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I. TRUE OR FALSE. ANALYZE the following statements and write TRUE if the statement is correct and write FALSE if it
is wrong. AVOID ERASURES.
________1. A small business enterprise with gross receipts of not exceeding P1.5 million may be taxed at 12% (VAT) or 3%
(Non-VAT) at the option of the taxpayer.
________3. A radio station with an annual gross receipts of P2,000,000 but voluntarily subjects itself to VAT can never cancel
its registration and revert back to Franchise Tax even it later on decides to abandon VAT.
________4. Taxpayers which are subject to Other Percentage Taxes are generally required to file its tax return within 20 days
after the end of each month.
________5. The sale of listed and traded shares of stocks after the initial public offering is exempt from business tax.
________6. The gross sales of a bar inside a passenger ship is subject to Amusement Tax of 18%
________7. Service charge which nightclubs collect from their customers, and represented as charges in lieu of cash tip to the
employees are included in the term gross receipts which are subject to Amusement Tax
________8. If there are vending machines installed by Coca-cola inside the premises of race tracks, the sales effected in the
vending machines shall be subject to Amusement Tax of 30%.
________9. The gross receipts of a bank which operates a canteen where foods are served at subsidized prices exclusively to
its employees is subject to Tax on Banks notwithstanding the fact that the canteen is operated on a non-profit
basis.
________10. A private carrier which undertakes to deliver goods at a particular place without being bound in law to undertake
such transportation and does not bind himself out to the public is subject to 3% Common Carriers Tax.
________11. The filing of quarterly income tax returns and payment of quarterly income tax by corporations are mere
instalments and therefore, not the basis in computing the 2 year prescriptive period for refund.
________12. If the tax has been withheld from source (withholding on wages), the prescriptive period for refund is counted
from the date it falls due at the end of the taxable year.
________13. The power of the Commissioner of Internal Revenue to inquire into the bank deposits of the taxpayer is in conflict
with the Secrecy of Bank Deposits Law.
________14. The Commissioner of Internal Revenue may authorize an examiner to inquire into the bank deposits of a taxpayer
who is suspected to have committed fraud in declaring his income.
________15. The decision of one division of the Court of Tax Appeals may be reviewed on appeal by the court en banc.
________16. The Court of Tax Appeals is inferior to the Court of Appeals but it is in the same level with the Supreme Court.
________17. When the justices of the Court of Tax Appeals sit in two (2) divisions, each division shall be composed if three (3)
justices; the presence of two (2) will constitute a quorum and the vote of the two are required to render a decision.
________18. When the justices of the Court of Tax Appeals sit en banc, the presence of four (4) constitute a quorum and the
vote of four (4) justices are required to render a decision.
________19. Ambassadors of foreign countries are required to pay the community tax
________20. If a person loses the benefit of exemption on June 20 of the current year, he shall be liable for the community tax
on that same day.
________21. Resident aliens are exempt from the payment of community tax
________22. The provisions of law governing the imposition of community tax is found in the National Internal Revenue Code
(NIRC)
________23. For purposes of community tax, a general professional partnership is taxable as a corporation
________24. Aliens who have stayed in the Philippines most of the time during the taxable year are required to pay community
tax in the Philippines.
________25. Barangay treasurers can be deputized to collect the community tax in their respective jurisdictions.
MULTIPLE CHOICE. EVALUATE each statement and the choices, then, APPLY your knowledge by selecting the best
answer and write the letter only on the space provided before each number. AVOID ERASURES.
A. Establishments whose annual gross sales or receipts exceed P1,500,000 and who are VAT registered
B. Businesses whose annual gross receipts or sales exceed P1,500,000 and who are not VAT registered
C. VAT registered establishments whose annual gross receipts do not exceed P1,500,000
D. Establishments whose annual gross sales do not exceed P1,500,000 and who are not VAT registered
________2. Rustic owns a small eatery near a trimobile parking area. Its annual gross receipts range from P400,000 to
P450,000. In January, the gross receipts amounted to P27,500 while purchases of goods subject to VAT is
P6,000 and not subject to VAT, P13,000. If Rustico is not a VAT registered taxpayer, his percentage tax due for
the month is -
A. 12,000 C. 825
B. 1,900 D. 2,500
________3. Using the data in No. 2, assume that Rustico is a VAT registered taxpayer and the amounts indicated are
exclusive of VAT, the value added tax due is
A. 12,000 C. 2,580
B. 1,900 D. 2,500
________4. Malakas Wesley owns two passenger buses. Each bus has a seating capacity of 45 passengers. The buses only
ply route Naga City to Legaspi City, and vice versa. During the month, he decided to stop the operation of one
unit to undergo two weeks engine overhaul. Thus, his total gross receipts during the month amounted to
P110,000 only. Malakas Wesley is -
________5. The franchise tax on grantees of radio and television broadcasting companies whose annual gross receipts in
any year do not exceed P10,000,000 shall be
________6. Junjun M. operates the Peacock Nightclub along Avenida Avenue, Manila. His gross receipts in February 2016
amounted to P126,700. The foods and drinks being served inside the night club are being delivered by Tiberio,
a non-VAT taxpayer. During the month, Tiberio sold P32,400 worth of goods and drinks to Junjun M. The
amusement tax payable is -
A. 19,005 C. 28,638
B. 22,806 D. 5,832
A. of 1% stock transaction tax on shares traded through the local stock exchange
B. 10%-20% tax on shares not traded through the local stock exchange
C. 10% stock overseas communications tax
D. 3% tax on keepers of garage
________8. Bayanis ticket (daily double) won P42,000, gross of withholding tax and cost of ticket, in a horse race in San
Lazaro Hippodrome. His ticket had cost him P250. How much tax was withheld on winnings in horse races by
Bayani?
A. 1,680 C. 1,670
B. 4,200 D. 4,175
________9. The income tax returns must be filed in
A. Duplicate C. Triplicate
B. Quadruplicate D. Quintuplicate
________10. A notice to the effect that the amount therein stated is due from a taxpayer as a tax with a demand for payment
of the same within the stated period of time
________12. Before a formal notice of Assessment is issued, the taxpayer is required to respond to the Preliminary
Assessment Notice within a period of -
A. 30days C. 45 days
B. 15 days D. 6 months
________13. Where a return was filed, as a general rule, the prescriptive period for assessment after the date the return was
due or was filed, whichever is later, is within
________14. Bernadette filed her 2005 Income Tax Return and paid the tax due thereon on April 1,2006. The last day for the
Bureau of Internal Revenue to send an assessment is
________15. Mr. Lacson filed an income tax return for the calendar year 2005 on March 10, 2006. The BIR assessed a
deficiency income tax on April 10, 2008. When is the last day for the BIR to make an assessment?
________16. Cosa filed a fraudulent income tax return for the year 2005 on April 11, 2006. The Bureau of Internal Revenue
(BIR) discovered the fraud on February 20, 2007. The last day for the BIR to collect or send an assessment
notice is
________17. Which of the following is not an extrajudicial remedy of the government against the taxpayer?
________18. The seizure by the government of real property and interest on rights to property of the taxpayer to enforce the
payment of taxes followed by its public sale
A. Confiscation C. Forfeiture
B. Distraint D. Levy
________19. The summary of remedies of distraint of personal property shall be exercised by the Commissioner of Internal
Revenue of the amount involved is in excess of -
A. 10,000 C. 1,000,000
B. 100,000 D. 10,000,000
________20. Cruzada filed an income tax return for the calendar year 2004 on March 10, 2005.the BIR issued a deficiency
income tax on April 10, 2007 which has become final. When is the last day for the BIR to collect?
________22. For filing a false and fraudulent return, a surcharge is imposed. Which of the following is correct?
________23. A contract whereby the taxpayer and the government by reciprocal concessions avoid litigation or put an end to
one already commenced -
A. Confiscation C. Distraint
B. Compromise D. Suspension of action
________26. This is not within the power of the Commissioner of the Internal Revenue to make an assessment
________27. The power to interpret the provisions of the National Internal Revenue Code shall be under the exclusive and
original jurisdiction of the
________29. The Commissioner of Internal Revenue or his authorized representative may order suspension or closure of a
business establishment for a period of not less than 5 days for any of the following violations, except:
A. P5.00 C. P10.00
B. P1.00 D. None
________33. Salariosa, a resident of Cubao, Quezon City, single owns a restaurant in CM Recto
Ave., Manila and in Cubao, Quezon City. In 2015, it had the following data:
For 2016, the total basic and additional community tax payable by Salariosa is -
A. 7,074 C. 1,363
B. 7,679 D. 5,005
________34. Using the information in No.33, the community tax for 2016 is payable on or before
________35. Using information from No. 33, if the tax is paid on April 30, 2016, the amount payable is
A. 5,205.20 C. 5,405.40
B. 6,206.20 D. Cannot be determined
Good Luck!!
Nikki G. Estores, CPA, MBA
Key Answers:
1. True
2. False
3. True
4. True
5. False
6. False
7. False
8. False
9. False
10. False
11. True
12. True
13. False
14. False
15. True
16. False
17. True
18. True
19. False
20. True
21. False
22. False
23. False
24. True
25. True
True or false:
1-10 other percentage tax
11 to 12 remedies
13 to 18 BIR and CTA
19 to 25 Community Tax
MC
1-8 other percentage taxes
9-23 remedies
24-30 BIR and CTA
31-35 community tax