AC 528: CONTEMPORARY ISSUES IN ACCOUNTING, AUDIT & MANAGEMENT/GSLY

PREPARATORY EXAMINATION QUESTIONS/June 22 & 23 - 2015

1. The three basic rules of tax requirements which stands for the defacto
meaning of B.I.R.
B - Bookkeeping
I - Invoicing
R Registration
2. What is the issue on Authority To Print (ATP) i.e., the granting and
releasing an approved ATP. What does the law on ATP states?
The ATP must be released regardless of the disposition of the open cases but in
practice, they will hold.
3. As regards the issue on Open Cases, when are such cases considered
terminated or closed?
For purpose of reporting to external agencies, open cases are treated as closed,
when reported with:
Collection
Assessment
Or both
4. NOLCO: Who are entitled to deduct NOLCO or net operating loss carryover
per the BIR law?
The following taxpayers are entitled to NOLCO:
1) Individuals engaged in trade or business or in the exercise of his profession
2) Domestic and resident foreign corporations subject to the normal corporate
income taw or preferential tax
3) Estates and trusts
In most cases, only domestic and resident foreign corporations (subject to
normal tax and preferential tax rates are given some priority in the
recognition of the NOLCO. What is the reason for discouraging those
entitled individuals (including estates and trusts) engaged in trade or
business or in the exercise of professionto effect, that only corporations
are entitled to deduct NOLCO?
5. Explain: the running of the three-year period for the expiry of NOLCO is
not interrupted by the fact that such corporation is subject to MCIT in any
taxable year during such three-year period.
6. When is the MCIT imposed? (2 conditions)
1) This tax applies only to domestic and resident foreign corporations.
2) The tax rate to be imposed is 2% of gross income.
3) The computation and the payment shall apply at the time of filing the quarterly
corporation income tax
4) The effectivity shall commence on the 4th taxable year immediately following the
year in which such corporation commenced its business operation
5) The tax shall be imposed whenever the corporation has zero or negative taxable
income or whenever the MCIT is greater than the Normal Income Tax (NIT)
7. Mandatory Efps ENROLLMENT of certain taxpayers (5 categories of
Taxpayers)

Mandatory eFPS enrollment of certain taxpayers

The following taxpayers are reminded by the BIR to strictly comply with the
requirement to enroll and file their tax returns and pay the tax due thereon through
the electronic filing and payment system (eFPS) as earlier mandated under Revenue
Regulations (RR) 10-07:
1. Large taxpayers pursuant to Revenue Regulations
2. All government bidders
3. Corporations with paid up capital stock of P10 M
4. Top 20,000 corporations
5. Top 5,000 individual taxpayers
8. What is the RELIEF SYSTEM?
RELIEF means Reconciliation of Listings for Enforcement. It supports the third party
information program of the Bureau through the cross referencing of third party
information from the taxpayers' Summary Lists of Sales and Purchases prescribed to
be submitted on a quarterly basis.
9. Who are required to submit Summary List of Sales?
Effective January 1, 2012 - RR 01-2012, All VAT taxpayers are required to submit the
quarterly summary list of sales (SLS). The requirement previously applies to VATregistered taxpayers with total quarterly sales/ receipts (net of VAT) exceeding P2.5 M
Who are required to submit Summary List of Purchases?
Effective January 1, 2012- RR 01-2012, All VAT taxpayers are required to submit the
quarterly summary list of purchases (SLP). The requirement previously applies to VATregistered taxpayers with total quarterly total purchases (net of VAT) exceeding P1M
10. In cases there are tax discrepancies (for most cases involving declaration of
sales/receipts) in the RELIEF (Reconciliation of Listings for Enforcement)
Program (RMO 31-2002) what are the usual steps or procedures that the
Bureau will execute to fully inform the concerned tax payer?
11. Related to the above question, resolve the following special contemporary issues:
a.) In case the supporting documents (invoices/receipts) evidencing the sources of
input tax credits were issued outside the taxable period covered by the claims
(out-of-period claims), can the input taxes generated therefrom still be credited
upon verification that the same have not yet been claimed?
b.) What procedures should be performed by the Refund Processing Office to prevent
double claim of out-of-period input taxes?
c.) There are cases where sales transactions of the suppliers of exporters-claimants
were already considered as effectively zero-rated by virtue of BIRs approval of
their applications for zero-rating. Notwithstanding such approval, these suppliers
still issued VAT invoices, which became the sources of the claim for tax credit.
Will these input taxes be denied /disallowed or shall the corresponding output
taxes be assessed against the suppliers?
d.) When should the 2-year period for filing the claim for input tax credit be reckoned
from: (i) the end of the taxable quarter when the transaction was made, or (ii)
the date of filing the VAT return?
e.) The taxpayer did not maintain separate input tax account in its books of account
(VAT on purchases is capitalized or charged to cost in full). During the succeeding
period, the taxpayer made a journal entry setting up the input tax account and

crediting expense/ capitalized asset account. Can this input tax credit be claimed
for Refund in the year when the said account was adjusted?