The prohibition against delegation by the government of the power to tax will still allow the BIR to change the rules in time for the filing of tax returns and the payment of taxes. The power to tax is shared by the legislative and executive branches of government. A tax system where the majority of tax revenue comes from direct taxes.
Power to require proportionate contributions from persons and property to defray the expenses of the government. The tax must be proportional to the relative value of the property to be taxed. Levy or assessment of tax and collection of tax are processes that make up the tax system.
Taxation of a fixed proportion of the amount or value of the property in respect of which the tax is assessed. The manufacturer passes the tax on to the consumer by adding the tax to the selling price of the goods sold;. For the exercise of the power of taxation, the state can tax anything at any time.
Even in the absence of any constitutional provision, the power to tax is vested in Congress as part of the general legislative power.
An alien individual, whether a resident or not of the Philippines, is taxable only on income derived from sources in the Philippines
The President has the right to veto a revenue bill even if Congress has already approved such a bill. The president is superior to Congress, as he can veto any bill, even if Congress has already approved it. An individual citizen of the Philippines who works and receives income from abroad as an overseas contract worker is taxed on income from sources within and outside the Philippines.
A non-resident citizen not engaged in business in the Philippines is treated as a non-resident alien not engaged in business in the Philippines. An alien, whether a resident of the Philippines or not, is liable to tax only on income derived from sources within the Philippines.
In the case of legally separated spouses, additional exemption maybe claimed by the spouses who has custody of the children but shall not exceed four(4) for each
Within the Philippines only B. Without the Philippines only
If legally separated from the spouse, the husband can claim the additional exemption
Taxable income from within the Phils
Widowed mother, who celebrated her 59 th birthday during the taxable year
Married but legally separated individual with a dependent mother who is 59 years old
He has a legally adopted child as a qualified dependent child and paid P3,000 as premium for health and hospitalization insurance. Which of the following individual taxpayers cannot use the permitted deductions for health and hospitalization insurance premiums?
Non-resident alien not engaged in business in the Phil
The number of dependent children who will qualify for additional exemption purposes may not be exceeded. An unmarried or legally divorced man or woman with one or both parents, or with one more sibling, or with one or more legitimate, illegitimate or legally adopted children living with him or her and dependent on him or her is for their main support, where such brothers, or sisters, or children, regardless of age, are incapable of self-maintenance due to mental physical infirmity. Is an individual whose father or mother is an alien engaged in business in the Phil.
Shall come to the Phil. And stay therein for an aggregate period of more than 180 days
If the taxpayer should have additional dependent children during the taxable year, he can
Husband and wife shall be treated as separate taxable units and each shall be allowed to
If any of the qualified dependents turns 21 years of age during the taxable year, the taxpayer can claim the same exemptions as if such dependent had turned 21 years of age at the end of such year. Parents who are with and dependent on the taxpayer for their support, regardless of their age, will qualify as dependents.
An alien who comes in the Phil. For a definite purpose which in its nature may be promptly accomplished
The income tax law of his country to a citizen of the Phil. not residing there or the amount provided by the NIRC to a citizen or resident whichever lower
A dependent child who marries within the year may still qualify as dependent for the year
Regarding the deduction for hospitalization and health insurance premiums, which of the following statements is incorrect.
Allowed as deduction only if the taxpayer is taking itemized deductions from gross income
By either spouse in the case of married individuals
Private cemeteries
Which of the following is classified as Special Corporation subject to preferential corporate income tax rate.
Exempt from the corporate income tax
Exempt from the corporate income tax
Cash dividends received by a domestic corporation from a domestic corporation
Using the previous problem, except that the normal income tax for the fourth quarter is P50,000 (instead of P200,000), the income tax due for the year is. One of the following is not admissible as a basis for discharge by MCIT A. Suits filed by the company. Which is not one of the characteristics of corporate income tax. CPA University, a private educational institution organized in 2000, had the following data for 2007.
CPA Airlines, a resident foreign international carrier, has the following income records for the period. 31, but it chooses to claim the tax paid abroad as a deduction from the gross income, is its income tax. If it is a non-resident lessor of aircraft, machinery and equipment, its income tax.
If it is a resident corporation, but its expenses inside and outside the Philippines are P3M, unallocated (disregarding original data on expenses), its income is taxed. If it is a resident corporation and has remitted 60% of its net profit to its head office abroad, its total tax liability is (Original data). If it is a private educational institution, but P3.5 million of its total gross income is from rental and restaurant business, its income is taxable.
If it is a domestic corporation but the total expenses are P5,800,000 (ignore the original data on expenses), then so is the income tax. Under No. 44, but the domestic company is a non-profit hospital (ignore the tax paid abroad), the income tax is. If the company is a non-equity education company; institution, which uses all its income or income for educational and charitable purposes, its income is also.
In the above problem, if it is registered with PEZA, its total tax liability is 50. In the above problem, if it is registered with PEZA, its total tax liability is. Based on the above problem, its total tax liability if it is a resident corporation is.
Must convert his income from the partnership into cash method B. Must convert his own income into accrual method
If a partner on his own transactions is on the cash method of accounting while the general professional partnership is on the accrual method of accounting, in the partner's determination of his taxable income for the year, he shall.
All partnerships, no matter how created or organized are considered corporations subject to corporate income tax
They are subject to the improperly accumulated earnings tax
Statement-1 The share of the partner in the net income of a PO is added to its gross income. Statement-2 Partner's share of net income in GPP is also considered as passive income.
Partner’s share even if distributed will not be included in their ITR
Marital Status Single Married Head of Family If the partnership is a GPP, the taxable income is C. A withdrew P50,000 from the net income of the partnership for the year, B did not withdraw any amount. Suppose A and B did not split, but instead invested the entire profit in another business enterprise, earning a net income after deductions of P450,000 is the tax payable by the co-ownership.
For estates and trusts, a personal exemption of P32,000 is allowed if the executor or trustee is married.
For a trust to be taxable, it must be irrevocable, both as to corpus (principal) and income
The source of dividend income is the country where the corporation was incorporated
Profits from the sale of shares of a domestic company are deemed to arise in the Philippines, regardless of where the shares were sold. Profits from the sale of shares of a foreign company are considered to arise in the country where the company was incorporated or organized.
Withholding income tax on passive income C. Withholding income tax at source
Interest on Philippine lotto winnings D. Amounts received as returns of premiums
Amounts received as rewards for giving information instrumental in the discovery of violation of the Tax Code and seizure of smuggled goods
Tax credit or deduction from gross income D. Deduction from gross income only
Taxable subject to final tax if received by a non-resident citizen from a non- resident corporation
Separation benefits received by terminated employees resulting from a deadlock in their collective bargaining agreement are exempt from income tax
Incomes from illegal activities are taxable
Interest payments on proceeds of life insurance held by the insurer
Taxable income of the lessor in the year received whether he is on the cash or accrual method of accounting
Refund of overpaid rental expense in prior year B. Refund of donor’s tax paid in prior year
As a general rule, a fringe benefit provided or given in cash or in kind by an employer to an individual employee may be subject to fringe benefit tax, if given. Regarding the amount to which the fringe benefit tax rate applies, which statement is incorrect.
The monetary value of the fringe benefit B. The gross-up monetary value of the fringe benefit
The fringe benefit tax is a tax paid by the managerial or supervisory employee
Fringe benefits furnished or granted by the employer to its managerial and supervisory employees
Losses from wagering transactions shall be allowed only up to the extent of the gains from such transactions
Transportation expenses from home to the office and from the office back to home
To benefit one accounting period and is a deduction from gross income in the year paid or incurred
Between an individual and a corporation more than 50% in value of the outstanding stock of which is owned, directly or indirectly for such individual,
To build a bigger warehouse, a company demolished an old warehouse with a construction cost of P2M and a book value of P300,000. A capital expense generally benefits more than one accounting period and is deductible from gross income in the year in which it is paid or incurred. The costs for improving the leasehold are deductible from the gross income of the paying company.
Contributions by the employer to a pension trust for past service costs are fully deductible in the year the employer made the contributions.
Optional standard deduction
Life-blood theory D. Equitable doctrine of tax benefit
The optional standard deduction is an amount equal to forty percent (40%) of the
Private educational institutions D. Resident alien
Taxable in full
The holding period does not apply to the corporation, therefore, capital gains and losses are recognized at 50%. Capital losses are deductible against ordinary earnings, but net capital loss is not deductible against ordinary earnings. Ordinary losses are deductible only to the extent of capital gains, but net capital loss is not deductible against ordinary gain.
The property sold is a capital asset
Net capital loss carry over in a taxable year should not exceed the capital gain in the year the loss was incurred
The holding period does not apply to corporations, therefore capital gains and losses are recognized at 100%. Ordinary losses are deductible from capital gains, but net capital losses cannot be deducted from ordinary profits. The net capital losses carried forward may not exceed the net income in the year in which the loss was incurred.
Net capital loss carry-over should not exceed the net income in the year the loss was incurred
Real property not used in the trade or business of taxpayer
The initial payments do not exceed 25% of the contract price
Use the preceding number, but the income tax return is submitted on time but by an internal revenue officer other than the one to whom the return should be submitted. He was notified by the BIR of his failure to file the tax return, for which reason he filed his tax return and paid the tax only after the said notice on October 15, 2010. Taxpayer filed his income tax return for the calendar year 2008 on time. and paid on April 15, 2009.
A preliminary check of his tax return revealed that he had incorrectly calculated the tax owed. The taxpayer is assessed for income tax deficiency in a notice letter and a tax notice is issued on June 15, 2010 calling for payment on or before July 15, 2010. A company has filed its ITR and paid tax for the calendar year 2008 with a net taxable income of P500,000.
However, upon investigation, it was revealed that its ITR was false or fraudulent because it did not report a taxable income of an additional P500,000. Failure to timely object to the preliminary assessment notice, a final demand letter and assessment notice issued on June 15, 2010, calling for payment by July 15, 2010. Using the preceding number, provided that the assessment has become final and collectable, but the company first pays the tax assessment on 15 August 2010, the total amount due (excluding compromise penalty) is.
On a quarterly basis, cumulative system and on a yearly basis, once a year
April 15 of the following taxable year
B is not exempt from filing his ITR because his total compensation income for 2008 came from more than one employer
Every Filipino citizen residing outside the Philippines, on his income from sources outside the Philippines
Keeping two (2) sets of books of accounts or records
Filing a criminal complaint against erring BIR officials or employees
Regional Trial Court C. BIR
A protest should be made on time, otherwise the assessment becomes final and executory
Resident aliens engaged in business in the Philippines are required to file quarterly and annual ITR
A protest should be filed by a taxpayer, otherwise the assessment becomes final and can no longer be questioned in court
The assessment must be made by the BIR within five years from the filing of the return.
A pre-assessment notice shall be required before an assessment maybe made
A reasonable doubt as to the validity of the claim against the taxpayer
Filing of a bond for at least double the amount of the tax assessed
The taxpayer requests for the reinvestigation which is granted by the Commissioner
The Commissioner of the BIR B. The Secretary of Finance
Tax investigation C. Tax assessments
The tax or any portion thereof appears to be unjustly or excessively assessed
Inquire into bank deposits of a taxpayer
