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WorksheetsTaxation Multiple Choice Questions
Total questions: 47
Worksheet time: 2hrs 53mins
The test in determining whether interest income is classified as “income within” or “income without” is the:
Residence of the debtor
Residence of the creditor
Place where the contract is signed
Place where the creditor resides
The test in determining whether dividend income is classified as “income within” or “income without” is the:
Place of payment of dividend
Citizenship of the stockholder
Place where the corporation is created or organized
Place of incorporation of the stockholder
The test in determining the situs of royalty income is based on:
Place where the payment is made
Place where the intangible is used
Residence of the licensor
Residence of the licensee
Which of the following is subject to Philippine income tax?
Interest earned on foreign bank deposits by a resident citizen
Salary earned in Singapore by a nonresident citizen
Dividend received by a nonresident alien from a U.S. corporation
Rent income from a building in Vietnam owned by a Filipino citizen
Which of the following does not conform to the sound principles of taxation?
Fiscal adequacy
Theoretical justice
Administrative feasibility
Political expediency
Which of the following statements best describes the nature of taxation?
It is a voluntary contribution by citizens to support government.
It is a contractual obligation enforceable by civil suit.
It is an enforced proportional contribution levied by legislative authority.
It is a penalty for non-performance of public duties.
Which of the following is not a constitutional limitation on taxation?
Uniformity of taxation
Progressivity of taxation
Territoriality of taxation
Non-imprisonment for non-payment of poll tax
The principle of territoriality in taxation means that:
Only income earned within the country is taxable.
Taxes are imposed only within the jurisdiction of the State.
All foreign incomes are exempt.
The statement “Taxes are the lifeblood of the government” means:
Taxes are optional sources of government funds.
The government cannot exist and operate without taxes.
Taxes are penalties imposed on the people.
Taxes are privileges granted by the State.
Which income is taxable in the Philippines?
Rental from a property located in Singapore, owned by a Filipino resident citizen
Interest earned from bank deposits in the Philippines by a nonresident alien
Salary of a Filipino seaman working on a foreign vessel registered abroad
Dividend from a U.S. corporation received by a nonresident citizen
Which among the following is not a natural quality of taxation power?
It is an inherent power.
It is territorial in scope.
It is absolute and unlimited.
It is exercised only by the Executive Department.
Which statement is incorrect?
The State possesses the power to tax inherently.
The Constitution merely limits but does not grant the power to tax.
The power to tax may exist even without express constitutional provision.
The power to tax must be delegated by the United Nations.
Which of the following statements is false?
The power to tax is inherent in sovereignty.
The LGUs exercise delegated power to tax.
Only the national government may impose income tax.
Local taxation must be authorized by Congress.
Which of the following purposes is not public in nature?
Construction of public schools
Rehabilitation of disaster-affected areas
Building a private villa for a government official
Development of public roads
Which statement is incorrect about the nature of taxation?
Taxation is an absolute power.
Taxation is subject to constitutional limits.
Taxation must be exercised for public purposes.
Taxation should promote social justice.
Which of the following is not a valid justification of taxation?
It is the lifeblood of the government.
It is necessary for the existence of the State.
It is a voluntary contribution to government.
It is based on the benefits received principle.
Which statement is not correct?
Local governments have delegated taxing power.
The national government exercises inherent taxing power.
Judicial branch interprets tax laws.
Executive branch creates tax laws.
The following may be subject of taxation, except:
Persons
Properties
Rights
Opinions
Which of the following is not an inherent limitation on taxation?
Public purpose
Territoriality
Uniformity
International comity
A legitimate way of reducing tax liability within the bounds of law is:
Tax evasion
Tax avoidance
Tax suppression
Tax concealment
Which description of taxation is incorrect?
It is necessary and for public use.
It is absolute and uncontrolled.
It is legislative in nature.
It is subject to constitutional limitations.
Statement 1: Government performing governmental functions is taxable only if expressly provided by law. Statement 2: GOCCs performing proprietary functions are taxable unless expressly exempt.
Only Statement 1 is correct.
Only Statement 2 is correct.
Both are correct.
Both are incorrect.
The rule that one State cannot tax another’s property is known as:
Reciprocity
International comity
Territoriality
Uniformity
A taxpayer refuses to pay tax claiming that he receives no direct benefit. The reason is:
Acceptable because of equal protection.
Not acceptable because taxation is not based on direct benefit.
Acceptable because taxes are voluntary.
Not acceptable because he is a government employee.
Which is not a constitutional limitation on the power to tax?
Taxes must be uniform and equitable.
Taxes must be for public purpose.
Taxes must not be confiscatory.
Only the judiciary may impose taxes.
Which individuals are taxable only on income from within the Philippines?
Resident citizens
Nonresident citizens and nonresident aliens
Resident citizens and resident aliens
All citizens regardless of residence
Characteristics of a valid tax include all, except:
Imposed by the legislature
For public purpose
Voluntary contribution
Proportionate in character
Which tax rate increases as the taxable base increases?
Progressive
Proportionate
Regressive
Digressive
Which statement best distinguishes police power from taxation?
Police power is for regulation; taxation is for revenue.
Both involve property taking for compensation.
Taxation has no constitutional limits.
Police power applies only to income tax.
Police power differs from taxation because:
Police power requires payment of tax.
The benefit derived is the regulation and protection by the State.
Which of the following statements is not true about double taxation?
It involves taxing the same taxpayer twice for the same purpose and period.
It is expressly prohibited by the Constitution.
Indirect double taxation may be allowed.
It may be avoided through tax treaties.
Deductions and exemptions under tax law are construed:
Strictly against the taxpayer
Liberally in favor of the taxpayer
Neutrally and equitably
Strictly against the government
When tax law conflicts with GAAP, the rule is that:
GAAP prevails
Tax law prevails
The BIR decides which applies
The taxpayer may choose either
A resident citizen is taxable on:
Income from sources within only
Income from sources without only
Income from within and without the Philippines
Income from foreign employment only
A Japanese engineer working in the Philippines for 4 months on a specific project is classified as:
Resident alien
Nonresident alien engaged in trade or business
Nonresident alien not engaged in trade or business
Resident citizen
Which tax rate decreases as the taxable base increases?
Progressive
Regressive
Proportionate
Digressive
Statement 1: Taxpayers may legally refuse to pay tax if they receive no direct benefit. Statement 2: Taxpayers may question illegal use of public funds.
Only Statement 1 is correct.
Only Statement 2 is correct.
Both are correct.
Both are incorrect.
Compute for the final income tax due given the following scenarios on passive income.
Mark, RC, has the following data on his passive income the current year:
Interest income from long term deposits pre-terminated on its 4th year:
P35,000
Type your answer using this format
_________%; Amount of final tax
Compute for the final income tax due given the following scenarios on passive income.
Mark, RC, has the following data on his passive income the current year:
Interest Income from Foreign Currency Deposit System:
P40,000
Type your answer using this format
_________%; Amount of final tax
Compute for the final income tax due given the following scenarios on passive income.
Mark, RC, has the following data on his passive income the current year:
Royalties:
P20,000
Type your answer using this format
_________%; Amount of final tax
Compute for the final income tax due given the following scenarios on passive income.
Mark, RC, has the following data on his passive income the current year:
Royalties from song compositions:
P20,000
Type your answer using this format
_________%; Amount of final tax
Compute for the final income tax due given the following scenarios on passive income.
Mark, RC, has the following data on his passive income the current year:
Winnings from an e-raffle during Smart Communication’s 50th Anniversary (chosen randomly):
P10,000
Type your answer using this format
_________%; Amount of final tax
Compute for the final income tax due given the following scenarios on passive income.
Mark, RC, has the following data on his passive income the current year:
Dividend income from domestic corporation:
P37,000
Type your answer using this format
_________%; Amount of final tax
Compute for the final income tax due given the following scenarios on passive income.
Mark, RC, has the following data on his passive income the current year:
Prizes from barangay singing contest:
P10,000
Type your answer using this format
_________%; Amount of final tax
Compute for the final income tax due given the following scenarios on passive income.
Mark, RC, has the following data on his passive income the current year:
Winnings from PCSO lotto winnings:
P15,000
Type your answer using this format
_________%; Amount of final tax
Mr. X provided the following information in 2019:
Gross business income, Philippines ------------------------------------------------P 3,500,000
Gross business income, Mexico -------------------------------------------------------2,500,000
Gross business income, Hongkong ---------------------------------------------------1,400,000
Business expenses, Philippines --------------------------------------------------------1,800,000
Business expenses, Mexico ------------------------------------------------------------1,000,000
Business expenses, Hongkong ----------------------------------------------------------800,000
Compute for the following:
Determine the taxable income if the taxpayer is:
1. Resident Citizen
2. Resident Alien
3. Non Resident Citizen
4. Non-Resident Alien
