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WorksheetsRB10
Total questions: 70
Worksheet time: 36mins
Which of the following is NOT a principle of a sound tax system?
Fiscal adequacy
Administrative feasibility
Theoretical justice
Political neutrality
Mr. A, a minimum-wage earner, is exempt from income tax. Mr. B, earning ₱500,000 annually, is subject to income tax at graduated rates. This situation demonstrates:
Administrative feasibility
Fiscal adequacy
Theoretical justice
Uniformity in taxation
The “non-impairment clause” of the Constitution may be limited by which power of the state?
Police power
Taxation
Eminent domain
Judicial review
The government required Juan to vacate his property to construct a public highway, with just compensation paid. Which power is exercised?
Eminent domain
Taxation
Police power
Regulation
Maria filed a taxpayer’s suit to stop the government from using public funds for a private project. For her case to prosper, she must prove
She is a registered voter
She has sufficient interest as taxpayer
She will benefit personally from the case outcome
That the President approved the project
Juan, a taxpayer, lawfully used government tax incentives to reduce his tax liability. This is an example of:
Tax avoidance
Tax evasion
Double taxation
Escape through fraud
Which situation below does NOT constitute direct double taxation?
A taxpayer subject to real property tax by a city and also subject to income tax on the rental income derived from the same property.
A taxpayer paying business tax to the province and another business tax to the city on the same subject matter.
A taxpayer being assessed twice for income tax on the same taxable income by the BIR in the same year.
A taxpayer being assessed for both VAT and percentage tax on the same transaction by the BIR.
Mr. D, a non-resident foreigner, was taxed by the Philippine government on his property located in Tokyo. Which principle is violated?
International comity
Territorial jurisdiction
Public purpose
Lifeblood doctrine
Which of the following statements about collection of taxes is TRUE?
In case of failure to file, BIR may collect within 10 years from discovery.
Collection can be made without prior assessment in all cases.
Ordinary collection prescribes in 3 years from filing of the return.
No prescriptive period for collection.
A taxpayer who disagrees with the Final Decision on Disputed Assessment (FDDA) may appeal to the CTA within:
30 days
15 days
60 days
180 days
Which of the following is NOT a remedy of the government in collecting taxes?
Compromise of criminal tax cases
Distraint of personal property
Levy on real property
Filing of a civil case in court
The prescriptive period for filing a claim for refund or tax credit is:
2 years from date of payment
3 years from date of filing return
5 years from date of payment
10 years from discovery
Which of the following is considered a valid protest against assessment?
Oral request
Letter of protest without factual/legal basis
Administrative appeal with supporting evidence
Refusal to pay taxes
The collection of internal revenue taxes is enforceable by:
The BIR only
Local government units only
Either BIR or LGU
The Commissioner of Customs
A Final Assessment Notice was received by a taxpayer on June 1, 2025. The protest must be filed not later than:
July 1, 2025
June 30, 2025
July 31, 2025
August 31, 2025
A taxpayer filed a protest in the form of Reconsideration on July 1, 2025. BIR failed to act until September 15, 2025. The taxpayer:
May appeal to CTA until January 27, 2026
May wait indefinitely for CIR action
Should have appealed to CTA within 30 days from July 1, 2025
May appeal to CTA within 30 days from September 15, 2025
The tax rate on cash dividends received by a resident alien from a domestic corporation is:
10%
15%
20%
25%
Which is considered taxable income?
Winnings from lottery amounting to ₱15,000
13th month pay not exceeding ₱90,000
Damages received for personal injury
Life insurance proceeds received by heirs
An individual with mixed income (compensation + business income) must file:
Annual income tax return
No return (covered by substituted filing)
VAT return only
Percentage tax return only
Which is considered allowable deduction?
Interest expense incurred in business
Depreciation expense on motor vehicle purchased by company for the use of its CEO, cost of motor vehicle is ₱3.5M
Facilitation fees paid to government officials to facilitate business permit
Premiums on life insurance when taxpayer is beneficiary
Which of the following income is exempt from final withholding tax?
Interest from customer borrowing
Interest income from foreign currency deposit units (FCDUs)
Interest income from long-term deposits held for 5 years
Royalties from books and music
Which statement is correct about estates and trusts?
Estates and trusts are taxed as individuals
Estates are taxable; trusts are not
Trusts are taxable; estates are not
Both estates and trusts are exempt from income tax
Which income is subject to 8% optional tax under TRAIN Law?
Corporate income
Business income not exceeding ₱3M gross sales/receipts
Mixed Income (compensation + business income)
Business income not exceeding ₱3M gross sales/receipts and Mixed Income (compensation + business income)
Which of the following is subject to 25% final tax rate under CREATE?
Non-resident foreign corporations not engaged in trade or business in the Philippines
Resident foreign corporations on Philippine-sourced income
Domestic corporations on worldwide income
Non-stock, non-profit educational institutions
A resident citizen earned: salary ₱400,000; rental ₱200,000; interest income from bank deposits ₱50,000. Compute taxable income reportable by the resident citizen.
600,000
650,000
550,000
400,000
Which of the following taxpayers cannot avail of OSD?
Non-resident foreign corporations
Domestic corporations
Resident foreign corporations
Self-employed individuals
XYZ Corp. (domestic) reported the following for 2025, its 5th year of operations:
● Gross income: ₱15,000,000
● Taxable net income: ₱1,000,000
How much is the corporation’s income tax due?
300,000
200,000
250,000
3,500,000
SME corporation reported a net income of P3,000,000 after the following:
● Dividend of P100,000 from a domestic corporation
● Interest income from deposits, P50,000 deduct REO CPA Review deduct
● Bad debt expense, P100,000
● Forex loss on decrease of foreign receivables, P200,000
● Gain on increase in value of investment in stocks, P300,000
● Gain on sale of stocks listed in the PSE, P500,000
● Interest expense from loans, P200,000
● Donation to a public school under the Adopt-a-school program, P200,000
Compute the tax due.
P450,000
P470,000
P452,000
P565,000
An individual taxpayer is projected to make P500,000 from projected gross receipts of P2.5M for the upcoming year. What is the best tax option to adopt?
Avail of regular income tax using itemized deductions.
Avail of regular income tax using optional standard deductions.
Avail of 8% commuted income tax.
The taxpayer may adopt what he wants as tax rules may vary anytime.
Mr. Lee, a Filipino resident citizen, earned the following in 2024:
● Compensation income in the Philippines: ₱1,200,000
● Income from investments in the U.S.A.: ₱300,000 (with U.S. tax paid = ₱60,000)
How much is the income tax due and payable assuming Lee opted to use the U.S. tax paid as credit?
₱222,000
₱217,500
₱202,500
₱277,500
Which is NOT a characteristic of succession?
Transmission while decedent is alive
Mode of acquisition
Transmission by virtue of death
May occur by will or by law
Which of the following is a legal exclusion from the gross estate?
GSIS and SSS benefits
Donation mortis causa
Life insurance proceeds with estate as beneficiary
Revocable transfers
Estate tax is imposed on _.
the transfer of properties by the decedent to the heirs, legatees, or devisees
the duration of the life of the decedent
the making of the will of a decedent
the death of the decedent
34. Which is deductible by a non-resident alien?
Funeral expenses
Transfer for public use
Family home
Medical expenses
Mr. Jose married Josephine on February 2, 1988. Josephine died on February 14, 2019. On that date, the spouses had the following properties:
P7,200,000
P8,000,000
P5,200,000
P6,400,000
A decedent died leaving an estate with the following properties and deductions:
P800,000
P650,000
P1,650,000
P2,000,000
Alicia, single, died on January 1, 2025. No inventory was prepared immediately. Two months later, an inventory showed that at that time the estate was valued at ₱2,430,000. From January 1 up to the date of inventory, the estate earned ₱367,000 income, and the following expenses were incurred and paid by the estate: ₱442,000 for funeral expenses and ₱180,000 for family support.
How much should be declared as the gross estate?
₱2,175,000
₱2,430,000
₱2,505,000
₱2,685,000
Which of the following statements is most correct?
Statement 1. In all cases, void donations are not subject to donor’s tax.
Statement 2. Every donation between the spouses during the marriage shall be void.
Statement 3. The rule of reciprocity is applicable only to the intangible properties owned by a nonresident alien if the said properties are situated outside the Philippines.
Statement 1 only.
Statement 2 only.
Statement 3 only.
All of the above
Which of the following examples is not taxable?
A and B are the only heirs of C. A renounces his share of inheritance in favor of B.
Mr. Ramos, a multi-millionaire, gives his wife a diamond ring worth P300,000 as a birthday gift.
On June 12, 2019, A made a gift of P500,000 to his daughter on account of her marriage celebrated May 1, 2018.
A Filipino citizen donated a parcel of land located in the United States to B, a non-resident alien.
Which of the following donations result to a net gift of P80,000?
Mary requested Anna to pay Mary’s liability with Ella in the amount of P100,000 and in return, the personal property of Mary valued at P180,000 will be donated to Anna.
Alex donated property to Liam with a market value of P140,000 The property is subject to a mortgage indebtedness of P60,000 which was paid by the donor at the time of the donation.
The daughter of Arlene was married to her boyfriend. As a gift, Arlene donated cash worth P100,000 to her daughter.
Property worth P80,000 was donated by Jupiter to Barangay Maaliwalas for use as site of the Barangay Hall.
Amie made the following donations to Betty.
500,000 - Fair market value of land, with an unpaid mortgage of P200,000, 50% of which shall be assumed by Betty
600,000 - Car, with an agreement that the tax of P36,000 on the donation shall be assumed by Betty
The net gift on the donation is-
830,000
934,000
1,000,000
1,100,000
Henry, an unmarried Filipino, died leaving the following to his mother who lived with him prior his death:
P3,500,000
P2,400,000
P12,900,000
P11,500,000
You were presented the following for your perusal:
Statement 1: A sale of timber to a lumberyard by an owner of a timberland is subject to value-added tax.
Statement 2: A sale of "tinapa" by its producer is subject to value-added tax if the seller-producer is earning annual gross sales of more than P3,000,000.
Statement 3: A sale of a goldfish by a petshop is subject to value-added tax, while a sale of fresh tilapia in the market is exempt.
Statement 4: A sale of live chicken by an agricultural contract grower to Magnolia Corporation (its supplier of feeds) is subject to value-added tax.
Only statement 1 and 2 are true.
Only statement 2 and 3 are true.
Only statement 1 and 3 are true.
Only statement 3 and 4 are true.
Three of the following are exempt from value-added tax. Which is the exception?
Receipts from leasing of real properties
Sales of medicines to in-patients of a hospital.
Services rendered by persons subject to percentage tax.
Export sales by persons who are not value-added tax registered
Which of the following services is not subject to VAT?
Gross receipts of international air or shipping carriers doing business in the Philippines derived from transport of passengers and cargo from the Philippines to another country.
Services rendered to persons engaged exclusively in international shipping or air transport operations, including leases of property for use thereof Provided, that these services shall be exclusively for international shipping or air transport operations
Services made to international common carriers by air and sea relative to their transport of passengers, goods or cargoes from one place in the Philippines to another place in the Philippines.
Transport of passengers and cargo by domestic air or sea vessels from the Philippines to a foreign country.
Santino, rents his 20 residential unite for P16,000 per month. During taxable year 2024, his accumulated gross receipts amounted to P3,840,000. He is subject to
VAT 1% Percentage Tax
Yes Yes
Yes No
No Yes
No No
Arlene is a real estate dealer. During the month of November 2024, she sold three (3) lots under the following terms:
All amounts indicated above do not include the tax. Assuming VAT registered, how much is the output tax on the November 5 collection?
3,000
6,000
30,000
None
Sweet Co., a manufacturer of refined sugar, became subject to VAT effective December 1 of the current year. During the month, the following are its data:
The presumptive input tax is _
14,000
13,860
5,250
35,000
Using the same data below, the transitional input tax is _.
3,506.25
2,998.00
2,975.00
654.50
Classic Company operates a VAT business and a non-VAT business. During the month, its books revealed the following record of sales and purchases:
18,060
13,500
7,660
6,060
Data during the second quarter:
6,100
8,500
16,000
None
International carriers subject to 3% tax are taxed on:
Passenger fares from the Philippines
Cargo transport from PH to abroad
Domestic passenger transport
Inbound freight
Amusement tax on cockpits is:
18%
15%
10%
30%
Tax on horse race winnings (ordinary dividends to bettors) is:
10%
4%
5%
12%
Petroleum products are subject to excise tax that is:
Specific (per liter)
Ad valorem
Percentage-based
None
ABC Aesthetics Clinic performed cosmetic procedures during June 2024 for the following selling price:
● Liposuction (purely aesthetic) – ₱800,000
● Reconstructive surgery after accident – ₱200,000 The clinic is VAT-registered.
Compute the excise tax.
40,000
25,000
30,000
50,000
A residenttial condominium unit in Makati was sold on March 20, 2022 in a pacto de retro sale for P2,100,000 Market value in the tax declaration is P2,155,600 while the zonal value is P1,890,200 The documentary stamp tax due is _.
32,340
21,556
32,325
32,334
Statement 1: On every original issue, whether on organization, reorganization or for any lawful purpose, of shares of stock by any association, company or corporation, there shall be collected a documentary stamp tax of Two peso (P2.00) on each Two hundred pesos (P200), or fractional part thereof, of the par value, of such shares of stock
Statement 2: An instrument, document or paper which is required by law to be stamped and which has been signed, issued, accepted or transferred without being duly stamped, shall not be recorded, nor shall it or any copy thereof or any record of transfer of the same be admitted or used in evidence in any court until the requisite stamp or stamps are affixed thereto and cancelled.
True, true
False, false
True, false
False, true
A parcel of land located in a residential area in Caloocan City and classified in the tax declaration as industrial is leased and used as commercial. What will be the basis of the city government in assessing the property?
Commercial
Residential
Industrial
Agricultural
The City of Pampanga has an ordinance requiring all businesses that will install or post signboards, billboards, streamers, tarpaulins and other modes of advertisements outside of their establishments and within the territorial jurisdiction of the city shall pay P2.00 per square foot of each advertisement material. Barangay Matigas has also an existing barangay ordinance imposing taxes and fees on advertisements of similar nature. Which of the following statements is correct?
Only the barangay can validly impose and collect such taxes and fees.
Both the city and the barangay can validly impose and collect such taxes and fees.
Only the city can validly impose and collect such taxes and fees.
Neither the city nor the barangay can validly impose and collect such taxes and fees.
A parcel of land located in a province was assessed as commercial with a fair market value of P4,000,000. How much would be the highest possible amount of annual basic real property tax that can be collected from the owner?
20,000
16,000
8,000
40,000
There are several special levies on real property. Which of the following is not one of them?
Transfer tax on transfer of real property ownership
Ad valorem tax on idle land
Special assessment
Special education fund tax
To be entitled to registration under the Investment Priorities Plan, an applicant must satisfy the Board of Investments that the applicant is, except _.
Filipino citizen
It if is a partnership or association, that it is organized under the laws of the Philippines and that at least 60% of its capital is owned or controlled by Filipinos.
If it is a corporation, it is organized under Philippine laws and that at least sixty 60% of the capital stock outstanding and entitled to vote is owned and held by Philippine nationals, and at least 60% of the members of the Board of Directors are citizens of the Philippines.
If it is a corporation, it is organized under Philippine laws and that at least 60% of the authorized capital stock is owned and held by Philippine nationals.
Income tax exemption is granted to BMBEs:
For entire duration as BMBE
None
For 3 years
For 5 years
Are BMBEs exempt from VAT?
Yes if below P3M threshold
Yes, Always
No, always VAT
Only with BIR ruling
BMBE incurred ₱200,000 salaries. Is it required to withhold tax on compensation?
Yes
No
Only if requested
Only if > P1M salaries
A registered Domestic Market Enterprise (DME) opted for 5% SCIT. Is it allowed?
Yes
No
Yes if BOI-registered
Yes if approved by FIRB
An export Registered Business Enterprise in an ecozone, after ITH, chooses SCIT. It reported Gross income earned amounting ₱40M and expenses incurred amounting ₱10M. What is the SCIT due?
2M
1.5M
2.1M
2.8M
The Organization for Economic Co-operation and Development (OECD) Model Tax Convention primarily serves as:
A guideline for negotiating bilateral tax treaties
A legally binding tax code for all member countries
A domestic tax law that overrides national tax codes
A unilateral measure to collect more tax from foreign investors
A PEZA-registered enterprise has the following data for the current taxable year
None of the above
7,500,000
8,250,000
15,000,000
