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Instruction: Determine the best answer per question given. This quizzer is intended
to test your knowledge on Corporate Taxation under the Philippine Income Tax
System.
(1) Hungry Shark corporation, in its third year of operations, had the following
data:
Expenses, Philippines
1,000,000.00
Expenses, foreign
500,000.00
(a) P1,000,000
(b) P2,000,000
(c) P500,000
(d) P1,500,000
(a) For domestic corporations, the capital gain tax on sale of shares of stock are
the same as the capital gain on such assets of resident citizens of the Philippines.
(b) The final tax on interest on foreign currency deposit under the expanded
foreign currency deposit system for domestic corporations is the same as that of
resident citizens of the Philippines at seven and one-half percent (7 %)
(c) Dividend received by a domestic corporation from a domestic corporation
subject to tax is exempt from income tax of the corporation receiving the dividend.
(3) A domestic corporation, in its fourth year of operations, had the following data
for the year:
Net sales P
2,000,000.00
a domestic corporation
200,000.00
Capital gain on sale thru a real estate broker of land and building
Cost of sales
600,000.00
Operating Expenses
500,000.00
The income tax still due at the end of the year is:
(a) P125,000
(b) P80,000
(c) P270,800
(d) P220,800
(4) Statement 1: The minimum corporate income tax of a trading or
manufacturing concern is based on gross profit from sales.
(c) The first statement is true but the second statement is false
(d) The first statement is false but the second statement is true
(a) A domestic corporation is subject to MCIT on gross income from within and
outside the Philippines.
(b) A resident corporation is subject to the MCIT on gross income from within the
Philippines.
(d) The optional gross income tax (GIT) applies to domestic and resident
corporations.
(6) Selected cumulative balances were taken from the records of Flappy Bird
Corporation, a domestic corporation, in its fourth year of operations in 2013, which
had an income tax refundable of P10,000 for a preceding year for which there is a
certificate of tax credit.
The income tax due (or refundable) at the end of the year:
(a) P321,000
(b) P371,000
(c) P43,000
(d) P76,000
(7) Which of the following statements is wrong?
(a) The quarterly income tax of a corporation for any of the first, second or third
quarters is filed, and the tax due is paid, within sixty (60) days after the close of the
quarter.
(b) The annual income tax return of a corporation is filed, and the tax due is paid
on or before the fifteenth day of the fourth month following the close of the taxable
year
(c) There can be an income tax refundable in a quarterly income tax return of a
corporation
(d) There can be an income tax refundable in the final income tax return of a
corporation
(c) Is based on the net income per books after the income tax
(9) All, except one, of the following, are not subject to the improperly accumulated
earnings tax (IAET). Which is the exception?
(10)The following except one, give rise to the presumption that a corporation is
improperly accumulating profits. Identify the exception:
(c) The corporation permits its profit to accumulate beyond the reasonable needs
of the business
(11)Angry Birds Inc., a domestic corporation, had the following selected data for
2009, the accumulated earnings for which year the Bureau of Internal Revenue (BIR)
considered to be improper:
(12)A mother corporation is abroad, with business in the Philippines through its
branch in the Philippines. Which of the following statements is wrong?
(a) In a year, the branch in the Philippines is subject to a profit remittance tax on
its remittance of profits to the mother company abroad, even if the profits from
which the remittance was made was a prior years profits.
(b) The profit remittance tax is fifteen (15%) percent of the total amount or profit
for remittance, as applied for with the bank.
(c) The bank with which the application for remittance was filed would be the
withholding agent of the Bureau of Internal Revenue
(d) Even activities registered with the Philippine Economic Zone Authority (PEZA),
from the profits from which the remittance is applied for, will be subject to the profit
remittance tax.
(13)Statement 1: A private educational institution is a special corporation subject to
income tax on all its income at ten percent (10%)
Statement 2: The Government Service Insurance System and the Social Security
System are subject to income tax.
(15)Corporations exempt from income tax are enumerated under Section 30 of the
National Internal Revenue Code.
Statement 1: They are not subject to income tax on income received which are
incidental or necessarily connected with the purposes for which they were
organized and are operating.
Statement 2: They are subject to income tax on income of whatever kind and
character from any of their properties, real or personal, or from any activity
conducted for profit, regardless of the disposition of such income.
(d) Joint venture or consortium for engaging in energy operations under a service
contract with the government.
(18)Using the information on question 17, what is the income tax due of Temple Run
Company:
(19)Using the information on question 17, what is the net taxable income of Mr.
Temple:
Deductions 1,000,000.00
The Optional Corporate Income Tax or Gross Income Tax of Zombie Tsunami is:
(22)Candy Crush Inc., a domestic corporation has the following data in 2013:
(23)Using the same information on question 22, the Optional Corporate Income Tax
of Candy Crush assuming it is a service business:
(a) P6,000
(b) P12,000
(c) P14,000
(d) P15,000
(a) P6,000
(b) P12,000
(c) P14,000
(d) P15,000
(a) P6,000
(b) P12,000
(c) P14,000
(d) P15,000
(a) P6,000
(b) P12,000
(c) P14,000
(d) P15,000
(b) It is not necessary for the purpose of the business considering all the
circumstances of the case
(b) Firms which were registered with BIR in 1994 and earlier years shall be covered
by the MCIT beginning January 1, 1998.
(c) Firms which were registered with the BIR in any month in 1998 shall be
covered by the MCIT in 2002 after the lapse of three (3) calendar years from 1998.
(c) Depository banks under the Expanded Foreign Currency Deposit System
(FCDS) on income from foreign currency transactions with the local commercial
banks.
(d) Firms that are taxed under a special income tax regime
(33)Which of the following need not be deducted from gross sales to arrive at gross
income for purposes of computing MCIT of a merchandising/ manufacturing
concern?
(34)Which of the following need not be deducted from gross sales to arrive at gross
income for purposes of computing MCIT of a service concern?
(35)Which of the following need not be deducted from gross sales to arrive at gross
income for purposes of computing OCIT or GIT of a merchandising/ manufacturing
concern?
(36)Which of the following need not be deducted from gross sales to arrive at gross
income for purposes of computing OCIT or GIT of a service concern?
Expenses 3,000,000.00
Other income
Additional information:
Cut the rope Corporation, a domestic corporation, was registered with the BIR in
1997. The following data on income taxes during the years 2004 to 2011 were made
available.
(40)Income tax payable for 2004
MCIT - P12,000
(46)A tax imposed whether a corporation has zero or negative taxable income or
whenever the minimum income tax is greater than the normal income tax due from
such corporation:
(47)A corporation which was registered with the Bureau of Internal Revenue in May
2007 shall be covered by MCIT in:
(a) 2008 (b) 2009 (c)
2010 (d) 2011
(48)The BIR form used by corporations to file quarterly income tax returns:
(49)The BIR form used by corporations to file its annual income tax return:
(50)According to tax code, the last payment of filing income tax returns for all
corporations having calendar year or fiscal year of reporting is:
(b) Once the income tax return, regardless of the month, is completed, it may be
filed at any day of the year immediately following the taxable year
(c) Every April 15 immediately following the taxable year for all corporations
having calendar year and fiscal year of reporting
(d) On the 15th day of the fourth (4th) month immediately following the taxable
year
_________________________________________________________________________________
ANSWERS:
(1) Hungry Shark corporation, in its third year of operations, had the following
data:
Expenses, foreign
500,000.00
(a) P1,000,000
(b) P2,000,000
(c) P500,000
(d) P1,500,000
Answer: (d)
Taxable
Income
P 1,500,000.00
(a) For domestic corporations, the capital gain tax on sale of shares of stock are
the same as the capital gain on such assets of resident citizens of the Philippines.
(b) The final tax on interest on foreign currency deposit under the expanded
foreign currency deposit system for domestic corporations is the same as that of
resident citizens of the Philippines at seven and one-half percent (7 %)
Answer: (d)
(3) A domestic corporation, in its fourth year of operations, had the following data
for the year:
Net sales P
2,000,000.00
a domestic corporation
200,000.00
Capital gain on sale thru a real estate broker of land and building
Cost of sales
600,000.00
Operating Expenses
500,000.00
The income tax still due at the end of the year is:
(a) P125,000
(b) P80,000
(c) P270,800
(d) P220,800
Answer: (b)
MCIT P 28,000
RCIT P 270,000
(c) The first statement is true but the second statement is false
(d) The first statement is false but the second statement is true
Answer: (a)
(a) A domestic corporation is subject to MCIT on gross income from within and
outside the Philippines.
(b) A resident corporation is subject to the MCIT on gross income from within the
Philippines.
(d) The optional gross income tax (GIT) applies to domestic and resident
corporations.
Answer: (d)
(6) Selected cumulative balances were taken from the records of Flappy Bird
Corporation, a domestic corporation, in its fourth year of operations in 2013, which
had an income tax refundable of P10,000 for a preceding year for which there is a
certificate of tax credit.
The income tax due (or refundable) at the end of the year:
(a) P321,000
(b) P371,000
(c) P43,000
(d) P76,000
(a) The quarterly income tax of a corporation for any of the first, second or third
quarters is filed, and the tax due is paid, within sixty (60) days after the close of the
quarter.
(b) The annual income tax return of a corporation is filed, and the tax due is paid
on or before the fifteenth day of the fourth month following the close of the taxable
year
(c) There can be an income tax refundable in a quarterly income tax return of a
corporation
(d) There can be an income tax refundable in the final income tax return of a
corporation
Answer: (c)
Answer: (b)
(9) All, except one, of the following, are not subject to the improperly accumulated
earnings tax (IAET). Which is the exception?
Answer: (d)
(10)The following except one, give rise to the presumption that a corporation is
improperly accumulating profits. Identify the exception:
(c) The corporation permits its profit to accumulate beyond the reasonable needs
of the business
Answer: (d)
(11)Angry Birds Inc., a domestic corporation, had the following selected data for
2009, the accumulated earnings for which year the Bureau of Internal Revenue (BIR)
considered to be improper:
(12)A mother corporation is abroad, with business in the Philippines through its
branch in the Philippines. Which of the following statements is wrong?
(a) In a year, the branch in the Philippines is subject to a profit remittance tax on
its remittance of profits to the mother company abroad, even if the profits from
which the remittance was made was a prior years profits.
(b) The profit remittance tax is fifteen (15%) percent of the total amount or profit
for remittance, as applied for with the bank.
(c) The bank with which the application for remittance was filed would be the
withholding agent of the Bureau of Internal Revenue
(d) Even activities registered with the Philippine Economic Zone Authority (PEZA),
from the profits from which the remittance is applied for, will be subject to the profit
remittance tax.
Answer: (d)
Answer: (a)
Statement 2: The Government Service Insurance System and the Social Security
System are subject to income tax.
Answer: (c)
(15)Corporations exempt from income tax are enumerated under Section 30 of the
National Internal Revenue Code.
Statement 1: They are not subject to income tax on income received which are
incidental or necessarily connected with the purposes for which they were
organized and are operating.
Statement 2: They are subject to income tax on income of whatever kind and
character from any of their properties, real or personal, or from any activity
conducted for profit, regardless of the disposition of such income.
Answer: (a)
(d) Joint venture or consortium for engaging in energy operations under a service
contract with the government.
Answer: (a)
(18)Using the information on question 17, what is the income tax due of Temple Run
Company:
(19)Using the information on question 17, what is the net taxable income of Mr.
Temple:
Answer: (c)
(20)Using the information on question 17, what is the net taxable income of Mr. Run:
Answer: (c)
(21)Zombie Tsunami Corp., a domestic corporation, is engaged in
architectural design services. The following are pertinent data:
Deductions 1,000,000.00
The Optional Corporate Income Tax or Gross Income Tax of Zombie Tsunami is:
(22)Candy Crush Inc., a domestic corporation has the following data in 2013:
Answer: (a)
(23)Using the same information on question 22, the Optional Corporate Income Tax
of Candy Crush assuming it is a service business:
Answer: (b)
(24)In 2006, Skater Boy Corporation, a resident foreign corporation, was on its sixth
year of operation. The following data pertain to its operation in the Philippines for
the years 2006 and 2007:
The regular corporate income tax for 2006 is:
(a) P6,000
(b) P12,000
(c) P14,000
(d) P15,000
Answer: (a)
(a) P6,000
(b) P12,000
(c) P14,000
(d) P15,000
Answer: (b)
(a) P6,000
(b) P12,000
(c) P14,000
(d) P15,000
Answer: (c)
(a) P6,000
(b) P12,000
(c) P14,000
(d) P15,000
Answer: (d)
(b) It is not necessary for the purpose of the business considering all the
circumstances of the case
Answer: (b)
Answer: (d)
Answer: (a)
(a) For purposes of the MCIT, the taxable year in which business operations
commenced shall be the year in which the domestic corporation registered with the
BIR.
(b) Firms which were registered with BIR in 1994 and earlier years shall be covered
by the MCIT beginning January 1, 1998.
(c) Firms which were registered with the BIR in any month in 1998 shall be
covered by the MCIT in 2002 after the lapse of three (3) calendar years from 1998.
Answer: (d)
(c) Depository banks under the Expanded Foreign Currency Deposit System
(FCDS) on income from foreign currency transactions with the local commercial
banks.
(d) Firms that are taxed under a special income tax regime
Answer: (f)
(33)Which of the following need not be deducted from gross sales to arrive at gross
income for purposes of computing MCIT of a merchandising/ manufacturing
concern?
Answer: (d)
(34)Which of the following need not be deducted from gross sales to arrive at gross
income for purposes of computing MCIT of a service concern?
Answer: (d)
(35)Which of the following need not be deducted from gross sales to arrive at gross
income for purposes of computing OCIT or GIT of a merchandising/ manufacturing
concern?
Answer: (d)
(36)Which of the following need not be deducted from gross sales to arrive at gross
income for purposes of computing OCIT or GIT of a service concern?
Answer: (c)
Answer: (b)
Expenses 3,000,000.00
Other income
Additional information:
Cut the rope Corporation, a domestic corporation, was registered with the BIR in
1997. The following data on income taxes during the years 2004 to 2011 were made
available.
Answer: (b)
Answer: (b)
Answer: (d)
Answer: (b)
Answer: (b)
(45)Bubble Blast Company, a domestic corporation, has the following income taxes
computation for the year 2013 as follows:
MCIT - P12,000
Answer: (a)
(46)A tax imposed whether a corporation has zero or negative taxable income or
whenever the minimum income tax is greater than the normal income tax due from
such corporation:
Answer: (d)
(47)A corporation which was registered with the Bureau of Internal Revenue in May
2007 shall be covered by MCIT in:
Answer: (d)
(48)The BIR form used by corporations to file quarterly income tax returns:
Answer: (b)
(49)The BIR form used by corporations to file its annual income tax return:
Answer: (a)
(50)According to tax code, the last payment of filing income tax returns for all
corporations having calendar year or fiscal year of reporting is:
(c) Every April 15 immediately following the taxable year for all corporations
having calendar year and fiscal year of reporting
(d) On the 15th day of the fourth (4th) month immediately following the taxable
year
Answer: (d)