return should be filed within:
a. Six months from the time he died on July 31, 2014
b. Sixty days from the time he died on July 31, 2014
c. Six months from filing of the notice of death
d. Sixty days from the appointment of an administrator
16. If the taxpayer constructed a new residence and then sold his old house, is the
transaction subject to capital gains tax?
a. No, because the transaction is not in the scope of recognizing capital gain tax

b. Yes, , exemption from capital gains tax does not find application since the law is
clear that the proceeds should be used in acquiring or constructing a new
principal residence
c. No, recognizing capital gain tax will lead to double taxation
d. Yes, As regards transactions affected by capital gain tax, the NIRC speaks of real
property with respect to individual taxpayers, estate and trust but only speaks of
land and building with respect to domestic and resident foreign corporation
17. Which of the following is not a requisite of tax regulations (BIR revenue regulations):
e. It must be reasonable and germane to the purpose of the law
f. It must be within the authority conferred or under the color of valid title
g. It must be given retroactive application
h. It must be published
18. The power to tax is exclusively lodged with the legislature, however, there are
exceptions provided by the Constitution, which of the following is not:
e. Authority of the President to fix tariff rates, import and export quotas, tonnage and
wharfage dues, and other duties and imposts
f. Power of local government units to levy taxes, fees and charges
g. Delegation to administrative agencies for implementation and collection of taxes
h. Designation to private entities the enforcement and collection of taxes
19. Which of the following is the least Constitutional limitations?
a. Due process clause
c. Non-impairment clause
b. Equal protection
d. Progressivism clause
20. Which of the following is not an attribute of characteristic of taxes?
a. A tax is a forced charge
b. It is payable in money
c. It is progressive
d. It is levied for public purposes
21. Which of the following will not interrupt the running of the prescriptive period for
assessment and collection of taxes:
a. When the taxpayer requests for the reinvestigation which is granted by the
Commissioner
b. When the Commissioner is prohibited from making the assessment or beginning
distrait and levy or a proceeding in court and for thirty (30) days thereafter
c. When the taxpayer cannot be located in the address given by him in the return
d. When the taxpayer is out of the Philippines
22. The power to decide disputed assessments, refunds of internal revenue taxes, fees or
other charges, penalties imposed in relation thereto, or other matters arising under the
Tax Code or other laws administered by the Bureau of Internal Revenue is vested with:
a. The Secretary of Finance
b. The Commissioner of the BIR
c. The Court of Tax Appeals
d. The Regular Courts

23. Edgar, a Filipino citizen who supports his senior citizen father, reported the following
earnings and expenses during the year:
Gross compensation income
P200,000
Gross receipts derived from rent
50,000
Personal living expenses
180,000
Premium payments on hospitalization insurance
5,000
How much is the net taxable income of Edgar by taking the best option to minimize tax?
a. 52,400
c. 127,600
b. 175,000
d. 180,400
Bases for 33 & 34
X, single reported the following income and expenses during the taxable year:
Within
without
Compensation income
P240,000
Professional income
300,000
P200,000
Interest income
100,000
60,000
Dividend income
60,000
40,000
X opted to deduct OSD
24. What is the amount of net income subject to tabular tax and final tax in the Philippines if
X is a resident alien?
Subject to
Tabular tax
Final tax
a. P370,000
P160,000
b. 410,000
220,000
c. 520,000
160,000
d. 640,000
260,000
25. What is the amount of net income subject to tabular tax and final tax in the Philippines if
X is a resident citizen?
Subject to
Tabular tax
Final tax
a. 450,000
154,000
b. 550,000
160,000
c. 770,000
180,000
d. 790,000
160,000
26. Mr. Wall e, a citizen and resident of the Philippines had the stock transactions during
200x:
(a) Capital gain on sales directly to buyer at P280,000 of shares of a domestic corporation,
P80,000
(b) Capital gain on sale directly to a buyer at P 2,000,000 of land in Makati. Philippines,
P300,000
The total capital gains tax paid during the year should be
a. P 19,400
b. P 22,000

c. P108,000
d. P124,000

For items 36-37

In 200A, Mr. Marvin Ebojo,a native of Pangasinan, received the following during the year:
Proceeds from copyright royalty, net of tax
P 11,250
Proceeds from mineral claim royalty, net of tax
12,000

Share from trading partnership, net of withholding tax

124,000

Assume that Mr. Ebojo is single, compute for the following:

27. Total final tax on Mr. Ebojos income
a. P 50,000
c. P31,250
b. P 34,250
d. P 4,250
28. Income tax still due and payable per ITR
a. P 50,000
c. P 31,250
b. P 34,250
d. P 0
For items 38-40
Mr. Crisanto Estrada, widower with three (3) qualified dependent children and a practicing
accountant has the following receipts and expenditures for the calendar year ended December
31,200A:
Receipts:
Professional fees
P500,000
Allowance as director of Corporation A
25,000
Interest on time and savings deposits, net of 20% final tax
16,000
Commissions
5,000
Expenditures:
Salaries of assistants
96,000
Partial payment of loan
20,000
Interest on the loan (the loan was used for the repair of
the residential house of Mr. Estrada)
3,850
Travelling expenses business related
11,000
Light and water Office
7,890
Light and water Residence
6,500
Stationeries and supplies used in the office
1,960
Office rent
60,000
Contributions exclusively for religious purposes
38,500
29. The allowable deductions from the business gross income is
a. P209,165
c. P212,625
b. P210,725
d. P176,850
30. The net income (for income tax purposes) after itemized deduction but before personal
and additional exemptions is
a. P317,835
c. P320,835
b. P319,275
d. P334,650
31. The income tax due in ITR is
a. P 56,550
c. P 38,350
b. P 50,000
d. P 36,459
c.
32. The excess of minimum corporate income tax over the normal income tax is deductible
from normal income tax for the next succeeding
a. 2 years
b. 3 years
c. 4 years
d. 5 years

33. Which of the following is an incorrect determination of income tax?

a. 25% on gross income within of a nonresident cinematographic film
b. 30% income tax on the net taxable income of a nonresident foreign corporation
c. 10% income tax on proprietary education institution
d. 30% income tax on net business income of government owned and controlled
corporation
The following Income and Expenses are shown by X Corporation:
Gross Income
Business expenses
Sale of land and warehouse (cost P2M)

Within
8,000,000
5,000,000
3,000,000

Outside
4,000,000
3,000,000

34. If X is a domestic corporation, how much is the taxable income and income tax due in
the Philippines per annual ITR?
Taxable Income
Income Tax Due
a. P3,000,000
P 900,000
b. P4,000,000
P1,200,000
c. P5,000,000
P1,500,000
d. P7,000,000
P2,100,000
35. If X is a resident foreign corporation, how much is the taxable income and income due in
the Philippines per annual ITR?
Taxable Income
Income Tax Due
a. P3,000,000
P 900,000
b. P4,000,000
P1,200,000
c. P5,000,000
P1,500,000
d. P7,000,000
P2,100,000
The Tacurong Company has the following business income and expenses in year 201A:
From Philippines sources:
Gross Income
Expenses
From Business
450,000
290,000
Dividends from domestic corporation
80,000
From other countries:
Saudi Arabia
180,000
80,000
Australia
75,000
25,000
Japan
190,000
100,000
Total foreign income tax paid is P60,000 and Philippine quarterly income tax paid is P42,000.
36. The income tax still due and payable if Tacurong is a resident foreign corporation is:
a. P120,000
c. P 30,000
b. P 72,000
d. P 18,000
e.
f.

37. The income tax still due and payable if Tacurong is a resident foreign corporation
a. P120,000
c. P30,000
b. P 72,000
d. 18,000
g.
38. Mrs. Anna Ayugat died in year 200A and was survived by her husband who is a
businessman and two minor children. After her death, her exclusive estates gross
income for year 200A amounted to P200,000. The itemized allowable deductions
amounted to P20,000. To determine the estates minimum income tax due, the net
taxable income for year 200A is
h.
a. P180,000
b. P100,000
c. P130,000
d. P 70,000
i.
j.
Mr. Mathai died in November 1, 200A. After his death, his estate has a gross
business receipts of P400,000 during the year 200A. He is survived by his mother,
who has annual rent income of P200,000.
39. How much would be the net income of the estate subject to income tax in 200A?
a. P240,000
c. P220,000
k.

b. P200,000
d. P190,000

40. If in the year following the death of Mr. Mathai, his estates gross business receipts
amounted to P500,000, and his estate has not been transferred to his mother. How
much would be the tax saving if the administrator of the estate would distribute P150,000
income of the estate to Mathais mother?
a. P3,500
c. P4,000

l.

b. P4,500
d. P5,000