Rfbt1 Oblico Lecture Notes

43.
The deductible funeral expenses is:
a. P350,000 c. P500,000
b. P100,000 d. P200,000
44. The vanishing deduction is:
a. P460,000 c. P92,000
B.P184,000 d. P138,000
45. The deduction for family home is:
a. P3,000,000 c. P1,000,000
b. P1,500,000 d. P500,000
46. The deductible medical expenses is:
a. P600,000 c. P500,000
b. P300,000 d. 250,000
47. The taxable net estate is:
a. P4,808,000 c. P3,808,000
b. P4,908,000 d. P3,908,000
48. Estate tax credit for foreign estate tax paid is available to the estate of:
a. Resident or citizen of the Philippines
b. Non-resident alien
c. All kinds of decedents
d. None of these
49.
Philippines Foreign
Gross estate P6,000,000 P4,000,000
Claims against the estate 1,000,000 1,000,000
How much was the Philippine estate tax due if the decedent was a non-resident, not
citizen of the Philippines, and there was a foreign estate tax payment of P400,000?
a. P0 c.P571,875
b. P515,000 d. P443,000
50. The estate tax return should be accompanied by a certificate of an independent

CPA if the gross estate is:
a. P2,000,000 c. Over P2,000,000
b. P2,000,000 or over d. P50,000 or over
51. Which of the following statements is false? When an estate tax return had been
filed and the estate tax had been paid but subsequently, because of errors in the
return, a deficiency estate tax has to be paid:
a. The Bureau of Internal Revenue can ask payment from the heirs to whom the
estate had been distributed.
b. The Bureau of Internal Revenue cannot ask the executor or administrator
administrator to
pay because he would have been discharged from liability for the estate tax to the
heirs once the estate tax had been paid.
c. The Bureau of Internal Revenue can still ask the executor or administrator to
pay, even if the heirs have dissipated the inheritance, if the executor or administrator
did not ask for a written discharge from liability
liability from the Bureau of Internal Revenue .
d. The Bureau of Internal Reveneu shall have a lien on the properties of the
estate once a demand for payment had been made.
52. When a donation which paid a donor’s tax was actually a donation mortis causa,
as ascertained by the Bureau of Internal Revenue, which of the following is true?
a. The donation shall be required to pay the estate tax on its proper valuation
valuation at
the time of death, and there can be a refund for the wrong payment of the donor’s tax.
b. The donation shall be required to pay the estate tax so that the estate tax
computed shall be reduced by the donor’s tax already
alr eady paid.
c. The donation shall not pay any transfer tax anymore.
d. The donation has to pay the estate tax in addition to the donor’s tax
previously paid.
53. Taxpayer died February 2, 2013. No judicial proceedings were instituted for the
settlement of his estate. Return was filed and tax of P20,000 was paid November 2,
2013. The estate tax due, including increments,
increments, as of November 2, 2013 is:
a. P26,000 c.P31,000
b. P26,250 d. P31,500
------------------------end-------------------------
TAX. M- 1402 Donor’s Tax
Problem 1
Ara gave the following properties to various donees on December 25, 2012:
House and lot in London P3,500,000
Apartment house in Naga City 8,000,000
Car in Iriga City 520,000
Car in London 900,000
Savings deposit with BPI 50,000
Time deposit
deposit in a New York Bank 120,000
Accounts receivable, debtor residing in the Philippines 140,000
Accounts receivable, debtor residing in Hongkong 35,000
Franchise exercised in New York 225,000
Franchise exercised in Philippines 120,000
Investment in Good Time Co., partnership established in Hongkong 160,000
Investment in Lovers Company, partnership established in the Phil’s. 125,000
1. The gross gift if Ara is a resident or citizen
a. P13,895,000 c. P8,520,000
b. P8,955,000 d. none
2. The gross gift if Ara is a resident and citizen of united states (without reciprocity).
reciprocity).
a.13,895,000 c. 8,520,000
b. 8,955,000 d. None
3. The gross gift if Ara is a resident and citizen of the donor as diminution on the
property donated.
a.13,895,000 c. 8,520,000
b. 8,955,000 d. None
Problem 2
Anacleto gave the following donations to:
02-14-12 — Azucena,
Azucena, legitimate daughter on account of marriage last December 31,
2010 — P190
P190 ,000.
06-01-12 — Brusco,
Brusco, brother on account of marriage scheduled December 31, 2011 —
2011 —
P160,000.
10-13-12 — Carizosa,
Carizosa, legitimate daughter, on account of marriage on November 12,
2011 — P180,000
P180,000
05-15-13 — Dalmacio,
Dalmacio, father, on account of marriage, land with a fair market value of
P1,000,000 but mortgage for P100,000 which was assumed by the donee.
4. The gift tax payable on February 14, 2012
a. 190,000 c. 2,000
b. 1,800 d. 200,000
5. The gift tax payable

payable on June 1, 2012
a. 6,200 c. 1,200
b. 8,000 d. 350,000

payable on October 13, 2012
a. 15,200 c. 7,800
b. 15,800 d. 7,200

payable on May 15, 2013
a. 900,000 c. 44,000
b. 1,000,000 d.38,000
Problem 3
Mr. and Mrs. Alavado gave the following donations:
May 3, 2013 -Conjugal property valued at P300,000 donated to Barumbado,

legitimate son who got married January 1, 2013.
July 14, 2013 -Capital property donated

donated to Carlota,
Carlota, legitimate
legitimate daughter
daughter who got
married June 1, 2013. Value –
Value – P500,000.
P500,000.
Dec. 30, 2013 -Conjugal property donated to Carlota. The dowry has fair market
value of P800,000
8. The gift tax due of Mrs. Alavado on May 3, 2013
a. 1,000 c. 800
b. 5,600 d. 6,000
9. The gift tax due of Mr. Alavado on July 14, 2013.
a. 21,800 c. 12,600
b. 21,000 d. 6,400
10. The gift tax due of Mrs. Alavado on December 30, 2013
a. 15,000 c. 8,200
b. 9,000 d. 15,800
Problem 4
Anaconda, resident, gave the following donations:
Donee January 22, 2013

Barbado Legitimate son, on account of graduation –
graduation – P140,000.
P140,000.
Naga City A parcel of land to be used for public purposed –

purposed – P200,000.
P200,000.
Coronado Legitimate child on account of its forthcoming marriage on February 14,

2013 –
2013 – P6,000.
P6,000.
Dimalupig Legitimate daughter, on account of marriage on February 4, 2012. -

P7,000.
March 25, 2013
Barbado On account of marriage on April 10, 2013 –

2013 – P150,000.
P150,000.
Coronado Additional donation on account of marriage Feb. 14, 2013 –

2013 – P69,000.
P69,000.
Dimalupig Additional donation on account of marriage Feb. 4, 2012 –

2012 – P200,000.
P200,000.
Devt. Academy of the Phil’s For education and training purposes, P50,000.
11. The donor’s tax

donor’s tax due on January 22, 2013.
a. 800 c. 140,000
b. 660 d. 6,600
12. The donor’s tax due on March 25, 2013.
a.16,700 c. 9,200
b. 15,900 d. 15,720
Problem 5
Mr. and Mrs. Albano gave the following donations:
July 1, 2013 Community property was donated to Balaoing,

Balaoing, sister of Mr.
Mr.
Albano. The fair market value is P650,000.
Sept. 25, 2013 Cash of P300,000 to Cuarto, son of Mrs. From her teen-age
boyfriend .
Nov.10, 2013 Cash of P250,000 was donated to Balaoing.
13. The donor’s tax due on Mr. and Mrs. Albano on July 1, 2013 –
a. 7,000;7,000 c.97,500;7,000
c.97,500;7, 000
b. 7,000;97,500 d. 97,500;97,500
97,500;97,50 0
14. The donors tax due on Mr. Albano on September 25, 2013 –
2013 –
a. 1,000 c. 45,000
b. 90,000 d. 6,000
15. The donor’s

donor’s tax due on Mr. and Mrs. Albano on November 10 2013, 2013 –
a. 5,000; 37,500 c.37,500;37,500

c.37,500;37, 500
b. 10,000; 5,000 d. 500,500

Problem 6
Arandasi sold the following assets:
Date of Sale Buyer Market Value Selling Price Cost /Book

value
Jewelry June 11 Niece P 130,000 P 15,000 P 100,000
Res. House June 22 Girlfriend 1,000,000 600,000 750,000
Apt. House Sept. 25 Legally adopted child 900,000 600,000 750,000
Del. Truck Oct. 10 Controlled corp. 450,000 400,000 350,000
16. The gift tax, if any, in each of the independent

independent transactions above.
above.
(a) (b) (c) (d)
Jewelry P 300 P 300 P 600 P 600
Residential house 120,000 None 120,000 75,000
Apt. house 6,000 6,000 1,000 1,000
Delivery truck None 15,000 15,000 None
Problem 7
17. Which of the following examples is taxable?
a. A, American citizen donated a parcel of land located in the united State to S,

a resident alien.
b. On June 1, 2013, T made a gift of P200,000 to his daughter on account of

her marriage celebrated on May 1, 2012.
c. U, a minimum wage earner, gives his son a gift worth P2,000 as a birthday
gift.
d. V and W are the only heirs of X. V renounces his share of inheritance in favor
of W
Problem 8
18. Statement 1: As a rule , donations to candidates in local and/or national elections

are not subject to donor’s tax.
Statement 2: Donation to a political party is not subject to donor’s tax if it is

reported by the donor to the Comelec and by the candidate in his Statement of
Expenditures.
a. True; True c. False; False
b. True; False d. False; True
Problem 9
19. One of the following statement is false:
a. Contracts of donation between husband and wife are void in most cases.
b. The donation by the public works contractor to a Mayor, in view of her public
office is void in all cases.
c. Donations between persons guilty of adultery or concubinage are void.
d. Donation to a conceived or unborn children is valid.
Problem 10
20. A, a citizen and resident of the Philippines, made donations on January 10, 2013,
as follows: Donation to B, a legitimate son, on account of marriage, to be celebrated on
February 14, 2013, property in the United States (on which a U.S. donor’s tax of
P1,200 was paid), with a fair market value of Donation to B, cash in the Philippines of
Donor’s tax credit for donor’s tax paid to the U.S.:
a.P1,200 c. P600
b. P1,000 d. P2,000
Problem 11
21. One of the following statements is correct. The donor’s tax return:

tax return:
a. Must be filed within thirty days after the end of the calendar year.
b. Must be filed within thirty days from the date of donation.
c. Must be accompanied by a certificate of an independent Certified public

Accountant if the gross gift is P50,000 or more.
d. In the case of husband and wife making donations, one donor’s tax return
shall be filed and signed by either the husband or the wife.
22. One of the following statements is not true. Which is it? If on any one date there
is a donation by one donor to a donee who is not a stranger together with a donation
to a donee who is a stranger:
a. There will be two separate donor’s tax return because the donor’s tax on the
donation to a non-stranger
non-stranger is at graduated rates while the donor’s tax on the donation
to a stranger is at the flat rate of 30%.
b. There will be one donor’s tax return only, where the donor’s tax at graduated
rates on the donation to a non-stranger
non- stranger will be shown together with the donor’s tax at
the flat rate of 30% on the donation to a stranger, the total being the donor’s tax to
pay.
c. If there were previous donations to strangers during the year, the prior net
gifts to strangers need not be added anymore in the computation
computation of aggregate net gifts,
donor’s tax on aggregate net gifts and donor’s tax due on the donations to strangers.
d. A donation on account of marriage, before the marriage, by a parent to a son

and daughter-in-law shall be considered as donations to a non-stranger and stranger.
23. On March 6, 2013, a Filipino citizen donated house and lot with fair market value
of P200,000 to his child on account of marriage on January 1,2013. Gift tax return
was filed and tax paid on July 5, 2013. The donor’s tax due, including increments, as
of July 5, 2013 is:
a. 2,400 c. 2,600
b. 2,340 d. 1,800
Multiple Choice Questions
1. Which of the following statement is wrong? A distinction between a donation inter

vivos and a donation mortis causa is:
a. The first take effect during the lifetime of the grantor while the second takes
effect after the death of the grantor.
b. The first is subject to the donor’s tax while the second is subject to the estate
tax.
c. The first always requires a public document while the second may not require
a public document.
d. The first is valued at fair market value at the time the property is given while
the second is valued at fair market value at the time of the death of the grantor.
2. The following are the requisites of a donation for purposes of the donor’s tax, except
one:
a. capacity of the donor c. delivery of the subject matter of gift
b. capacity of the donee d. donative intent
3. 1st statement: A sold his car ( cost, P300,000 ) to B for P500,000. The car has a fair
market value of P900,000 at the time of sale. The difference of P400,000 in selling
price and fair market value constitutes a gift subject to donor’s tax.
2nd statement: C purchased a lot and cottage in Alaminos City (home of 100 islands) in
2009 for P1,000,000. It was used as summer vacation house by his family. In 2010, C
decided to sell the lot and cottage to D for P2,000,000 although its present market
value is P2,500,000. The P500,000 difference in selling price and market value is a gift
but not subject to donor’s tax.
a. both statements are true
b. both statements are false
c. The first statement is true and the second statement is false.
d. The first statement is false and the second statement is true.
4. Statement 1: The gross gifts of a donor who is a non-resident alien will include all
properties regardless of location.
Statement 2: The gross gifts of a donor who is a non-resident alien of the Philippines,
will include only property located in the Philippines.
a. both statements are correct
b. both statements are wrong
c. The first statement is correct and the second statement is wrong.
d. The first statement is wrong and the second statement is correct.
5. The reciprocity clause in the donr’s tax

donr’s tax law applies to a:
a. Non-resident citizen c. Resident citizen

b. Resdient alien d. Non-resident alien
6. In the previous question, the reciprocity clause applies to:
a. Real property c. Intangible personal property
b. Tangible personal property d. All of these
7. If he is a resident alien his gross gift is:
a. P2,100,000 c. P2,950,000
b. P1,950,000 d. P3,000,000
8. If he is a non-resident Japanese,
Japanese, and there is reciprocity law, his gross gift is:
a. P850,000 c. P1,050,000
b. P650,000 d. P700,000
9. Which of the following statements is correct? A donation inter vivos by husband and
wife, jointly during the marriage
a. Is a donation of conjugal property that will require one computation of the

donor’s tax, if the spouses are under the system of conjugal partnership
partnership of gains.
b. Is a donation of community property that will require one computation of the

donor’s tax, if the spouses are under the system of absolute community
community of property.
c. Is a donation of exclusive property by the either spouse that will require one
computation of the donor’s tax, if the spouses are under the system of conjugal
partnership of gains.
d. Is a donation of each spouse to the extent of one-half that will require

separate computation for two donor’s
donor’s taxes, under whichever property relationship
exists between the spouses.
10. Situation 1: M, in trading business, had a receivable of P150,000 from N. Without

exerting utmost effort to collect, M canceled
canceled the indebtedness of N.
Situation 2: O sold to P personal property worth P200,000 for a consideration of

P50,000, to take effect immediately upon receipt of the consideration.
consideration.
a. Situation 1 involves a donation of P150,000 and should be covered by a

donor’s tax return within thirty days from the
the date of cancellation of the indebtedness.
b. Situation 1 is bad debt expenses of the business and should not be treated
as involving a taxable donation.
c. Situation 2 shall be considered a bad bargain and not involving a taxable

donation.
d. Situation 2 involves a donation of P200,000 and should be covered by a

donor’s tax return within thirty days from the date of the sale.
11. Q sold his land (capital asset) on September 5, 2012 to his best friend for
P300,000 when the market value was P500,000 He gave a commission of P20,000 to
the broker and spent for documentary stamp taxes and transfer fees the amount of
P4,000. The internal revenue tax payable is:
a. Final capital gain tax of P30,000
b. Final capital gain tax of P18,000

c. Donor’s tax
tax of P60,000
d. None, as it is exempt from any internal revenue taxes
12. Statement 1: In showing gross gifts in the donor’s tax return, buildings should be
valued at the current fair market value as shown in the assessment rolls, or the fair
market value as determined by the Commissioner of Internal Revenue, whichever is
higher.
Statement 2:In showing gross gifts in the donor’s tax return, personal property
should be valued at current fair market value or at cost, whichever is lower.
a. Both statements are correct
b. Both statements are false
13. A donation on account of marriage will gave a donor a deduction from the gross
gifts made if:
a. The donee is a legitimate child c. The donee is not a stranger
b. The donee is anybody d. None of these.
14. Which of the following statements wrong? A deduction for a donation on account
of marriage:
a. Shall be allowed to a resident citizen when the property donated is located

outside the Philippines.
b. Shall be allowed to a resident citizen when the property donated is located

within the Philippines.
c. Shall be allowed to a resident alien when the property donated is located

outside the Philippines.
d. Shall be allowed to a resident alien when the property donated is located

within the Philippines.
15. All of the following statements are wrong, except one. If the donor is a nonresident,
not citizen of the Philippines:
a. Property situated abroad but donated to a citizen of the Philippines will pay
the donor’s tax.
b. Property situated in the Philippines but donated to a donee aboard will not
pay the donor’s tax.
c. Property outside the Philippines donated on account of marriage to a resident

of the Philippines has a deduction of P10,000.
d. Property in the Philippines with a value of P150,000 donated to a citizen of

the Philippines will pay a donor’s tax.
16. Husband and wife made out of conjugal cash of P1,000,000, a donation on
account of marriage, to a legitimate child. Which of the following statements is not
correct on deduction for donation on account of marriage?
a. P10,000 to each spouse, on separate computation for donor’s tax.
b. P5,000 to each spouse, on separate computation for donor’s tax.
c. P10,000 on a separate computation for donor’s tax of the husband.

d. P10,000 on a separate computation for donor’s tax of the wife.
17. On a contribution to the Roman Catholic Church by an individual, which of the

following correctly state/s true rule/s in computing the donor’s tax.
a. There is no deduction from the gross gift.
b. It is not considered a gift on which there will be a donor’s tax.
c. It is considered a gross gift and a deduction from the gross gift.
d. It pays the donor’s tax at the time of the contribution

contribution at the graduated rates
of donor’s tax.
18. Since a donation to a charitable institution has a deduction without any ceiling.
Statement 1: The net gift will be zero, so that in computing the donor’s tax, the
donation may be omitted in gross gift if it is likewise omitted in deductions.
Statement 2: The gross gifts should be reported and the deduction shall be
claimed.
a. Both statements are correct.
b. Both statements are wrong.
19. Which of the following donations is not entitled to deduction?

deduction?
a. Donation to charitable institution
b. Donation to scientific
scientific organization
c. Donation to social welfare
d. Donation to a political party
20. R donated a total amount of P500,000, ½ to the Quezon City Hall and ½ to a
charitable institution, TAHANANG WALANG HAGDANAN. Upon inquiry, it was verified
that the charitable institution’s total receipts from donation amounted to P10M and its
total administrative expenses reached P4.0M. R can claim a total
deduction/exemption of:
a. P250,000 c. P200,000
b. P500,000 d. None
21. All of the following except

except one are exempt from gift tax under special laws:
laws:
a. Donation to Integrated Bar of the Philippines
b. Donation to Development Academy of the Philippines
c. Donation to Philippine Institute of Certified Public Accountants
d. Donation to International Rice Research Institute
22. First distinction: The rates for donor’s tax are lower than those for estate tax, in all
cases.
Second distinction:
distinction: In donor’s
donor’s tax, the exemption is P200,000
P200,000 while in estate tax it is
P100,000.
a. Both distinction are correct c. First is correct, second is wrong

b. Both distinction are wrong d. First is wrong, second is correct
23. Which statement is wrong? The donor’s tax:
a. Is computed on the basis of the net gifts of a calendar year.
b. Is computed and paid within 30 days from the date of donation.
c. Is computed separately for each spouse in case of a joint donation.
d. Become proportionately bigger on later donations.
24. Statement 1: All gifts made on the same date pay one donor’s tax only.
Statement 2: A donation to a legitimate child on account of marriage, when the

property donated was already delivered, will not pay the donor’s tax if the donee’s
marriage did not actually take place.
a. Both statements are true.
b. Both statements are false.
25. In computing
computing the donor’s tax on a subsequent donation, the donor must also
consider:
a. All prior net gifts during his lifetime.
b. All prior net gifts during the calendar year.
c. The present and the immediately preceding donation.
d. Only the present donation.
26. Donations on one date by H, a father, of property and cash, as follows: To I, a

legitimate daughter, on account of marriage, land with a fair market value of P500,000
but subject to mortgage of P100,000 which is assumed by I. to J, a legitimate son, on
account of marriage, cash of P200,000. The net gifts made are:
a. P680,000 c. P590,000
b. P580,000 d. P700,000
27. Who of the following is a stranger under the donor’s tax law?
a. A child of a brother c. A granduncle
b. A grandchild d. A second cousin
28. For donor’s tax purposes, one of the following is not stranger.
a. son by a natural adoption c. grandson
b. step-son d. son-in-law
29. One of the following is n`ot a relative by consanguinity n the collateral line within
the fourth degree of relationship.
relationship.
a. daughter of the donor’s nephew c. niece of the donor
b. First cousin of the donor d. second cousin of the donor
30. Statement 1: A donation to a corporation is a donation to a stranger.

Statement 2: a donation by one spouse to the legitimate child by a former marriage of
the other spouse is a donation to a stranger.
a. both statements are true
b. both statements are false
31. Which of the following statement is wrong? A donation by husband and wife out of
conjugal or community
community property to a brother of the wife.
a. Is one-half a donation to a non-stranger by the wife.
b. Is one-half a donation to a stranger by the husband.
c. Is a donation on which the husband must pay a donor’s tax of 30% on his
net gift.
d. Is a donation on which the husband must pay the graduated donor’s tax on
his net gift.
32. When the donee or beneficiary is a stranger, the tax payable by the donor shall be.
a. 30% of the gross profits.
b. 30% of the net profits.
c. Based on the graduated rates with the first P100,000 net gift exempt.
d. Based on the graduated rates with the first P100,000 net gift exempt or 30%
of the net gifts whichever
whichever is higher.
33. N made a donation to O and P, son and daughter-in-law, on account of marriage,

of real property with fair market value of P 1,500,000, but subject to a mortgage of
P300,000 which was assumed by the donees.
The total
total donor’s tax is:
a. 77,750 c. 185,950
b. 84,950 d. 199,400
Questions 34 through 37 are based on the following data:
Mr. and Mrs. K, made the following donations.
1/25/2013 -To L, their legitimate son, on account of marriage last 1/20/2012, car
worth P400,000, with P200,000 mortgage, ½ was assumed by the one.
5/31/2013 -to M, brother of Mr. K, his capital property worth P200,000 on
account of marriage 6 months ago of M with a condition that the one
will pay the donor’s tax thereon.
7/15/2013 -To N, daughter of Mrs. K by former marriage, on account of her
marriage 12 months
months ago, Mrs. K’s paraphernal
paraphernal property worth
P100,000.
8/20/2013 -To N on account of the same marriage, conjugal car of the couple
worth P400,000, with P200,000 unpaid mortgage, ½ assumed by N.
And P500,000 worth of land to their four sons on account of their
graduation, 20% of which was owned by their Kumpadre who agreed
to donate his share thru a public document.
34. The gift tax due of Mr. K as of May 31, 2013 is:
a. 8,000 c. 7,200
b. 7,000 d. 6,600
35. The gift tax due of Mrs. K as of July 15, 2013 is:
a. 3,600 c. 2,800
b. 2,600 d. 4,000
36. The gift taxes due of Mr. & Mrs. K on Aug. 20, 2013 are
a. P69,000 & P18,800, respectively
b. P17,000 & P18,800, respectively
c. P54,000 & P15,800, respectively
d. P54,000 & P18,800, respectively
37. The gift tax due of their Kumpadre is:
a. P30,000 c. P45,000
b. P10,000 d. none
Items 38 through 41 are based on the following information:
Q a citizen of the Philippines made the following donations in 2013:
01/10/2013 : To R, a legitimate daughter, on account of marriage cash of

P200,000.
05/10/2013 : To S, a legitimate son, on account of mortgage, property with a fair
market value of P200,000 and a mortgage thereon, which was
assumed by S, of P40,000.
10/10/2013 : To T, a friend, an ordinary donation of P10,000.
12/10/2013 : To U, a niece, a donation on account of marriage of P 15,000.
38. The donor’s tax on the donation of January 10, 2013:
a. P150 c. P 900
b. P600 d. P1,800
39. The donor’s tax on the

on the donation of May 10,2013:
a. P5,750 c. P4,500
b. P24,000 d. P5,800
40. The donor’s tax on the donation of October 10,2013:
a. P1,000 c. P6,250
b. P3,000 d. P6,150
41. The donor’s tax on the donation of December 10,2013:
a. P1,350 c. P6,500
b. P2,450 d. P600
42. Statement 1. Tax credit for donor’s tax

tax paid to foreign
foreign country is
is allowed
allowed only if the
donor is a citizen or resident of the Philippines:
Statement 2. There can be a donor’s tax paid to a foreign country

country even if the
the citizen
or resident donor had no donation of property in the Philippines.

43. Donations to a legitimate child of:
Property in the Philippines P110,000

Property outside the Philippines,
Philippines, on account
account of marriage 200,000
Donor’s tax paid to foreign country 4,500
Donor’s tax due after tax credit for foreign donor’s tax paid:
a. P2,200.00 c. P4,625.50
b. 2,750.00 d. P3,208.33
Questions 44 and 45 are based on the following data:
Mr. O, made the following donations for the year 2013:
April 15 - To P, legally adopted child on account of marriage last week, car

worth P710,000 in the Philippines.
- To Q, his daughter, car in USA worth P300,000. They paid $180
donor’s tax in US. ($1-P56)
($1-P56)
July 20 - To R niece
niece in manila,
manila, P200,000 worth of personal
personal property.
property.
- To S, legitimate daughter on account marriage in Cebu, last July 18,
18,
2012, car worth P400,000 but mortgage for P200,000, ½ of which
was assumed by the donee.
44. The gift tax due after tax credit on April 15, 2013 is:
a. P30,800 c. P44,000
b. P35,000 d. P33,920
45. The gift tax due on July 20,2013 is:
a. P 40,000 c. P84,000
b. P36,400 d. P38,920
46. L, a citizen and resident of the Philippines, made the following donations on
January 14, 2013: To M, M, a legitimate
legitimate child, on account of marriage on the same day,
day,
property in Japan, which paid the Japanese government a donor’s tax of P52,000 and
with a fair market value of P610,000
To N, a friend,
friend, ordinary
ordinary donation of property in the Philippines,
Philippines, subject
subject to a mortgage
mortgage
of P60,000 which was assumed by N. Fair market value of the property, 160,000
The tax credit

credit for foreign donor’s tax paid is:
a. P34,628.06 c. P42,857.14
b. P52,000.00 d. P31,520.43
47. Mr. O made the following gifts to his relatives:
Phil. USA UK Italy
Gross gift P750,000 P500,000 P250,000 P500,000
Deductions
Deductions 250,000 200,000 150,000 150,000
Tax paid 25,000 12,000 10,000

The gift tax due after
after credit is:
a. P35,600 c. P33,520
b. 25,600 d. P39,000
48. Mr. P is a citizen and resident of the Philippines. On July 8, 2013, he made
donations to Q, a friend, of properties in Country Y and Country Z. Donor’s taxes were
paid to country to Country Y and a fair market value of P300,000 while the property in
Country Z had a fair market value of P200,000. The donor’s tax still due after credit
for foreign donor’s taxes paid is:
a. P0 c. P145,000
b. P15,000 d. P10,000
49. On one date, a resident alien donor made donations of property in the Philippines
to a non-stranger and of property outside the Philippines to a stranger. In taking a
credit for the foreign donor’s tax paid, the credit shall be against the Philippine donor’s
tax on the:
a. Donation to the non-stranger.
b. Donation to the stranger.
c. Donation to the non-stranger plus that to the stranger.
d. None of these.
50. One of the following statements is correct. Which is it? In the preparation of the
donor’s tax return.
a. Dowries are shown as deductions from the gross gifts.
b. Dowries are not shown anymore as gross gifts and as deductions.
c. Spouses making donations of conjugal or community property prepare one

donor’s tax return.
d. Donor’s tax on donations to strangers and

strangers and to non-strangers are computed
and shown in separate return.
51. One of the statements that follow is correct. Which is it? A deed of donation was
executed by G, resident of Dagupan City, in favor of H, a resident of Baguio City. H
executed a deed of acceptance
acceptance in Baguio City. The donor’s tax return must be filed
with the Bureau of Internal Revenue
Revenue Office:
a. At the resident of the donor.
b. At the resident of the donee.
c. At the resident of the donor or the 19one, whichever the donor chooses.
d. None of the above.
52. Statement 1. A donation on which the donor’s tax was not paid is not a valid
donation.
Statement 2 . Title to the donated real property cannot be transferred to the donee
in the Register of Deeds unless the donor’ s tax on the donation had been paid.

53. One of the following

following statements is wrong:
a. The Commissioner is not allowed to grant extension of time within which the
donor’s tax returns may be filed, and such extension shall not exceed thirty days.
b. The return may be filed in one municipality and the tax paid in another
municipality.
c. When donor’s tax is assessed by reason of negligence, intentional disregard of

rules and regulations,
regulations, or fraud on the part of the taxpayer, no extension of time for
payment of the tax may be granted by the Commissioner of Internal Revenue.
d. A gross gift of P50,000 for the whole year to non-strangers need not be
covered by a donor’s tax return.
54. Statement 1: When a donor’s tax return was filed and it was found by the Bureau
of Internal Revenue to have errors which gave rise to a deficiency donor’s tax, the
donor may be required to pay the deficiency although he does not possess or own the
property anymore.
Statement 2 : The Government is not bound by any agreement between the donor
and the done that the latter shall pay tax on
o n the donation.
a. Both statements are correct.
b. Both statements are wrong.

TAX.M-1403 VALUE ADDED TAX
Problem 1
Topline Company sold to Bestbooks Enterprises goods worth P 10 000, exclusive of tax. Record
the accounting entries in the sales book and in the purchase book if:
1. The buyer and the seller are subject to VAT.

2. Seller is VAT registered, while buyer is not.
3. Seller is no VAT registered, while buyer is VAT registered.
Answer:
Sales book Purchase book

1. Cash/ accounts receivable P 11 200 Purchases P 10 000
Sales 10 000 Input tax 1 200
Output Tax 1 200 Cash 11 200
2. Cash/ accounts receivable P 11 200 Purchases P 11,200
Sales 10 000 Cash 11 200
Output Tax 1 200
3. Cash/ accounts receivable P 10 000 Purchases P 10 000
Sales 10 000 Cash 10 000
Problem 2
All amounts given are total invoice costs/prices:
A, non-VAT taxpayer, sells to B, VAT taxpayer P 67 200

200
B, VAT taxpayer, sells to C, VAT taxpayer 100 800
C, VAT taxpayer, sells to D, VAT taxpayer, an exporter 168 000
D, VAT taxpayer, exports 300 000
1. The value-added tax of B:

A. Payable of P 3 600 C. Payable of P 10 080
B. Payable of P 10 800 D. Payable of P 12 096
2. The value-added tax of C:
B. Payable of P 6 720 D. Refundable of P 10 900
3. The value-added tax of D:
B. Refundable of P 18 000 D. Refundable of P 36 000
Problem 3
H and W, husband and wife had the following gross sales (net of tax) during the year:
W- restaurant owner P 800 000

H-
a. Professional CPA P 350 000
b. Medium sized store:
Sale of office/school supplies P 1 120 000
Sale of books P 275 000
4. Which of the following statements is true?

A. For purposes of the threshold of P 1 919 500, the gross receipts of the husband and
wife shall be combined.
B. The gross receipts shall be subject to VAT even if she does not register voluntarily
under the VAT system.
C. For purposes of the threshold of P 1 919 500, the sale of office supplies and the
practice of profession are considered as separate taxpayers.
D. For purposes of the threshold of P 1 919 500, the aggregation rule for each taxpayer
shall apply. Thus, the gross receipts from the medium sized store shall be added to the
receipts from the practice of profession.
Problem 4
5. Winery is a manufacturer of wine. During a particular calendar quarter, it had the

following transactions (net of VAT):
Jan. 4, 2013 : Consigned wine to a retailer in Makati City amounting to P 200 000.
Feb. 14, 2013 : Exported P 1 000 000 worth of wine to Spain.
Feb. 27, 2013 : President of Winery celebrated his birthday, consuming P 50 000
worth of wine given to him by the company as a birthday gift.
Mar. 20, 2013 : Declared property dividend of one case of winewine for every 10 shares,
amounting to P 150 000.
The output tax for the calendar quarter ended March 31, 2013 is:
A. P 48 000 C. P 140 000
B. P 168 000 D. P 40 000
Problem 5
Farmland Merchandising became subject to VAT effective January 1, 2013:

The following are its records:
Gross sales- January 1 to Dec. 31, 2012 P 2 900 000

January 2013 data:
January 1 inventory:
Purchased from VAT registered persons 48 000
Purchased from non-VAT registered persons 332 000
Actual VAT paid 5 140
Sales (total invoice amount) 224 000
Purchases (exclusive of VAT) 60 000
6. The VAT payable on January 2013 is -

A. P 11 660 C. P 16 400
B. P 9 200 D. None
Problem 6
Azucarera de Papa is a processor of refined sugar. It purchases sugarcane from farmers for
processing into intermediate stages until it becomes refined
refined sugar. In a month, it had the
following sales and purchases, no tax included:
Sales P 880 000

Purchases of sugarcane 220 000
Purchases of containers and paper labels 100 000
7. The value-added tax payable is:

A. P 67 200 C. P 84 800
B. P 89 200 D. P 69 200
Problem 7
8. In a month, total invoice prices/costs:

Domestic sales P 672 000
Export sales 1 500 000
Purchases from VAT-registered persons of:
Goods exported 560 000
Goods sold in the Philippines 224 000
Operating expenses 112 000
The input taxes attributable to export sales which may be refunded or credited against
other internal revenue taxes, including any value-added tax on domestic sales, is:
A. P 60 000 C. P 84 000
B. P 24 000 D. P 96 000
Problem 8
9. Bogart is an operator of parking lots. What business tax is due on his income from the
business?
A. Broker’s tax C. Caterer’s tax
B. Common carrier’s tax D. Value-added tax
Problem 9
Sale of services by a VAT-registered contractor:

Collections on total invoice price for contracts completed
(including P 448 000 for materials) P 1 120 000
Receivables on billings (VAT included) 336 000
Advances on contracts (VAT not included) 200 000
Retentions on contracts made by clients out of contract price already earned 90 000
Purchases of:
Materials (VAT included) 224 000
Services of sub-contractor (VAT not included) 448 000
Services of persons subject to percentage taxes 56 000
Salaries of employees 60 000
10. Output taxes are:

A. P 158 400 C. P 132 000
B. P 144 000 D. P 154 000
11. The input taxes are:
A. P 67 200 C. P 77 760
B. P 72 000 D. P 80 640
12. The value-added tax payable is:
A. P 64 800 C. P 86 400
B. P 86 400 D. P 66 240
Problem 10
13. Lesion is a lessor of real property and personal property

pr operty (cars). The tax that he pays
pa ys is:
A. Excise tax C. Transaction tax
B. Value-added tax D. None of these
Problem 11
14. Which of the following shall be subject to 0% VAT?

VA T?
A. Sale of electricity by generation companies.
B. Sale of electricity by transmission companies.
C. Sale of electricity by distribution companies.
D. Sale of power or fuel generated through renewable sources of energy.
Problem 12
Japayuki Corp. imported an article from Japan. The invoice value of the following article was
P 1 000 000 Yen (1 Yen= P0.50). the following were incurred in connection with the
importation:
Insurance P 15 000
Freight 10 000
Postage 5 000
Wharfage dues 7 000
Arrastre charges 8 000
Brokerage fee 25 000
Facilitation fee 3 000
The imported article was subject to P 50 000 customs duty and P 30 000 excise tax. Japayuki
Corp. spent P 5 000 for trucking from the customs warehouse in Quezon City.
15. The VAT on importation is:

A. P 65 800 C. P 65 000
B. P 78 000 D. P 50 000
16. Assuming that the imported article was sold for P 950 000, VAT exclusive, the VAT
payable is:
A. P 36 000 C. P 30 000
B. P 29 200 D. P 114 000
Problem 13
M. Porter is VAT-registered. Importations were for:

Any value-added tax not included. Sale Own use
Invoice cost (Exchange rate is $1: P56) $ 80 000 $ 4 000
Expenses based on cost:
Freight and insurance 4% 4%
Other expenses up to the point of removal from customs house 6% 6%
Transfer expenses from customs house to warehouse in Mania ½% ½%
Selling price of goods imported for sale within the same taxable period of importation, value-
added tax included, was P 6 720 000.
17. The value-added tax payable on the importations of M. Porter is:

A. P 492 800 C. P 517 440
B. P 491 300 D. P 620 928
18. The value added tax payable on the sale is:
A. P 99 072 C. P 107 200
B. P 128 640 D. P 720 000
19. Which of the following sales of real properties shall not be exempt from VAT?
A. Sale of real properties not primarily for sale to customers or held for lease in the
ordinary course of trade or business.
B. Sale of real properties utilized for low-cost and socialized housing.
C. Sale of real properties utilized for commercial purposes.
D. Sale of residential lot valued at P1 919 500 and below, or house and lot and other
residential dwellings valued at P 3 199 500, and below.
Problem 14
20. INDICATE if the following receipts from lease of residential units are subject to VAT or
not:
Case Monthly Rental Aggregate Annual Rental Taxable/ Not
taxable
1 P 7 000 P 2 600 000 Not taxable
2 12 800 1 400 000 Not taxable
3 9 500 1 450 000 Not taxable
4 13 000 1 919 500 Not taxable
5 13 000 2 600 000 Taxable
Problem 15
Miss Divina Valencia, a bold actress, had the following data for the quarter ending June 30,
30 , 2013
(amounts are exclusive of tax):
Receipts from talent fees P 1 000 000

Gross receipts from taxicabs (4 units) 500 000
Purchases of wardrobes used in films 200 000
Purchases of spare parts of taxicabs 100 000
Public relation services for image build-up as an actress 85 000
Insurance premiums for taxicabs 61 000
Rent of office space used both for her occupation
and taxicabs business, subject to VAT 400 000
21. The VAT payable by Miss Valencia is-

A. P 37 800 C. P 53 800
B. P (41 520) D. P 18 480
Problem 16
Sosyal is a Vat-registered taxpayer. The following data from the books of accounts were
transactions for each of the months of January,
Jan uary, February and March (first quarter) of 2012:
January February March

Credits to sales account P 440 000 P 550 000 P 770 000
Debits to purchases account on
local purchases of goods from:
VAT-registered persons 110 000 660 000 330 000
Non-VAT registered persons 20 000 30 000 15 000
Importation of goods, landed cost 50 000
22. The value-added tax payable at the end of January is:

A. P 33 000 C. P 30 000
B. P 39 600 D. P 52 800
23. The value-added tax payable (refundable) at the end of February is:
A. P (19 200) C. Due of 0
B. P 19 800 D. P 66 000
24. The output taxes on the return for the period ending March is:
A. P 160 000 C. P 211 200
B. P 176 000 D. P 92 400
25. The value-added tax payable at the end of March 2012 is:
A. P 13 800 C. P 13 200
B. P 33 600 D. P 39 600
Problem 17
26. The following first quarter data pertain to a value-added taxpayer whose purchases were
all from value-added taxpayers:
Output taxes, January P 132 000
Input taxes, January 240 000
Output taxes, February 348 000
Input taxes, February 144 000
Sales, total invoice price, March 3 360 000
Purchases, total invoice cost, March 1 456 000
The value-added tax payable for March is:
A. P 190 400 C. P 204 000

B. P 192 000 D. P 260 400
Problem 18
A VAT registered business has the following transactions:

Sales of good to private entities, net of 12% VAT P 2 500 000
Purchases of goods sold to private entities, gross of 12% VAT 896 000
Sales to a GOCC, net of 12% VAT 1 000 000
Purchases of goods sold to GOCC, net of 12% VAT 700 000
27. How much is the withholding VAT?
A. P 120 000 C. P 50 000
B. P 70 000 D. none of the above
28. What is the treatment of the excess actual input VAT attributable to sales to GOCC?
A. Input tax credit C. income
B. Expense or cost D. none of the above
29. How much is the VAT payable?
A. P 244 000 C. P 120 000
B. P 204 000 D. none of the above
Problem 19
Felicisima had the following data during the month of February:
Case A Case B
Sales, net of VAT 1 900 000 2 800 000
Purchases of goods for sale, exclusive of VAT 1 260 000 1 600 000
Purchases of machines (VAT not included) 1 440 000 900 000
Machine life 6 years 3 years
30. The VAT payable in Case A:

A. P 76 800 C. P 74 400
B. P 78 920 D. P 154 080
31. The VAT payable in Case B:
A. P 36 000 C. P 142 200
B. P 141 000 D. P 300 000
32. The VAT payable in Case A if the life of the machine is 4 years only:
A. P 73 920 C. P 73 200
B. P 154 800 D. P 74 400
MULTIPLE CHOICE QUESTIONS
1. The following are major internal revenue business taxes in the NIRC of 1997, except one:
A. Income tax C. Value-added tax
B. Excise tax D. Percentage tax
2. Alamid imported cigarettes from Taiwan for sale. At a later date, h e sold cigarettes in the
Philippines. He is subject to value-added tax.
tax . He is also subject to the business tax of:
A. Excise tax C. Percentage tax
B. Income tax D. None of these
3. Burgos is manufacturer of fermented liquors. In making sales, all taxes on the products
and transactions are passed on to the buyers. For purposes of the value-added tax, which
of these taxes listed below that he pays
pa ys forms part of the gross selling price?
4. Cantor is a VAT-registered dealer of liquors. On his sales in the Philippines, his tax is:
5. Statement 1: A person subject to excise tax is also subject to value-added tax.
Statement 2: A person subject to percentage tax is also subject to value-added tax.
A. Both statements are correct
B. Statement 1 is correct while statement 2 is wrong
C. Both statements are wrong
D. Statement 1 is wrong while statement 2 is correct
6. Which statement is correct? The value-added tax on importation:
A. Should be paid by b y the tax-exempt importer, if he subsequently sells the goods to a
non-tax-exempt purchaser.
B. Should be paid by the non-tax-exempt purchaser to whom the tax-exempt importer
sells it.
C. Is a liability either of the tax-exempt importer or the n on-tax-exempt purchaser.
D. Shall not pay the value-added tax because the transaction was exempt at the point of
importation.
7. The value-added tax of Gencor Co., before any tax credits, is:
A. P 210 960 C. P 173 300
B. P 175 800 D. P 207 960
8. The business tax of Falcon Co., before any tax credits, is:
A. Value-added tax of P 3 960 C. Value-added tax of P0
B. Percentage tax of P 990 D. Percentage tax of P0
9. Which statement is wrong? Transactions considered “in the course of trade or business”
and, therefore, subject to the business taxes include:
A. Regular conduct or pursuit of a commercial or an economic activity by b y a stock private
organization.
B. Regular conduct or pursuit of a commercial or an economic activity by a non-stock,
non-profit private organization.
C. Isolated services in the Philippines by non-resident foreign persons.
D. Isolated sale of goods or services for a gross selling price or receipts of P 500 000.
10. First statement: Sales of drugs and medicines of pharmacy run b y the hospital to
outpatients are subject to VAT.
Second statement: Pharmacy items used in the performance of medical procedures in
hospital units such as in the operating and delivery
d elivery rooms and by other departments
dep artments are
considered part of medical services rendered by the hospital, hence, not subject to VAT.
B. Both statements are incorrect
C. Only the first statement is correct
D. Only the second statement is correct
11. To be exempt from value-added tax, the lease of residential units shall have:
I. Monthly rental per unit of P 12 500 or less.
II. Gross annual rentals exceeding P P 1 919 500.
A. Both I and II are necessary
B. Both I and II are not necessary
C. Only I is necessary
D. Only II is necessary
12. Gross selling price includes all of the following, except one. Which one?
A. Total amount which the purchaser pays to the seller.
B. Total amount which the purchaser is obligated to pay to the seller.
C. Excise tax.
D. Value-added tax.
13. Statement 1: The output value-added tax is computed by multiplying the gross selling
price by 12%; or multiplying the total amount indicated in the invoice by 12/112.
Statement 2: The output value-added tax is computed by multiplying the total amount
indicated in the invoice by 12%.
B. Both statements are wrong
C. The first statement is correct but the second statement is wrong
D. The first statement
statement is wrong but the second
second statement is correct
14. Which statement is correct?
A. The sales invoice that shows a total, with an indication that it includes the value-
value -
added tax even if it does not show the tax separately, is a correctly prepared invoice.
B. The invoice which shows the selling price and the value-added tax separately, but
with a total which is a correct amount
a mount is a properly prepared invoice.
C. An invoice which shows the selling price and the value-added tax separately, which is
paid by the buyer, is violative of the revenue regulations on issuance of sales invoice.
D. A sales invoice by a VAT taxpayer can be used only on a VAT sale.
15. S1: in the books of accounts
accou nts of a VAT-registered taxpayer, sales are recorded net of
output taxes.
S2: in the books of accounts
accou nts of a VAT-registered taxpayer, purchases are recorded net of
input taxes.
B. Both statements are wrong
C. The first statement is correct but the second statement is wrong
D. The first statement is wrong but the second statement is correct
16. Which of the following are not account titles with balances
b alances in the books of accounts of a
VAT taxpayer?
A. Output taxes C. Excess input taxes carry-over
B. Input taxes D. VAT payable
17. Takuza, a Japanese residing in the Philippine,
P hilippine, bought garments from Halili Corp., a
domestic corporation, and exported the same to Japan. Total value of export is P 100 000.
The output VAT due on the transaction is:
A. P 12 000
B. P 10 000
C. None, because 0% applies
D. None, because the sale is exempt from VAT
18. The allowable transitional input tax is:
A. The lower between 2% of the value of beginning inventory or actual VAT paid on
such inventory.
B. The higher between 2% of the value of beginning inventory or actual VAT paid on
such inventory.
C. The actual VAT paid on the beginning inventory.
D. 2% of the value of beginning inventory.
19. Which statement is wrong?
A. There is a transitional input tax on sales of goods or properties.
B. There is a transitional input tax on sales of services.
C. There is a presumptive input tax on o n sales of goods or properties.
D. There is a presumptive input tax on o n sales of services.
20. Ilarde, a VAT taxpayer, on January
Jan uary 1, 2013, made the following purchases from VAT
sellers, for use in his business. The amounts stated below are not inclusive of value-added
taxes:
Machine 1, with a useful life of 20 years P 3 000 000
Machine 2, with a useful life of 3 years 1 800 000
Patent, with usefulness of 10 months 600 000
The input taxes from the purchases, available to Ilarde, for the month of January, 2013:
20 13:
A. P 19 200 C. P 79 500
C. P 70 000 D. P 84 000
21. A VAT-registered supplier sold goods amounting to P 500 5 00 000 gross selling price to a
government-controlled corporation during a particular quarter. Which of the following
statements is incorrect in relation to the sale of goods?
A. The sale is subject to withholding of final VAT.
B. The government-controlled corporation will withhold P 25 000 final VAT.
C. The government-controlled corporation shall remit withholding VAT to the BIR
within 10 days following the end of the month the withholding was made.
D. The VAT-registered supplier may refuse the withholding of VAT as long as it is
willing to pay the full 12% VAT.
22. Zorro had the following data arising out of sales and
a nd purchases in January, 2013:
Output taxes on sales P 240 000
Input taxes on purchases of goods sold 238 200
Input taxes on machine bought with a useful life of 12 180 000
years
The value-added tax payable for the month:

A. P 0 C. P 72 000
B. P 1 800 D. P 60 000
23. Kitkat, a VAT taxpayer, had the following data for the first 3 months of taxable year
2013:
Data for the months January February March
of
VAT not included:
Sales P 1 150 000 P 2 000 000 P 1 850 000
Purchases 600 000 1 600 000 900 000
There was a deferred input tax of P 20 000 at the end of the previous year. The value-
added tax payable at the end of March is:
A. P 90 000 C. P 95 000
B. P 180 000 D. P 114 000
24. On January 5, 2013, Smarty Co., VAT-registered, sold on account goods for P 112 000 to
Global Corp. The term was 2/10, n/30. Payment was made on January 10, 2013. The total
amount due is.
A. P 112 000 C. P 109 760
B. P 98 000 D. P 100 000
Items 24-25
After recognizing the value-added tax payable for the month of December 2012, the books of
accounts of Colors, a merchandising company, showed a debit balance in the input taxes account
of P 12 000. Sales and purchases at total invoice prices/costs for January 201 3 were:
Sales P 896 000

Sales return and allowances 56 000
Sales discount 22 400
Purchases of:
Goods for sale, from VAT-registered persons 224 000
Goods for sale, from non-VAT registered persons 56 000
Services, from VAT-registered persons 21 280
Equipment (life of 10 years) from VAT-registered person 112 000
Importation of goods for sale:
Invoice cost, country of origin 20 000
Freight 500
Insurance 200
Customs duty 600
Excise tax 100
Other expenses prior to removal from customs custody 300
Other expenses after removal from customs custody 250
Operating expenses 30 000
25. The value-added tax on the importation is:

A. P 2 170 C. 2 634
B. P 2604 D. P 6 234
26. The value-added tax payable for January 2011 is:
A. P 34 716 C. P 40 716
B. P 41 150 D. P 46 716
27. A VAT-registered stockbroker (not dealer in securities) who owns shares of stock as
investments had the following selected data on gross receipts, costs and expenses (value-
added taxes not included), for January 2013:
Commissions received from buyers P 200 000
Commissions received from sellers 300 000
Selling price of shares of stock traded in the
LSE:
ABC Company 400 000
XYZ Company 600 000
Cost of the shares sold:
ABC Company 300 000
XYZ Company 500 000
Cost of supplies used in the brokerage business paid to VAT-taxpayers amounted to P 33

600, value-added tax included. Salaries of employees amounted to P 67 200. The value-
added tax payable and the other percentage tax due for the month are:
VAT payable Percentage tax due VAT payable Percentage tax due
A. P 46 640 P 10 000 C. P 52 800 P 40 000
B. P 49 200 P 20 000 D. P 56 400 P 5 000
28. A VAT- registered public works contractor has the following data on services rendered to
the government in the Philippines for the 1st quarter of 2013:
Contract price on government contracts P 3 000 000
Collections from private sector clients 2 000 000
Collections on government contracts 1 000 000
Purchases for services of a VAT-registered subcontractor 400 000
(used in government contracts)
Purchases (used in private sector and government contracts) 300 000
The tax payable for the quarter:

A. P 50 000 C. P 120 000
B. P 170 000 D. None
TAX.M-1404 OTHER PERCENTAGE TAX
Q1: Which of the following statements is incorrect?
A. The percentage tax is basically on sale of services.

B. The percentage tax may be imposed on a sale of goods.
C. The percentage tax may be imposed together with the value-added tax.
D. The percentage tax may be imposed together with excise tax.
Q2:
BUSINESS VAT REGISTRATION ANNUAL SALES

1. Barbershop VAT registered P 800 000
2. Restaurant Not VAT registered 800 000
3. Department store VAT registered 2 700 000
4. Lodging house Not VAT registered 2 800 000
5. Rice retailer Not VAT registered 2 650 000
6. Fertilizer distributor Not VAT registered 2 500 000
Which of the above establishments are not subject to VAT?
A. 2, 4 and 5 C. 1, 2 and 5
B. 2 and 6 only D. 2, 5 and 6
Q3: Che-che is a CPA. The following are her data during the period (amounts are net of tax):
Salary as accounting teacher and reviewer P 20 000

Motel business (amounts are exclusive of tax):
Gross receipts from business (VAT registered) 250 000
Discounts 25 000
Purchases:
From VAT-registered suppliers 28 000
From non-VAT suppliers 27 500
Business expenses (60% VAT) 25 000
Practice of profession (not VAT-registered):
Gross receipts 47 500
Purchases
From VAT registered sellers 21 200
From non-VAT sellers 18 000
Expenses- profession 24 000
1. The VAT payable is-

A. P 2 640 C. P 3 480
B. 3 336 D. 21 840
2. The percentage tax payable is-
A. P 225 C. P 201
B. 1 425 D. 681
Q4: Trucseabus Company, Manila based, had the following receipts during the month:
Bus (receipts from cargo senders, P 11 450) (total pass 45)

45 ) P 100 000
To be received on freight collect conditions 4 320
Salaries of drivers and conductors 25 000
Cost of oil and gasoline 30 000
Taxi 40 000
Jeepney 10 000
Cargo truck 70 000
Sea vessel, MV Lolo Bogg (carriage of cargo 35%) 400 000
During the month, one of the units of Accident Company bumped the taxi and paid Trucseabus
Company P 15 000 for the damages done.
The percentage tax due is-
A. P 4 026.9 C. P 4 516.5
B. 4 513.5 D. 6 696.81
Q5: Love Bus Transport Company, Monumento-Baclaran, operates ten (10) units of buses
with a capacity of 50 passengers. During the month, it had the following data in its books:
Receipts from passengers P 2 000 000

Receipts from cargoes 500 000
Expenses for repair of transport units (VAT) 30 000
Salaries of personnel 300 000
Purchase of spare parts 60 000
Registration with LTO 10 000
Premiums on insurance per unit 15 000
1. How much is the percentage tax payable?

A. P 60 000 C. P 60 450
B. 48 750 D. 75 000
2. How much is the VAT payable?
A. P 47 400 C. P 31 200
B. 46 200 D. 54 240
Q6: A common carrier by land is engaged

en gaged in the transport of passengers, goods and cargoes.
He is not VAT-registered. What business taxes is he liable to the government?
A. 12% VAT
B. 3% common carrier’s tax
C. 3% tax on VAT-exempt persons on gross receipts from transport of goods and cargoes
and 3% common carrier’s tax on gross receipts from transport of passengers.
D. 12% VAT on gross receipts from transport of goods and cargoes and 3% common
carrier’s tax on gross receipts from transport of passengers.
Q7: An international carrier is subject to the following tax-
A. 12% value-added tax and ordinary income tax on gross receipts within the Philippines.
B. 0% VAT and 2.5% income tax on gross receipts within the Philippines.
C. 3% other percentage tax on gross receipts
D. 3% other percentage tax on gross receipts and ordinary income tax on gross income.
Q8: The Socsksargen Group of Companies

Co mpanies is engaged in different lines of business in region
XII. Soc Corporation (not VAT registered) is engaged in the business o f radio and television
broadcasting. Ksar Corporation is a franchisee to supply water in the whole province of
Sultan Kudarat and Gen Corporation
Co rporation has a franchise to generate and distribute electricity in
the entire area covered by General
G eneral Santos City. During the month, it had the following
receipts:
Socs Corporation P 360 000

Ksar Corporation 4 800 000
Gen Corporation 8 250 000
How much is the total franchise tax on Socsksargen Group of Companies?
A. P 106 800 C. P 345 500

B. 175 800 D. 96 000
Q9: Malansa Company is a holder of a franchise to sell water. During the month, it had the
following data:
Gross receipts from the sale of water to the public P 3 000 000
Penalties imposed and collected on illegal connections 150 000
Rent of its heavy equipment to a private subdivision 50 000
developer
Sale of scrap materials 20 000
The franchise tax is-
A. P 61 400 C. P 60 000
B. 60 400 D. 61 000
Q10: DYYY is a franchisee to operate a radio station. The data in its books are
a re as follows:
Gross receipts last year P 8 000 000
Gross receipts during the month 700 000
Payment to VAT suppliers of goods and services 300 000
Payment to non-VAT suppliers of goods and services 20 000
The business tax payable if it is not VAT-registered/VAT registered:

registered:
Not VAT-registered VAT-registered

A. P 261 000 P 48 000
B. 261 000 24 000
C. 21 000 48 000
D. 21 000 24 000
Q11: A telephone company, Vat-registered,

Vat -registered, provides services for domestic and overseas
calls. What business taxes will be due from the services offered?
A. VAT on both services

B. Overseas communications tax on both services
C. VAT on domestic calls and overseas communications tax on overseas calls.
D. Franchise tax on both services
n ot payable on or before the 20th day

Q12: Which of the following percentage taxes is not
after the close of the month?
A. Franchise tax C. common carrier’s tax

B. Overseas communications tax D. tax on life insurance
Q13: the Bayani Telephone Company, a franchisee to operate a landline telephone, billed
Telly Babad the following:
Amount collected on calls:

Incoming calls (5% toll charges billed to local P 4 300
receiver) 9 350
Outgoing overseas calls
Domestic long-distance calls 1 200
Monthly bills on subscribers 525
The overseas communication tax on Telly Babad is-
A. P 1 280.00 C. P 850.00
B. 1 452.50 D. 871.50
Q14: Filipinas Life Insurance Company had the following data on collections of
premiums and disbursements during the month:
Life insurance Non-life insurance

Cash collections P 150 000 P 145 700
Checks 45 000 34 600
Accounts receivable 25 200 58 900
Payments of expenses to VAT businesses 43 000

Payments of expenses to non-VAT 35 000
businesses
The amounts indicated pertaining to VAT transactions do not include the value-added
tax.
1. The premium tax due is-

A. P 11 010 C. P 9 750
B. 14 785 D. 3 900
2. The VAT payable is-
A. P 17 484 C. P 16 476
B. 12 324 D. 12 276
Q15: A domestic insurance company gave the following information for the month:
Gross receipts from its insurance policies:

Premium on life insurance P 2 100 000
Premium on non-life insurance 1 500 000
Gross receipts as agent of a foreign insurance
company: 4 000 000
Premium on non-life insurance 1 000 000
Premium on property insurance
Percentage tax due for the month is-
A. P 355 000 C. P 605 000

B. 542 000 D. 710 000
Q16: The PBA is a professional basketball organization which holds the games in the Big
Dome. In May of the current year, it had the following gross receipts:
From the gates P 2 000 000

Radio and television rights 1 000 000
Advertisement inside the Big Dome 150 000
Sale by canteen inside the Big Dome maintained by the Big Dome 500 000
Ambulant vendors also provided by the company had a gross 75 000
receipts of
Expenses for the maintenance 45 000
During the month, it was leased to a private group of persons who sponsored an
international derby inside the Big Dome. The gross receipts amounted to P 2 500 000.
It also hosted the UAAP Volleyball Championship between Ateneo Lady Eagles and De
La Salle Lady Archers. Gross receipts from the gates amounted to P 250 000.
The total amusement tax due is-
A. P 558 750 C. P 1 008 750

B. 933 750 D. 1 046 250
Q17: Carlos supplies foods and drinks in Peacock which is operated by a friend, Rudy.
It’s gross sales (per invoice) during the month amounted to P 250 000 and his
h is purchases
from VAT suppliers amounted to P 185 000. The gross receipts of Rudy for the month
was P 425 000. The amusement tax due is-
A. P 76 500 C. P 121 500

B. 45 000 D. 88 200
Q18: Boxing exhibitions shall be exempt from amusement tax when the following
conditions are present:
1- Involves World, Oriental or Philippine Championships in any division.

2- Both of the contenders are citizens of the Philippines.
3- Promoted by citizens of the Philippines, or association at 60% of the capital is owned
by Filipino citizens.
A. All of the three conditions are correct.
B. None of the three conditions are correct.
C. Only conditions 1 and 2 are correct.
D. Only condition 3 is correct.
Q19:
Revenues from the current period P 400 000

Collections during the period of:
Revenues of prior periods 50 000
Revenues of the current period 300 000
Revenues of the succeeding period (advances) 10 000
1. The business tax if a domestic common carrier by land for the transport of
passengers:
A. P 12 000 C. P 10 800
B. 9 000 D. 22 800
2. The business tax if a night club:
A. P 54 000 C. 72 000
B. 64 800 D. 136 800
3. The business tax if a race track:
A. P 120 000 C. P 90 000
B. 228 000 D. 108 000
Q20: A horseracing aficionado has the following winnings during a particular race day:
Total winnings P 10 000

Cost of winning tickets 500
The tax on winnings is:
A. P 1 000 C. P 950
B. 400 D. 380
Q21: A corporation where at least fifty percent (50%) in v alue of the outstanding capital
stock or at least fifty (50%) of the total combined voting p ower of all classes of stock
entitled to vote is owned directly or indirectly by or
o r for not more than twenty (20)
(20 )
individuals.
A. Closely held corporation C. Foreign corporation

B. Publicly held corporation D. domestic corporation
Q22: Yveth sold the following shares of stocks of a domestic corporations, thru her
broker.
Cost Selling Price Date of Sale

Stocks of A Corporation P 100 000 P 180 000 10-03-12
Stocks of B Corporation 350 000 320 000 10-20-12
The total percentage tax if the stocks are:
Listed & traded Not listed & traded
A. P 2 500 P 8 000
B. 2 250 5 000
C. 2 500 None
D. 2 250 8 000
Q23: Who is the taxpayer as far as the initial public offering in the local stock exchange
ex change of
closely held corporations is concerned?
A. The purchaser of shares of stock offered in the IPO
B. The corporate issuer
C. The corporate purchaser
D. The local stock exchange
Q24: ABC Corporation, closely held corporation, has an authorized capital stock of 100 000
0 00
shares with a par value of P 1.00 per share as of January 1, 2013: 25 000 thereof
t hereof is
subscribed and paid up by the following stockholders:
Andi P 5 000
Bianca 5 000
Carla 5 000
Diana 5 000
Enciang 5 000
Total shares outstanding 25 000
ABC Corporation finally decides to conduct an IPO and initially offers 25 000 of its unissued
shares to the investing public at P1.25 per share. After the IPO in March 2013,
20 13, ABC
Corporation’s total issued shares increased from 25 000 to 50 000 shares.
At the IPO, Andi has likewise decided to sell her entire 5 000 shares to the public at P 1.50
per share. Thus, 5 000 shares have been offered in the primary offering and 5 000 shares in
the secondary offering.
1. How much is the percentage tax on ABC Corporation’s newly issued shares?
A. P 375 C. 750
B. 1 500 D. 93.75
2. How much is the percentage tax on the secondary offering of Andi’s shares
A. P 3 000 C. 300
B. 75 D. None
3. If in June 2013, ABC Corporation again decides
d ecides to increase capitalization by offering
another 300 000 of unissued shares to the public at P 2/share, such follow-through shall
be subject exempt from-
A. Percentage tax and documentary stamp tax
B. Documentary stamp tax but not percentage tax
C. Percentage tax but not documentary stamp tax
D. Neither percentage tax nor documentary stamp tax
4. In case Diana decides to offer her existing
ex isting 5 000 shares to the public subsequent
subseq uent to IPO at
P 2/share, the percentage tax shall be-
A. P 25 C. 300
B. 50 D. 1 000
Q25: Manalo, a dealer in securities, sold P 1 500 000 (tax included) worth of shares it held as
inventory to Romulo. The shares sold were acquired for P 1 000 000 (tax excluded) and were
listed and traded in the local stock exchange. The tax due on the sale is:
A. None C. P 45 000
B. P 7 500 percentage tax D. 60 000 value-added tax
Q26: ABC Bank has the following income/loss for the following months:
March April
Interest income with maturity of less than 5 years P 50 000 P 100 000
Rentals 50 000 50 000
Net trading gain/loss (10 000) 20 000
The gross receipts tax for the months of March and
an d April, respectively:
A. 5 000; 8 500 C. 6 000; 9 200

B. 6 000; 9 900 D. 5 300; 9 200
Q27: Banco Deposito had the following data for the first month of the current year:
Interest, commissions and discounts from lending activities P 5 000 000

(remaining maturity of instrument is 5 years)
Income from financial leasing (remaining maturity of 3 000 000
instrument is more than 5 years)
Dividends and equity shares in net income of subsidiaries 1 000 000
Rentals of properties 500 000
Net trading gains within the taxable year on foreign currency 300 000
How much is the gross receipts tax?
A. P 386 000 C. 336 000

B. 250 000 D. 326 000
MULTIPLE CJOICE QUESTIONS
1. Which of the following statements in incorrect?

A. A taxpayer whose annual gross sales and/or receipts exceed P 1 919 500 shall pay
VAT even if he is not VAT-registered.
B. A taxpayer whose annual gross sales and/or receipts do not exceed P 1 919 500 but
who is VAT-registered shall pay VAT.
C. Percentage tax may be imposed together with VAT.
D. Percentage tax may be imposed together with excise tax.
2. First statement: Persons whose transactions are exempt from value-added tax because
their gross sales and/or receipts do not exceed P 1 919 500 may
ma y voluntarily apply for
registration under the VAT system.
Second statement: A VAT-registered person whose gross sales and/or receipts for two (2)
consecutive years did not exceed P 1 919 500 may apply for cancellation of VAT
registration and revert back to being VAT-exempt.
A. Both statements are correct C. only the first statement is correct
B. Both statements are incorrect D. only the second statement is correct
3. A seller of goods is not VAT-registered. His annual gross sales amount to P 1 919 500.
To what business tax is he liable?
A. 3% tax on VAT-exempt persons C. 3% common carrier’s tax
B. 12% value-added tax D. not subject to any percentage tax
4. Marino is an owner of a small variety store. His gross sales in any one year do not exceed
P 1 919 500. He is not VAT-registered. The following sata are taken from the books of
the variety store for the quarter ending March 31, 2013:
Merchandise inventory, Dec. 31, 2012 P 10 000
Gross sales 45 000
Purchases from VAT-registered supplier 38 500
The percentage tax due is:
A. P 1 000 C. 4 500
B. 1 350 D. none
Items 5 and 6 are based on the following information:
In the second quarter of 2013, a taxpayer engaged in the sale of services and whole annual
gross receipts do not exceed P 1 919 500 has the following data:
Accounts receivable, beginning of the quarter P 50 000

Sales during the quarter 100 000
Accounts receivable, end of quarter 75 000
Purchase of supplies, total invoice amount 11 200
5. The percentage tax due for the quarter is:
A. P 2 250 C. P 1 914
B. 3 000 D. 2 664
6. Assuming the taxpayer is VAT-registered, the VAT payable is:
A. P 2 250 C. 7 656
B. 9 000 D. 7 800
7. Which of the following franchise grantees is subject to the franchise tax?
A. Franchise on radio and/or television broadcasting companies the annual gross receipts
in the preceding year exceed P 10 000 000.
B. Franchise on gas and water utilities.
u tilities.
C. Franchise on toll road operations.
D. Franchise on telephone communications.
8. Franchise grantees of gas and water utilities are subject to a franchise tax of:
A. 2 % C. 4%
B. 3% D. 5%
9. The franchise tax of grantees of radio and/or television broadcasting whose annual gross
receipts of the preceding year do not exceed P 10 000 000 shall be:
A. 2% of the gross receipts C. 10% of the gross receipts
B. 3% of the gross receipts D. 12 % of the gross receipts
10. Kapatid is a radio-TV broadcasting franchise grantee. During the p receding year, its gross
receipts did not exceed P 10 000 000. During the first quarter of the current year, it has
the following data:
Gross receipts, sale of airtime P 2 000 000
Gross receipts, use of radio station’s communication facilities 500 000
Business expenses 700 000
The franchise tax due for the quarter is:

A. P 60 000 C. 75 000
B. 50 000 D. 54 000
11. Beneco is a holder of franchise to distribute and sell electricity. In a particular quarter, its
gross receipts amounted to P 2 000 000 from distribution and sale of electricity. It has
also receipts from the lease of its auditorium and theater amounting to P 600 000. The
value-added tax or percentage tax due for the quarter is.
A. P 40 000 percentage tax C. 52 000 percentage tax
B. 72 000 value-added tax D. 312 000 value-added tax
12. The operator of one of the following places is not subject to amusement tax:
A. Cockpits C. bowling alleys
B. Racetracks D. KTV karaoke joints
13. First statement: All boxing exhibitions held in the Philippines shall be subject to
amusement tax.
Second statement: Admission charges to amusement places are required fo r the
imposition of amusement tax.
C. Both statements are incorrect D. only the second statement is correct
14. Chavit, a Filipino citizen, promoted a world boxing championship in Manila featuring
Pacman, a Filipino champion. Gate receipts amounted to P 3 000 000 and additional
receipts from television coverage was P 2 000 000. The amusement tax due is:
A. Exempt C. P 300 000
B. P 500 000 D. P 600 000
15. Assuming the above is not a world championship but a Philippine national boxing
championship, how much is the amusement tax: tax :
A. Exempt C. P 300 000
B. P 500 000 D. P 600 000
16. Pana Lo operates a cockpit.
cockp it. Inside the cockpit, he also operates
o perates a restaurant. Data for a
particular quarter follow:
Gross receipts:
Cockpit operation P 500 000
Restaurant operation:
Sale of food 100 000
Sale of liquor 150 000
The amusement tax due from Pana Lo is:
A. P 90 000 C. 225 000

B. 135 000 D. 112 500
17. Using the data in no. 16, except that the restaurant is not owned by Pana Lo but is owned
by another person, not VAT-registered and whose annual gross receipts never exceeded P
1 919 500, the amusement tax due from Matuti is:
A. P 90 000 C. 225 000
B. 135 000 D. 112 500
18. Continuing no. 17, the percentage tax due from the restaurant owner is:
A. P 45 000 C. 30 000
B. 25 000 D. 7 500
19. First statement: The 10% tax on winnings is based on actual amount paid for every
winning ticket after deducting the cost of ticket.
Second statement: The rate of tax on winnings in case of double forecast/ quinella and
trifecta bets shall be four (4%) of the actual amount paidp aid for every winning ticket after
deducting the cost of the ticket.
20. First statement: The tax on insurance premium applies to ev ery person, company or
corporation doing life insurance business or any sort in the Philippines, except purely
cooperative companies and associations.
Second statement: A person engaged in non-life
n on-life insurance business is subject to value-
added tax.
21. First statement: The tax on life insurance premium is 2% based upon the total premiums
collected whether such premiums are paid in money, mon ey, notes, credits or any substitute for
money.
Second statement: The tax on agents of foreign insurance companies is 10% based upon up on
the total premiums collected.
22. Shares of stock held as investment when sold through the local stock exchange shall sh all be
subject to:
A. ½% of 1% based on gross selling price or gross value in money.
B. 12% VAT based on gross income.
C. 5% on first P 100 000 capital gain; 10% on excess of P 100 000.
D. 4%; 2%; 1% based on gross gro ss selling price or gross value in money.
23. One of the following statements is incorrect.
A. The ½% of 1% tax shall be collected by the broker who made the sale and shall be
remitted within 5 banking days from the date of collection.
B. The tax paid on sale of shares through local stock exchange and initial public offering
(IPO) and secondary offering shall not be allowable deduction for income tax
purposes,
C. The ½% of 1% stock transaction tax is a final withholding tax on income.
D. The ½% of 1% stock transaction tax is collected whether there is an imcome or a loss
and is percentage tax.
24. Gloria invested P 500 000 in the shares of stock of Tabako Corp. the corporation’s shares
are listed and are traded in the local stock exchange. Gloria sold the shares for P 350 000
through the local stock exchange. The percentage tax on the sale is:
A. P 6 000 C. 1 750
B. 3 500 D. 2 500
25. Using the same data in no. 24 and assuming that Gloria sold the shares to Bayani, a direct
buyer, the percentage tax on the sale is:
A. none C. P 1 750
B. P 2 500 D. 10 000
26. One of the following is subject to common carrier’s tax.
A. Owners of bancas
B. Owners of animal-drawn to-wheeled vehicles
C. Common carriers by air or water for transport of passengers, goods or cargoes
D. Common carriers by land for transport of passengers
27. A person whose business is to keep automobiles for hire or keep them stored for use or
order.
A. Keepers of garage C. taxicab operator
B. Common carrier D. tourist bus operator
28. First statement: The gross receipts of common carriers derived from their incoming and
outgoing freight shall be subject to the local taxes imposed under the Local Government
Tax Code.
Second statement: The 3% common carrier’s tax is based on the actual quarterly gross
receipts or minimum quarterly receipts whichever is lower.
29. Saludo is an operator of a fleet of taxis
t axis in Metro Manila. Since he operates under
und er the
“boundary system”, the actual payments
pa yments to him by the taxi drivers of the “boundary”
“b oundary” was
P 150 000. No official receipts are issued by the taxi drivers. Drivers causing damage to
the taxi units paid Saludo P 10 000 for the quarter.
The value-added tax or percentage tax due from Saludo is:
A. P 4 800 percentage tax C. P 18 000 value-added tax
B. P 4 500 percentage tax D. P 19 200 value-added tax
30. One of the following stataments is wrong. Operators of transport facilities by land are:
A. Subject to the value-added tax on gross receipts from transporting passengers.
B. Subject to the value-added tax on gross receipts from transporting goods and cargoes.
C. Subject to percentage tax ono n gross receipts from transporting passengers.
D. Subject to the value-added tax on gross receipts from renting out its transporting
facilities.
Items 31 and 32 are based on the following information:

Saulod is a common carrier with passenger buses and cargo trucks. For the month of June
2013, it had the following data on revenues and receipts, taxes not included:
For transporting passengers, gross revenues and receipts of P 330 000.
For transporting cargoes, gross revenues of P 220 000, of which P 200 000 was received.
For renting out to the MMDA its towing trucks, gross receipts of P 50 000, representing P
10 000 from gross revenue of the quarter ending March 31 and P 40 000 for the month of
june.
31. The percentage tax is:
A. P 17 400 C. 16 500
B. 9 900 D. 15 900
32. The output value-added tax is:
A. P 24 000 C. 25 000
B. 28 800 D. 30 000
33. MV Black Mountain is a common carrier by b y sea. During a particular quarter, its receipts
consists of the following:
Gross receipts, without tax:
Transport of passengers P 1 000 000
Transport of goods 1 500 000
Transport of cargoes 500 000
The output VAT and OPT due for the quarter are:
Output VAT OPT due Output VAT OPT due
A. P 240 000 P 30 000 C. P 0 P 90 000
B. 360 000 0 D. 360 000 30 000
34. One of the following is not subject to the 3% percentage tax.
A. International air carrier doing business in the Philippines.
B. International shipping carrier doing business in the Phils.
C. Domestic carriers by land and keepers of garage.
D. Franchise grantee of city gas and water utilities.
35. A telephone company, VAT-registered, provides services for domestic and overseas
calls. What business taxes are due from the services offered?
I. Value-added tax for domestic calls.
II. Overseas communications tax for overseas calls.
A. Yes to I and II C. yes to I only
B. No to I and II D. yes to II only
36. Banks and non-bank financial intermediaries performing quasi-banking functions are
subject to:
A. Value-added tax C. Franchise tax
B. Gross receipts tax D. Amusement tax
37. The lease of property, real or personal, is subject to:
I. 7% gross receipts tax if the lessor is a bank.
II. 12% VAT if the lessor is not a bank.
A. Yes to I and II C. yes to I only
B. No to I and II D. yes to II only
38. Which of the following is subject to 0% gross receipts tax?
A. Gross receipts on interest, commissions and discounts from lending activities and
income from financial leasing.
B. Dividends and equity shares in net income of subsidiaries.
C. Royalties, rentals of property, real or personal, profits from exchange and all other
items treated as gross income in the Tax Code.
D. Net trading gains within the taxable year on foreign currency, debt securities,
derivatives and other similar financial instruments.
39. First statement: Just like value-added tax, percentage taxes are p aid on a quarterly
(cumulative) basis.
Second statement: Generally, every person liable to t o pay the percentage taxes
tax es shall file a
monthly return within 20 days after the end of each taxable month.

40. First statement: The monthly percentage tax returns of taxpayers shall be filed, and taxes
paid, not later than the 20th day following the end of the month.
Second statement: With respect to taxpayers enrolled with EFPS, the deadline for e-filing
the monthly percentage tax return and e-paying the tax thereon shall be 5 days later than
that set in the first statement.
41. How is the percentage tax on the secondary offering of shares of stock of closely held
corporation collected and paid?
A. The stockbroker collects and remits the tax within 5 working days from the date of
collection.
B. The stockbroker collects and remits the tax within 5 banking days from the date of
collection.
C. The purchaser collects and remits the tax within5 days after the end of the quarter,
fiscal or calendar.
D. The local stock exchange collects and remits the tax within 5 banking days from the
date of collection.
42. Which of the following percentage taxes are paid on a quarterly basis?
I. Overseas communications tax III. Taxes on winnings
II. Amusement tax IV. Stock transactions tax
A. All of the above C. III and IV only
B. I and II only D. II only
43. Any person retiring from a business subject to percentage tax shall notify the nearest
internal revenue officer, file his return and pay the tax due theron within how many days
after closing his business?
A. 10 days C. 20 days
B. 15 days D. 30 days
44. First statement: Other percentage taxes are indirect taxes that can be passed on by person
pe rson
required to pay to another person who shall bear the burden of the tax.
Second statement: The persons liable to overseas communication
commun ication tax may or may not be
engaged in trade or business.
45. The lease of property, real or personal, byb y a bank is subject to-
to -
A. 7% gross receipts tax C. 12% VAT
B. 5% gross receipts tax D. 1% gross receipts tax

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43.

The deductible funeral expenses is:

44. The vanishing deduction is:

45. The deduction for family home is:

46. The deductible medical expenses is:

47. The taxable net estate is:

a. Resident or citizen of the Philippines

c. All kinds of decedents

Gross estate P6,000,000 P4,000,000

Claims against the estate 1,000,000 1,000,000

50. The estate tax return should be accompanied by a certificate of an independent

a. P2,000,000 c. Over P2,000,000

b. P2,000,000 or over d. P50,000 or over

c. The donation shall not pay any transfer tax anymore.

House and lot in London P3,500,000

Apartment house in Naga City 8,000,000

Car in Iriga City 520,000

Car in London 900,000

Savings deposit with BPI 50,000

Accounts receivable, debtor residing in the Philippines 140,000

Accounts receivable, debtor residing in Hongkong 35,000

Franchise exercised in New York 225,000

Franchise exercised in Philippines 120,000

Investment in Good Time Co., partnership established in Hongkong 160,000

Investment in Lovers Company, partnership established in the Phil’s. 125,000

1. The gross gift if Ara is a resident or citizen

Anacleto gave the following donations to:

4. The gift tax payable on February 14, 2012

5. The gift tax payable

6. The gift tax payable

7. The gift tax payable

Mr. and Mrs. Alavado gave the following donations:

May 3, 2013 -Conjugal property valued at P300,000 donated to Barumbado,

July 14, 2013 -Capital property donated

8. The gift tax due of Mrs. Alavado on May 3, 2013

9. The gift tax due of Mr. Alavado on July 14, 2013.

Anaconda, resident, gave the following donations:

Donee January 22, 2013

Naga City A parcel of land to be used for public purposed –

Coronado Legitimate child on account of its forthcoming marriage on February 14,

Dimalupig Legitimate daughter, on account of marriage on February 4, 2012. -

March 25, 2013

Barbado On account of marriage on April 10, 2013 –

Coronado Additional donation on account of marriage Feb. 14, 2013 –

Dimalupig Additional donation on account of marriage Feb. 4, 2012 –

11. The donor’s tax

12. The donor’s tax due on March 25, 2013.

Mr. and Mrs. Albano gave the following donations:

July 1, 2013 Community property was donated to Balaoing,

Nov.10, 2013 Cash of P250,000 was donated to Balaoing.

15. The donor’s

a. 5,000; 37,500 c.37,500;37,500

b. 10,000; 5,000 d. 500,500

Arandasi sold the following assets:

Date of Sale Buyer Market Value Selling Price Cost /Book

Jewelry June 11 Niece P 130,000 P 15,000 P 100,000

Res. House June 22 Girlfriend 1,000,000 600,000 750,000

Apt. House Sept. 25 Legally adopted child 900,000 600,000 750,000

Del. Truck Oct. 10 Controlled corp. 450,000 400,000 350,000

16. The gift tax, if any, in each of the independent

(a) (b) (c) (d)

Jewelry P 300 P 300 P 600 P 600

Residential house 120,000 None 120,000 75,000

Apt. house 6,000 6,000 1,000 1,000