WorksheetsCONTP Quiz Bee (18 March 2022)
Total questions: 20
Worksheet time: 15mins
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
In relation to mergers & acquisitions, which of the following statements is/are true:
A merger is a reorganization of 2 or more corporations that results in their consolidation into a single corporation, which is one of the constituent corporations.
In a share deal transaction, the buyer of the shares inherits the legacy issues (e.g., pending cases, outstanding liabilities etc.), while preserving the tax assets (i.e., CWTs, input VAT, NOLCO)
In an asset deal transaction, the buyer of the assets inherits only the liabilities related to the specific assets it acquired (e.g., mortgages, liens, etc.) while tax assets do not transfer to the Buyer
All of the Above
Currently, in sale of shares of stocks not traded through the stock exchange, which of the following statements is/are true:
The net capital gains realized during the taxable year shall be subject to a final tax rate which varies depending on whether the entity is a Domestic Corporation or a Foreign Corporation
The net capital gains realized during the taxable year shall be subject to a final tax of 5% if not over ₱100,000.00 or 10% on any amount in excess of ₱100,000.00;
The net capital gains realized during the taxable year shall be subject to a final tax of 15%
None of the Above
In determining the FMV of the shares sold in a sale of shares of stock, which of the following statements is false?
For common shares, the FMV shall be the book value (BV) per latest AFS prior to the date of sale (but not earlier than the immediately preceding taxable year)
For preferred shares, the liquidation value (LV) which is equal to the redemption price as of balance sheet date nearest to transaction date, including any premium or cumulative preferred dividends in arrears
If there are both common and preferred shares, deduct the LV of the preferred shares from the total equity and divide the balance by the outstanding common shares
BV of the common shares or LV of the preferred shares shall be adjusted to include any appraisal surplus from any property of the corporation not reflected in the latest AFS.
San Miguel Corporation (SMC) is a company listed and traded through the stock exchange. If the SMC shares are sold today through the stock exchange (other than the sale by a dealer in securities), which of the following statements is/are true?
The transaction will be subject to the 1/2 of 1% Stock Transaction Tax (STT) and 0.75% DST on the value of the shares
The transaction will be subject to the 0.6% STT and and 0.75% DST on the value of the shares
The transaction will be subject to the 1/2 of 1% STT and it shall be exempt from DST
The transaction will be subject to the 0.6% STT and it shall be exempt from DST
In a transfer of property pursuant to Section 40(C)(2) of the Tax Code, where property is transferred to a corporation by a person, alone or together with others, not exceeding four (4) persons, in exchange for stock resulting in the transferor(s) collectively gaining control of the said corporation, which of the following statements is/are true?
The property transfer shall be exempt from VAT and DST and the original issuance of shares in exchange for the property received shall be subject to 1% DST
The property transfer shall be exempt from VAT and subject to 1.5% DST, while the original issuance of shares in exchange for the property received is subject to 1% DST
The property transfer shall be exempt from VAT and DST
The property transfer shall be subject to 12% VAT and 1.5% DST
Revenue Regulations 21-2021 (RR 21-2021) provided additional guidance on the VAT zero-rating of local purchases of goods and services by Registered Business Enterprises (RBEs) enjoying incentives. Which of the following statements is/are true?
VAT zero-rating on local purchases is to be enjoyed by the RBEs coterminous with their income tax incentives, which can run for a maximum of 17 years from the date of registration, unless otherwise extended under the Strategic Investment Priority Plan (SIPP).
Zero-rating for existing registered export enterprises located inside ecozones & freeport zones are qualified for VAT zero-rating until the expiration of the transitory period.
All of the above
None of the above
True or False: To qualify for VAT zero-rating under RR 21-2021, the purchase must be directly used in the registered project. This means that the purchases and other expenditures must be necessary for the registered project or activity without which the registered project or activity can be carried out.
TRUE
FALSE
Fill in the blanks: RR 21-2021 covers transactions entered into during the ________ and onwards, and takes effect immediately following its publication on ________in the Manila Times newspaper.
4th quarter of Taxable Year 2021; December 10, 2021
4th quarter of Taxable Year 2021; November 10, 2021
3rd quarter of Taxable Year 2021; December 10, 2021
3rd quarter of Taxable Year 2021; November 10, 2021
In the conduct of an audit, which of the following statements is/are true:
A revenue district officer (RO) or a subordinate official may issue a memorandum of assignment, referral memorandum, or such equivalent document to a new revenue officer for the continuation of the audit or investigation.
An RO not specifically named or authorized in a LoA may still conduct the audit if the original RO authorized to do so has been reassigned or transferred to another case or place of assignment, or has retired, resigned or otherwise removed.
All of the above
None of the above
Fill in the blanks. Retail trade was previously exclusively limited to Filipino citizens or entities until year 2000 when the Retail Trade Liberalization Act was passed. While the law opened the retail market to foreign retailers, it imposed high capital requirements from ________ depending on the category of the foreign retailer. The recently passed RA 11595 did away with the above categories and simply required that a foreign entity have a minimum paid-up capital of ________.
USD 150,000-3 Million;
PHP 15 million;
USD 150,000-3 Million;
PHP 25 million;
USD 250,000-2.5 Million;
PHP 15 million;
USD 250,000-2.5 Million;
PHP 25 million;
