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Philippine Tax and Income SystemQuiz 1 The following are the powers and authorities of the Commissioner of Internal Revenue, except: a. To give effect and administer the supervisory of police powers conferred to it by the Tax Code or other laws. It is the principal government office that handles the...

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Philippine Tax and Income System

Quiz 1 1. The following are the powers and authorities of the Commissioner of Internal Revenue, except: a. To give effect and administer the supervisory of police powers conferred to it by the Tax Code or other laws. 2. It is the principal government office that handles the administration and supervision of tax related matter : Department of Finance 3. Which of the following is not within the power of the Commissioner of Internal Revenue to make an assessment? - Compromise tax cases 4. The following government officials are tasked to administer and enforce tax administrative functions, except: Supreme Court Justice 5. Which of the following does not fall within the powers and duties of the Bureau of Internal Revenue? To summon, examine and take testimony of persons. 6. The power to interpret the provisions of the National Internal Revenue Code shall be under the exclusive and original jurisdiction of the : Commissioner of Internal Revenue 7. The Commissioner of Internal Revenue cannot : Compromise criminal aspect of tax violations if already filed in court 8. The Chief Officials of the Bureau of Internal Revenue are : A Commissioner and four (4) Deputy Commissioners 9. The following are powers of the Commissioner shall not be delegated, except: All of the answers correct. 10. The following BIR Officers are task to administer and enforce the Tax Code, except: Secretary of Finance Quiz #2 1. The strongest of all the inherent power of the state because without it, the governments can neither survive nor dispense any of its power and function effectively.- Power of Taxation 2. Which of the following statements is correct?- Every sovereign government has the inherent power of tax 3. No Law granting tax exemption shall be passed without the concurrence of: - Majority of all members of congress. 4. The president of the Philippines and the Prime minister of Japan centered into executive agreement in respect of a loan facility to the Philippines from Japan whereby it was stipulated

that interest on loans granted by private Japanese financial institution in the Philippines shall not be subject to Philippine income taxes. What basic characteristic of taxation has been violated by this agreement?- Legislative in Character 5. Which of the following statement is wrong? A revenue bill: May originate from the Senate and on which same bill the House of Representatives may propose amendments: 6. The levying or imposition of tax and collection of the tax are processes which institute the taxation system.- Aspects of taxation 7. Tax avoidance is the use by the tax payer of legal or fraudulent means to avoid or defeat taxes - False, true 8. The principal purpose of taxation is. - To raise revenues for governmental needs. 9. The aspects of taxation are- Mali yun Legislative 10. Enforced proportional contributions from person and property levied by the state by virtue of its sovereignty for the support of the government and for all public needs. – Taxes Source: https://www.studocu.com/ph/document/adamson-university/marketing/lecturenotes/income-taxation-cpar-test-bank/1688289/view

Quiz # 3 1. During the taxable year, Mr. Romeo Dy separated legally from his wife, JaneLee. The legally separated spouses have five qualified dependent children. Both spouses were earning with the following gross taxable income: Mr. Dy, P380,000: Ms. Lee, P290,000. For custody, the court granted Mr. Dy awarded two children and Ms. Lee the remaining children. Meanwhile, Mr. Dy is supporting his niece who is 21 years old, unmarried and incapable of self- support. Both spouses have monthly premium payment for health insurance of P150 each and P1,000 each for yearly life insurance.The allowable deductions for health and hospitalization insurance of Mr. Dy is: - No correct answer 2. During the taxable year, Mr. Romeo Dy separated legally from his wife, JaneLee. The legally separated spouses have five qualified dependent children. Both spouses were earning with the following gross taxable income: Mr. Dy, P380,000: Ms. Lee, P290,000. For custody, the court granted Mr. Dy awarded two children and Ms. Lee the remaining children. Meanwhile, Mr. Dy is supporting his niece who is 21 years old, unmarried and incapable of self- support. Both spouses have monthly premium payment for health insurance of P150 each and P1,000 each for yearly life insurance.The additional personal exemption of Ms. Lee is: Wrong Answer of 75, 000 3. During the taxable year, Mr. Romeo Dy separated legally from his wife, JaneLee. The legally separated spouses have five qualified dependent children. Both spouses were earning with the following gross taxable income: Mr. Dy, P380,000: Ms. Lee, P290,000. For custody, the court granted Mr. Dy awarded two children and Ms. Lee the remaining children. Meanwhile,

Mr. Dy is supporting his niece who is 21 years old, unmarried and incapable of self- support. Both spouses have monthly premium payment for health insurance of P150 each and P1,000 each for yearly life insurance.The allowable deductions for health and hospitalization insurance of Mr. Dy is: No correct answer

4. During the taxable year, Mr. Romeo Dy separated legally from his wife, JaneLee. The legally separated spouses have five qualified dependent children. Both spouses were earning with the following gross taxable income: Mr. Dy, P380,000: Ms. Lee, P290,000. For custody, the court granted Mr. Dy awarded two children and Ms. Lee the remaining children. Meanwhile, Mr. Dy is supporting his niece who is 21 years old, unmarried and incapable of self- support. Both spouses have monthly premium payment for health insurance of P150 each and P1,000 each for yearly life insurance.The taxable income of Ms. Lee is: Wrong answer of 165,000 5. During the taxable year, Mr. Romeo Dy separated legally from his wife, JaneLee. The legally separated spouses have five qualified dependent children. Both spouses were earning with the following gross taxable income: Mr. Dy, P380,000: Ms. Lee, P290,000. For custody, the court granted Mr. Dy awarded two children and Ms. Lee the remaining children. Meanwhile, Mr. Dy is supporting his niece who is 21 years old, unmarried and incapable of self- support. Both spouses have monthly premium payment for health insurance of P150 each and P1,000 each for yearly life insurance.Mr. Romeo Dy is classified during the taxable year as: Head of Family 6. During the taxable year, Mr. Romeo Dy separated legally from his wife, JaneLee. The legally separated spouses have five qualified dependent children. Both spouses were earning with the following gross taxable income: Mr. Dy, P380,000: Ms. Lee, P290,000. For custody, the court granted Mr. Dy awarded two children and Ms. Lee the remaining children. Meanwhile, Mr. Dy is supporting his niece who is 21 years old, unmarried and incapable of self- support. Both spouses have monthly premium payment for health insurance of P150 each and P1,000 each for yearly life insurance.The additional personal exemption of Mr. Dy is: P50,000 7. During the taxable year, Mr. Romeo Dy separated legally from his wife, JaneLee. The legally separated spouses have five qualified dependent children. Both spouses were earning with the following gross taxable income: Mr. Dy, P380,000: Ms. Lee, P290,000. For custody, the court granted Mr. Dy awarded two children and Ms. Lee the remaining children. Meanwhile, Mr. Dy is supporting his niece who is 21 years old, unmarried and incapable of self- support. Both spouses have monthly premium payment for health insurance of P150 each and P1,000 each for yearly life insurance.The filing status of Ms. Lee is: Head of the Family 8. During the taxable year, Mr. Romeo Dy separated legally from his wife, JaneLee. The legally separated spouses have five qualified dependent children. Both spouses were earning with the following gross taxable income: Mr. Dy, P380,000: Ms. Lee, P290,000. For custody, the court granted Mr. Dy awarded two children and Ms. Lee the remaining children. Meanwhile, Mr. Dy is supporting his niece who is 21 years old, unmarried and incapable of self- support. Both spouses have monthly premium payment for health insurance of P150 each and P1,000 each for yearly life insurance.The total personal exemptions of Ms. Lee is: Wrong answer of P150,000

9. During the taxable year, Mr. Romeo Dy separated legally from his wife, JaneLee. The legally separated spouses have five qualified dependent children. Both spouses were earning with the following gross taxable income: Mr. Dy, P380,000: Ms. Lee, P290,000. For custody, the court granted Mr. Dy awarded two children and Ms. Lee the remaining children. Meanwhile, Mr. Dy is supporting his niece who is 21 years old, unmarried and incapable of self- support. Both spouses have monthly premium payment for health insurance of P150 each and P1,000 each for yearly life insurance.The total personal exemptions of Mr. Dy is: 100, 000 10. During the taxable year, Mr. Romeo Dy separated legally from his wife, JaneLee. The legally separated spouses have five qualified dependent children. Both spouses were earning with the following gross taxable income: Mr. Dy, P380,000: Ms. Lee, P290,000. For custody, the court granted Mr. Dy awarded two children and Ms. Lee the remaining children. Meanwhile, Mr. Dy is supporting his niece who is 21 years old, unmarried and incapable of self- support. Both spouses have monthly premium payment for health insurance of P150 each and P1,000 each for yearly life insurance.The taxable income of Mr. Dy is: 280, 000 Assignment #1

An individual taxpayer provided the following information

Gross business income, Philippines

5,525,000

Gross business income, China

1,350,000

Business expenses, Philippines

3,375,000

Business expenses, China

535,250

1. The amount taxable income, if thetaxpayer is a nonresident alien engaged in trade or business. Assume further that his country allows personal exemptions to Filipinos not residing therein as follows: Basic exemptions - P100,000: Additional exemption P50,00 per child. – Wrong Answer 2M 2. The amount taxable income, if the taxpayer is a resident alien, is: Wrong P2,914,750 3. The amount taxable income, if the taxpayer is a nonresident alien not engaged in tradeor business, is: Wrong P2,914,750 4. The amount taxable income, if the taxpayer is a nonresident citizen, is: Wrong answer P2,914,750 5. The amount of tax due, if the taxpayer is a nonresident citizen, is: P637,000 6. The amount taxable income, if the taxpayer is a resident citizen, is: 2,914,750

7. The amount of tax due, if the taxpayer is a nonresident alien not engaged in tradeor business, is: Wrong Answer P500,00 8. Referring to the preceding problem, the amount of tax due is, Wrong Answer: P897,720 9. The amount of tax due, if the taxpayer is a resident alien, is: Wrong Answer : P897,720 10. The amount of tax due, if the taxpayer is a resident citizen, is: P897,720

Quiz #4: 1.

The NCIT would be: P150,000 for sales of 12M, Cost of sales 7.5m and Deductions of 4M

2. The British Aircraft, a non-resident foreign corporation, leased aircraft to Bacolod Golden Airlines, a domestic corporation, presented the following data in its Philippine operation: Gross taxable income P15,000,000 Operating expenses P9,750,000. The amount of income tax payable in the Philippines would be: Wrong Asnwer : P1,575,000 3. Moreover, the company had an excess tax payment of P12,500 in 2016 from which it had decided to claim tax credit on the excess. What is the income tax still payable at the end of first quarter? Wrong Answer : P28,300 4. If it is a resident corporation, its income tax is: P450,000 5.

Moreover, the company had an excess tax payment of P12,500 in 2016 from which it had decided to claim tax credit on the excess. The income tax still payable for the year 2017 : Wrong Answer P68,610

6.

If the company opted to use the OSD, MCIT would be: Wrong Answer P60,000 7.

If it is a domestic corporation, its income tax is _____. Wrong answer P450,000

8.

If the company opted to use the OSD, NCIT would be: Wrong P510,000

9.

The income tax to be paid, if the company opted to use the OSD is: Wrong P510,000

10.

The amount of income tax still payable on the 2nd quarter would be: P165,000

Assignment #2 1. The applicable income tax rate for Cargospeed International Corporation is: 30 % 2. The amount of income tax due of Business International School for the year 2017 is: P5,826,876 3. The applicable income tax rate for Business International School is: 10 % 4. The amount of income tax due of Business International School for the year 2016 is: P3,535,269 5. The amount of income tax due of Cargospeed International Corporation for the year 2017 is: P17,480,628 6. The net income after tax to be presented on the income statement of Cargospeed International Corporation for the year 2017 is: P40,788,132 7. The amount of income tax due of Cargospeed International Corporation for the year 2016 is: P10,605,807 8. The amount of income tax expense to be recognized on the income statement of Cargospeed International Corporation for the year 2017 is: P17,480,628 9. The amount of income tax expense to be recognized on the income statement of Business International School for the year 2017 is: P5,826,876

10. The net income after tax to be presented on the income statement of Business International School for the year 2017 is:

Long Quiz 1 1. What is the amount of excess MCIT that would be carried over from year 5 to year 6? - 0-

2. What is the amount of excess MCIT that would be carried over from year 4 to year 5? P24,000

3. Refer to image captured 4. How much is the tax due in year 3? P-0-

5. How much is the income tax due that can be collected by the Philippine Government? P600,000

6. How much is the income tax still payable in year 4? P24,000

7. How much is the income tax still payable in year 5? P150,000

8. How much is the income tax still payable in year 3? P-0-

9. . P150,000

10.

b . P-0-

11. 24, 000

Quiz # 5 1. Rent income includes the following, except: Advanced rent payment with restriction 2. A taxpayer received a basic salaray of P1,152,000 per year. At the end of taxable year, he also received 13th month pay which is equivalent to his one month basic salary. Is the 13th month pay of the taxpayer taxable? Answer I No, because 13th month pay is tax exempt and does not form part of the

compensation income. Answer II Yes, because the 13th month pay he received already esceeded the P82,000 threshold. -No, because 13th month pay is tax exempt and does not form part of the compensation income is wrong:Yes, because the 13th month pay he received already esceeded the P82,000 threshold is correct 3. Statement I. Compensation income includes salary, honoraria, allowances, separation pay, and retirement pay. Statement II. Representation and travelling allowances that are fixed in amount are not taxable. Only Statement mpensation income includes salary, honoraria, allowances, separation pay, and retirement pay is correct 4. Retirement pay from employer is not taxable, provided the following requirements had been complied with, except: - The retiree should have been employed for 5 years in the said company 5. Separation pay brought about by the following circumstances is non-taxable, except: Voluntary resignation 6. Mr. Chris Cruz, 60 years old, manager at DEF Company, retired during the taxable year. Because of his exemplary performance for the last 25 years, the company, which did not have an approved retirement plan, gave him P500,000 as retirement pay. In addition, he also received P300,000 from SSS as a retirement benefit. Is the total retirement pay of Mr. Crz from his employer and the SSS taxable? Answer I No, the total amount of P800,000 is not a taxable retirement pay. Answer II Partly taxable, partly not. The amount from his employer is taxable while the amount from the SSS is not taxable. No, the total amount of P800,000 is not a taxable retirement pay is wrong:Partly taxable, partly not. The amount from his employer is taxable while the amount from the SSS is not taxable is correct 7. Which of the following is not a requisite for earnings to be taxable? The gain or profit must fully satisfy the recipient. 8. Ms. Juana Dela Cruz, Vice President for Corporate Management, regularly receives representation and travelling allowance of P25,000 a month in addition to her basic salary. Is the P25,000 taxable? I. No, because the representation and travelling allowance is not a compensation. II. Yes, unless the representation and travelling allowance is subject to liquidation or reimbursable. Yes, unless the representation and travelling allowance is subject to liquidation or reimbursable is correct: No, because the representation and travelling allowance is not a compensation is wrong 9. Mr. Juan Dela Cruz recently received P200,000 as a separation pay from his employer, ABC Corporation, since the company was undergoing reorganization due to merger with XYZ Corporation. Is the amount received by Mr. Dela Cruz taxable? Answer I No, because the separation was involuntary on his part. Answer II Yes, because by nature, separation pay is generally taxable. No, because the separation was involuntary on his part is correct: Yes, because by nature, separation pay is generally taxable is wrong 10. Statement I. A leasehold improvement that becomes the property of the lessor at the end of the lease term is a donation from the lessee.

Statement II. A leasehold improvement that becomes the property of the lessor at the expiration of the lease term is included in gross taxable income of the lessor. Neither statement is correct

Assignment # 5

1. The amount of net taxable compensation income is: P482,500 2. The amount of non-taxable de minimis benefits is: P53,000 3. The amount of taxable 13th month and other benefits is: P0 4. The amount of gross compensation income is: P741,000 5. The amount of excess de minimis benefits to be carried over in the "other benefits" section of 13th month and other benefits account is: . P20,500 6. The total amount of personal exemptions is: . P125,000

7. The amount of non-taxable 13th month and other benefits is: P70,500 8. The amount of non-taxable income is: P133,500 9. The amount of ceiling of non-taxable 13th month and other benefits is: P82,000 10. The amount of gross taxable compensation income is: P607,500 Quiz # 6 1. The grossed-up monetary value of fringe benefits shall be computed as: The monetary value of the fringe benefit shall be divided by 75% for non-resident alien not engaged in business or trade in the Philippines. 2. Statement I Fringe benefits received by rank and file employees are not subject to fringe benefits tax, but included in the gross taxable income Statement II Fringe benefits granted to managerial employees are subject to fringe benefits tax and the employer withholds the amount of tax- Both statements are correct 3. An ordinary asset may include the following, except: Personal property of the taxpayer used in his/her trade or business 4. The following are the requirements so that the retirement pay received by an employee from his/her employer is nontaxable, except: The retiree should have been at least 40 years old at the time of retirement. 5. Statement I Fringe benefits received by an employee may either be subject to final tax or basic tax Statement II Fringe benefits received by supervisor or manager are nontaxable because of the complexities of functions attached to the position Only Statement I is correct 6. Statement I Under outright method of recognizing income on leasehold improvement, the tax base is the cost or fair market value of the leasehold improvement whichever is higher. Statement II The fair market value of the leasehold improvement in the outright m...