CONTP Quiz Bee (18 March 2022)

As the Philippine economy gradually reopened in the fourth quarter of 2021, foreign investment pledges in the country soared by 71%, with _______ as the top source of approved foreign investment pledges. Investment commitments from ______ account for around 41.7% of the total pledges in 2021.

• Singapore

• Japan

• China

• Malaysia

TRUE or FALSE

Under the recently issued Revenue Memorandum Circular No. 19-2022 which provides clarifications and guidelines for tax free exchanges transactions, the Certificate Authorizing Registration covering the transfer of multiple real properties and/or share of stocks situated in various locations and covered by different RDOs, shall now be processed with the RDO having jurisdiction over the place where the transferor corporation is registered.

• TRUE

• FALSE

During 2021, net inflows of foreign direct investments in the Philippines reached an all-time high of USD10.518 billion, reflecting the improvement in investor sentiment as the global economy rebounded from the lows of 2020. The following factors were vital in helping the Country derive a net inflow position in 2021, except:

• Investments in debt instruments

• Foreign Direct Investments in equity capital

• Reinvestment of earnings

• Membership on the Regional Comprehensive Economic Partnership -- the world's biggest free trade agreement.

The Philippine government believes that the local economy would likely be “collateral damage” to the Russia-Ukraine crisis, raising prices in several sectors and pushing up inflation. After easing to 3% in February, experts believe that inflation in the Philippines could spike over the coming months to anywhere between ____%.

• 6.8% to 7.2%

• 4.7% to 5.4%

• 5.5% to 6%

• 6.1% to 6.7%

All of the following are among the Philippine government's gameplan to address inflation except:

• Spend and borrow big to immediately shore up the economy and support the poor

• Lowering tariff rates and removing non-tariff barriers for certain agricultural products

• Expanding the supply of coal and temporarily removing the commodity’s most favored nation tariff rate

• Opening the entire country to Alert Level 1 alongside the opening schools for face-to-face learning

Which of the following is not among the five (5) comparability factors to be considered for ensuring comparability between the related party transaction and the internal comparable selected?

• Characteristics of goods and services

• Business strategies

• Economic circumstances

• None of the above

TRUE or FALSE

If, during a tax audit, the BIR finds that the relevant conditions of the controlled transactions (e.g., price or margin) fall outside the arm's length range asserted by the BIR, the BIR can then already determine the point within the arm's length range to which it will adjust the conditions of the controlled transaction.

• TRUE

• FALSE

TRUE or FALSE

In determining an arm's length price during a tax audit, the Revenue Officer may disregard and recharacterize a controlled transaction where the economic substance of a transaction differs from its form.

• TRUE

• FALSE

After performing comparability analysis, comparison of the prices of goods or services in related party transactions and the prices of goods or services in independent transactions can be done.

Under the Comparable Uncontrolled Price method, the two ways to compare prices of goods or services are:

• Internal and External

• Pooled and Weighted

• Direct and Indirect

• Adjusted and Unadjusted

This is the transfer pricing method which focuses on the gross mark-up obtained by a supplier who transfers property or provides services to a related purchaser. Essentially, this method attempts to value the functions performed by the supplier of the property or services. This method is most useful where semi-finished goods are sold between associated enterprises or where the controlled transaction involves the provision of services.

• Comparable Uncontrolled Price Method

• Resale Price Method

• Cost Plus Method

• Transactional Net Margin Method