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.
Gross estate Claims against the estate
Philippines
Foreign
P6,000,000
P4,000,000
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 Accounts receivable, debtor residing in Hongkong
140,000 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
6. The gift tax payable payable on October 13, 2012 a. 15,200
c. 7,800
b. 15,800
d. 7,200
7. The gift tax payable 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 value of P800,000
-Conjugal property donated to Carlota. The dowry has fair market
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 P7,000.
Legitimate daughter, on account of marriage on February 4, 2012. -
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 boyfriend .
Cash of P300,000 to Cuarto, son of Mrs. From her teen-age
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 Jewelry
Buyer
Market Value
P
P
15,000
Cost /Book value
P 100,000
June 11
Niece
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
400,000
350,000
Controlled corp.
130,000
Selling Price
450,000
16. The gift tax, if any, in each of the independent independent transactions above. above. (a) Jewelry Residential house Apt. house Delivery truck
P
(b) 300
120,000 6,000 None
P
300 None
(c) P
(d) 600
120,000
6,000
1,000
15,000
15,000
P
600
75,000 1,000 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 c. The first statement is correct and the second statement is wrong. d. The first statement is wrong and the second statement is correct. 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. c. The first statement is correct and the second statement is wrong. d. The first statement is wrong and the second statement is correct. 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. c. The first statement is true and the second statement is false. d. The first statement is false and the second statement is true. 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 c. The first statement is true and the second statement is false. d. The first statement is false and the second statement is true. 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 5/31/2013 7/15/2013 8/20/2013
-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. -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. -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. -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 05/10/2013 10/10/2013 12/10/2013
: To R, a legitimate daughter, on account of marriage cash of P200,000. : 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. : To T, a friend, an ordinary donation of P10,000. : 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: country even if the the citizen Statement 2. There can be a donor’s tax paid to a foreign country or resident donor had no donation of property in the Philippines. 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. 43. Donations to a legitimate child of: Property in the Philippines Property outside the Philippines, Philippines, on account account of marriage Donor’s tax paid to foreign country 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
P110,000 200,000 4,500
Questions 44 and 45 are based on the following data:
Mr. O, made the following donations for the year 2013: April 15
-
July 20
-
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) 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. Gross gift Deductions Deductions Tax paid
USA
UK
Italy
P750,000
P500,000
P250,000
P500,000
250,000
200,000
150,000
150,000
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. 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. 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. c. The first statement is correct and the second statement is wrong. d. The first statement is wrong and the second statement is correct.
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 1. Cash/ accounts receivable P 11 200 Sales 10 000 Output Tax 1 200 2. Cash/ accounts receivable P 11 200 Sales 10 000 Output Tax 1 200 3. Cash/ accounts receivable P 10 000 Sales 10 000
Purchase book Purchases P 10 000 Input tax 1 200 Cash 11 200 Purchases P 11,200 Cash 11 200 Purchases P 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 B. Payable of P 10 800 2. The value-added tax of C: A. Payable of P 7 200 B. Payable of P 6 720 3. The value-added tax of D: A. Payable of P 18 000 B. Refundable of P 18 000
C. Payable of P 10 080 D. Payable of P 12 096 C. Payable of P 8 064 D. Refundable of P 10 900 C. Payable of P 36 000 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 Ha. Professional CPA b. Medium sized store: Sale of office/school supplies Sale of books
P 800 000 P 350 000 P 1 120 000 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 wine wine 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 January 2013 data: January 1 inventory: Purchased from VAT registered persons Purchased from non-VAT registered persons Actual VAT paid Sales (total invoice amount) Purchases (exclusive of VAT)
P 2 900 000
48 000 332 000
5 140 224 000 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 Purchases of sugarcane Purchases of containers and paper labels 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:
P 880 000 220 000 100 000
Domestic sales Export sales Purchases from VAT-registered persons of: Goods exported Goods sold in the Philippines Operating expenses
P
672 000 1 500 000 560 000 224 000 112 000
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 B. P 24 000
C. P 84 000 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) Services of sub-contractor (VAT not included) Services of persons subject to percentage taxes Salaries of employees
224 000 448 000 56 000 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 Freight Postage Wharfage dues Arrastre charges Brokerage fee Facilitation fee
P 15 000 10 000 5 000 7 000 8 000 25 000 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 Invoice cost (Exchange rate is $1: P56) $ 80 000 Expenses based on cost: Freight and insurance 4% Other expenses up to the point of removal from customs house 6% Transfer expenses from customs house to warehouse in Mania ½%
Own use $ 4 000 4% 6% ½%
Selling price of goods imported for sale within the same taxable period of importation, valueadded 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
1 2 3 4 5
P 7 000 12 800 9 500 13 000 13 000
taxable Not taxable Not taxable Not taxable Not taxable Taxable
P 2 600 000 1 400 000 1 450 000 1 919 500 2 600 000
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 Gross receipts from taxicabs (4 units) Purchases of wardrobes used in films Purchases of spare parts of taxicabs Public relation services for image build-up as an actress Insurance premiums for taxicabs Rent of office space used both for her occupation and taxicabs business, subject to VAT
P 1 000 000 500 000 200 000 100 000 85 000 61 000 400 000
21. The VAT payable by Miss Valencia isA. 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: Credits to sales account Debits to purchases account on local purchases of goods from: VAT-registered persons Non-VAT registered persons Importation of goods, landed cost
January P 440 000
110 000 20 000
February P 550 000
660 000 30 000 50 000
March P 770 000
330 000 15 000
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 Purchases, total invoice cost, March The value-added tax payable for March is: A. P 190 400 B. P 192 000
3 360 000 1 456 000
C. P 204 000 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: Sales, net of VAT Purchases of goods for sale, exclusive of VAT Purchases of machines (VAT not included) Machine life
Case A 1 900 000 1 260 000 1 440 000 6 years
Case B 2 800 000 1 600 000 900 000 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.
5.
6.
7.
8.
9.
A. Excise tax C. Percentage tax B. Value-added tax D. None of these Cantor is a VAT-registered dealer of liquors. On his sales in the Philippines, his tax is: A. Excise tax C. Percentage tax B. Value-added tax D. None of these 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 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. 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 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 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. A. Both statements are correct 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%. A. Both statements are correct 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 valuevalue 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. A. Both statements are correct 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 valueadded 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 Sales return and allowances Sales discount Purchases of: Goods for sale, from VAT-registered persons Goods for sale, from non-VAT registered persons Services, from VAT-registered persons Equipment (life of 10 years) from VAT-registered person Importation of goods for sale: Invoice cost, country of origin Freight Insurance Customs duty Excise tax
P 896 000 56 000 22 400 224 000 56 000 21 280 112 000 20 000 500 200 600 100
Other expenses prior to removal from customs custody Other expenses after removal from customs custody Operating expenses
300 250 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 (valueadded 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 valueadded 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 B. P 170 000
C. P 120 000 D. None
TAX.M-1404 OTHER PERCENTAGE TAX
Q1: Which of the following statements is incorrect? A. B. C. D.
The percentage tax is basically on sale of services. The percentage tax may be imposed on a sale of goods. The percentage tax may be imposed together with the value-added tax. The percentage tax may be imposed together with excise tax.
Q2: 1. 2. 3. 4.
BUSINESS Barbershop Restaurant Department store Lodging house
VAT REGISTRATION VAT registered Not VAT registered VAT registered Not VAT registered
ANNUAL SALES P 800 000 800 000 2 700 000 2 800 000
5. Rice retailer 6. Fertilizer distributor
Not VAT registered Not VAT registered
2 650 000 2 500 000
Which of the above establishments are not subject to VAT? A. 2, 4 and 5 B. 2 and 6 only
C. 1, 2 and 5 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 Motel business (amounts are exclusive of tax): Gross receipts from business (VAT registered) Discounts Purchases: From VAT-registered suppliers From non-VAT suppliers Business expenses (60% VAT) Practice of profession (not VAT-registered): Gross receipts Purchases From VAT registered sellers From non-VAT sellers Expenses- profession
P 20 000 250 000 25 000 28 000 27 500 25 000 47 500 21 200 18 000 24 000
1. The VAT payable isA. P 2 640 C. P 3 480 B. 3 336 D. 21 840 2. The percentage tax payable isA. 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 isA. P 4 026.9 B. 4 513.5
C. P 4 516.5 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 Receipts from cargoes Expenses for repair of transport units (VAT) Salaries of personnel Purchase of spare parts
P 2 000 000 500 000 30 000 300 000 60 000
Registration with LTO Premiums on insurance per unit
10 000 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 taxA. B. C. D.
12% value-added tax and ordinary income tax on gross receipts within the Philippines. 0% VAT and 2.5% income tax on gross receipts within the Philippines. 3% other percentage tax on gross receipts 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 Ksar Corporation Gen Corporation
P 360 000 4 800 000 8 250 000
How much is the total franchise tax on Socsksargen Group of Companies? A. P 106 800 B. 175 800
C. P 345 500 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 Penalties imposed and collected on illegal connections Rent of its heavy equipment to a private subdivision developer Sale of scrap materials
P 3 000 000 150 000 50 000 20 000
The franchise tax isA. P 61 400 B. 60 400
C. P 60 000 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 Gross receipts during the month Payment to VAT suppliers of goods and services Payment to non-VAT suppliers of goods and services
P 8 000 000 700 000 300 000 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. B. C. D.
VAT on both services Overseas communications tax on both services VAT on domestic calls and overseas communications tax on overseas calls. Franchise tax on both services
Q12: Which of the following percentage taxes is not n ot payable on or before the 20th day after the close of the month? A. Franchise tax B. Overseas communications tax
C. common carrier’s 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 receiver) Outgoing overseas calls Domestic long-distance calls Monthly bills on subscribers
P 4 300 9 350 1 200 525
The overseas communication tax on Telly Babad isA. P 1 280.00 B. 1 452.50
C. P 850.00 D. 871.50
Q14: Filipinas Life Insurance Company had the following data on collections of premiums and disbursements during the month: Cash collections Checks Accounts receivable Payments of expenses to VAT businesses Payments of expenses to non-VAT businesses
Life insurance P 150 000 45 000 25 200
Non-life insurance P 145 700 34 600 58 900 43 000 35 000
The amounts indicated pertaining to VAT transactions do not include the value-added tax. 1. The premium tax due is-
A. P 11 010 B. 14 785 2. The VAT payable isA. P 17 484 B. 12 324
C. P 9 750 D. 3 900 C. P 16 476 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 Premium on non-life insurance Gross receipts as agent of a foreign insurance company: Premium on non-life insurance Premium on property insurance
P 2 100 000 1 500 000 4 000 000 1 000 000
Percentage tax due for the month isA. P 355 000 B. 542 000
C. P 605 000 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 Radio and television rights Advertisement inside the Big Dome Sale by canteen inside the Big Dome maintained by the Big Dome Ambulant vendors also provided by the company had a gross receipts of Expenses for the maintenance
P 2 000 000 1 000 000 150 000 500 000 75 000 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 isA. P 558 750 B. 933 750
C. P 1 008 750 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 isA. P 76 500 B. 45 000
C. P 121 500 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 Collections during the period of: Revenues of prior periods Revenues of the current period Revenues of the succeeding period (advances) 1. The business tax if a domestic common passengers: A. P 12 000 B. 9 000 2. The business tax if a night club: A. P 54 000 B. 64 800 3. The business tax if a race track: A. P 120 000 B. 228 000
P 400 000 50 000 300 000 10 000
carrier by land for the transport of C. P 10 800 D. 22 800 C. 72 000 D. 136 800 C. P 90 000 D. 108 000
Q20: A horseracing aficionado has the following winnings during a particular race day: Total winnings Cost of winning tickets
P 10 000 500
The tax on winnings is: A. P 1 000 B. 400
C. P 950 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 B. Publicly held corporation
C. Foreign corporation D. domestic corporation
Q22: Yveth sold the following shares of stocks of a domestic corporations, thru her broker. Stocks of A Corporation Stocks of B Corporation
Cost P 100 000 350 000
Selling Price P 180 000 320 000
Date of Sale 10-03-12 10-20-12
The total percentage tax if the stocks are: Listed & traded Not listed & traded A. B. C. D.
P 2 500 2 250 2 500 2 250
P 8 000 5 000 None 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. B. C. D.
The purchaser of shares of stock offered in the IPO The corporate issuer The corporate purchaser 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 fromA. 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 beA. 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 B. P 7 500 percentage tax
C. P 45 000 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 B. 6 000; 9 900
C. 6 000; 9 200 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 (remaining maturity of instrument is 5 years) Income from financial leasing (remaining maturity of instrument is more than 5 years) Dividends and equity shares in net income of subsidiaries Rentals of properties Net trading gains within the taxable year on foreign currency
P 5 000 000 3 000 000 1 000 000 500 000 300 000
How much is the gross receipts tax? A. P 386 000 B. 250 000
C. 336 000 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 B. 1 350
C. 4 500 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 Sales during the quarter Accounts receivable, end of quarter Purchase of supplies, total invoice amount
P 50 000 100 000 75 000 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 2 000 000 500 000 Gross receipts, use of radio station’s communication facilities 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. A. Both statements are correct C. only the first statement is correct 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 paid p aid for every winning ticket after deducting the cost of the ticket. A. Both statements are correct C. only the first statement is correct B. Both statements are incorrect D. only the second statement is correct 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 valueadded tax. A. Both statements are correct C. only the first statement is correct B. Both statements are incorrect D. only the second statement is correct 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. A. Both statements are correct C. only the first statement is correct B. Both statements are incorrect D. only the second statement is correct 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. A. Both statements are correct C. only the first statement is correct B. Both statements are incorrect D. only the second statement is correct 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 on o 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. A. Both statements are correct B. Both statements are incorrect
C. only the first statement is correct D. only the second statement is correct
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. A. Both statements are correct C. only the first statement is correct B. Both statements are incorrect D. only the second statement is correct
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. A. Both statements are correct C. only the first statement is correct B. Both statements are incorrect D. only the second statement is correct 45. The lease of property, real or personal, by b y a bank is subject toto A. 7% gross receipts tax C. 12% VAT B. 5% gross receipts tax D. 1% gross receipts tax
