TAXATION FINALS LCC

1. Which is correct with regard to final income taxation?

• a. It covers all items of passive income from whatever sources

• b. It applies to all items of gross income of any non-resident earned from sources within the Philippines

• c. Taxpayers need not file an income tax return

• d. It applies to passive income earned abroad

2. Which statement is correct regarding final income tax?

• a. Items if income subjected to final tax can still be subjected to regular tax

• b. Items of income exempt under final tax are subject to regular tax

• c. Final income tax applies to all passive income from Philippines sources

• d. Final tax applies inly on certain passive income earned within the Philippines

3. Interest income from which of the following sources is subject to final income tax?

• a. Lending

• b. Mortgage loans

• c. Money market placements

• d. Bond investments

4. The final tax does not apply to interest on (select the best answer)

• a. Long-term deposit

• b. Promissory notes

• c. Deposit substitute

• d. Trust funds

5. The tax exemption on final tax on interest from long-term deposit is not applicable to

• a. Corporations

• b. Citizens

• c. Residents

• d. All of these

6. Which interest income is not subject to any income tax ?

• a. Interest income from discount notes

• b. Interest income from bonds issued by a bank

• c. Imputed interest

• d. Interest income from deposit substitute

7. The final tax rates on pre-termination of long-term deposits is not relevant to

• a. Any corporations

• b. Resident citizens

• c. Resident aliens

• d. Non-resident citizens

8. Which of the following is subject to 7 1/2% final tax on interest from foreign currency deposits made with Philippine banks?

• a. Resident aliens

• b. Non-resident corporation

• c. Non-resident alien engaged in trade or business

• d. Non-resident alien not engaged in trade or business

9. The following are subject to final tax on all income from sources within the Philippines. Which is the exception?

• a. Non-resident foreign corporation

• b. Non-resident alien engaged in trade or business

• c. Non-resident alien not engaged in trade or business

• d. None of these

10. The interest income from long-term peso deposits made with foreign banks is

• a. Subject to 20% final tax

• b. Exempt from any tax

• c. Subject to regular tax

• d. None of these