Since 1977

TAX E. D. TABAG
Quiz 3. SET A OCTOBER 2019

1. Statement 1: When the income tax due is in excess of
P5,000, the individual taxpayer may elect to pay the
tax in two equal installments.
Statement 2: In case of installment payment of
income tax due, the first installment shall be paid at
the time of filing the income tax return and the second
installment on or before October 15 following the close
of the calendar year.
a. true, true c. true, false
b. false, false d. false, true
6. Fixed daily meal allowance not exceeding 25% of basic
minimum wage granted to professors and employees
of an educational institution is
a. Exempt from basic income tax
b. Subject to fringe benefit tax if the recipient is a
rank and file employee
c. Subject to fringe benefit tax if the recipient is a
managerial employee
d. Subject to basic income tax regardless of
employee’s rank

2. Statement 1: There is capital gain tax on shares of 7. A minimum wage earner is exempt from income tax
stock only if the shares are those of a domestic notwithstanding his receipt of the following, except:
corporation held as capital asset and not listed and a. holiday pay c. nightshift differential
traded in a local stock exchange. b. overtime pay d. commission
Statement 2: The capital gain tax on shares of stock is
paid within thirty days from the date of sale. 8. Pedro Masigasig is the Chief Finance Officer of Beta
a. Statements 1 & 2 are false Corporation. In 2018, he received a fringe benefit
b. Statement 1 is true but statement 2 is false amounting to P102,000. The total allowable expenses
c. Statement 1 is false but statement 2 is true incurred by the company for the said fringe benefit tax
d. Statements 1 and 2 are true expense is:
a. P120,000 c. P150,000
3. Which of the following statements is correct? b. P136,000 d. P156,923
I. The fringe benefit tax is a final withholding tax on
the grossed-up monetary value of the fringe 9. Interest income on bank deposit or investment with
benefit granted by the employer to an employee maturity period of at least five (5) years received by a
who holds a managerial or supervisory position. corporation is subject to:
II. Fringe benefit tax is effective regardless of whether Domestic Res. Foreign Non-resident
the employer is an individual, professional Corp. Foreign Corp.
partnership or a corporation (regardless of whether a. 20% 20% 30%
the corporation is taxable or not). b. Exempt Exempt Exempt
III. The fringe benefit tax regulations cover only those c. 20% 20% Exempt
fringe benefits given or furnished to managerial or d. 20% Exempt Exempt
supervisory employees. The regulations do not
cover those benefits which are part of 10. Interest income received from a depository bank under
compensation income, because these are subject expanded foreign currency deposit system prior to
to creditable withholding tax. 2018 shall be subject to:
a. I only c. I, II and III DC RFC NRFC
b. I and II only d. None of the above a. 20% 20% 20%
b. 7 ½% 7 ½% Exempt
4. Statement 1: The exemption of any fringe benefit c. 15% 15% Exempt
from the fringe benefit tax shall not be interpreted to d. 15% 7 ½% Exempt
mean exemption from any other income tax imposed
under the Tax Code except if the same is likewise 11. Interest income received from a depository bank under
expressly exempt from any other income tax imposed expanded foreign currency deposit system beginning
under the Tax Code or under any other existing law. January 1, 2018 or upon effectivity of the TRAIN Law
Statement 2: If the fringe benefit is exempted from shall be subject to:
the fringe benefit tax, the same may, however still DC RFC NRFC
form part of the employee’s gross compensation a. 20% 20% 20%
income which is subject to income tax, hence, likewise b. 7 ½% 7 ½% Exempt
subject to withholding tax on compensation income c. 15% 15% Exempt
payment. d. 15% 7 ½% Exempt
a. Statements 1 & 2 are false
b. Statement 1 is true but statement 2 is false 12. Royalty income received by a corporation prior to 2018
c. Statement 1 is false but statement 2 is true shall be subject to:
d. Statements 1 and 2 are true DC RFC NRFC
a. 20% 20% 30%
5. Statement 1: Fringe benefit tax is imposed on the b. 7 ½% 7 ½% Exempt
employee c. 15% 15% Exempt
Statement 2: The employer is the one liable for the d. 15% 7 ½% Exempt
payment of fringe benefit tax
a. Only statement 1 is correct 13. Royalty income received by a corporation beginning
b. Only statement 2 is correct January 1, 2018 or upon effectivity of the TRAIN Law
c. Both statements are correct shall be subject to:
d. Both statements are not correct

Page 1 of 2 www.prtc.com.ph TAX. SET A

EXCEL PROFESSIONAL SERVICES, INC.

DC RFC NRFC Joint ABC Co. DEF Co.

a. 20% 20% 30% Venture
b. 7 ½% 7 ½% Exempt Gross P5,000,000 3,000,000 2,000,000
c. 15% 15% Exempt
Income
d. 15% 7 ½% Exempt
OPEX 3,000,000 2,000,000 1,500,000
14. Royalty income from books received by a corporation
prior to 2018 shall be subject to: 16. The income tax payable of the joint venture is
DC RFC NRFC a. P0 c. P300,000
a. 10% 10% 30% b. P150,000 d. P600,000
b. 20% 20% 30%
c. 15% 15% Exempt 17. The total income tax payable of ABC Co. is:
d. 15% 7 ½% Exempt a. P0 c. P300,000
b. P150,000 d. P600,000
15. Royalty income from books received by a corporation
beginning January 1, 2018 or upon effectivity of the 18. The total income tax expense of DEF Co. is:
TRAIN Law shall be subject to: a. P0 c. P570,000
DC RFC NRFC b. P150,000 d. P750,000
a. 10% 10% 30%
b. 20% 20% 30% 19. Assume the joint venture (JV) is a tax-exempt JV, its
c. 15% 15% Exempt income tax payable is
d. 15% 7 ½% Exempt a. P0 c. P300,000
b. P150,000 d. P600,000
Use the following data for the next five (5) questions:
ABC Company and DEF Company formed a joint venture. 20. Assume the joint venture is tax exempt, the total
They agreed to share profit or loss in the ratio of 70% and income tax expense of ABC Co. is:
30%, respectively. The results of operations of the joint a. P150,000 c. P300,000
venture as well as the co-venturers are as follows: b. P330,000 d. P720,000

***End of Quiz***
Goodluck!

Graduated Income Tax Rate effective 01 January 2018 until 31 December 2022
Not Over P250,000 – 0%
Over P250,000 but not over P400,000 - 20% of the excess over P250,000
Over P400,000 but not over P800,000 - P30,000 plus 25% of the excess over P400,000
Over P800,000 but not over P2,000,00 - P130,000 plus 30% of the excess over P800,000
Over P2,000,000 but not over P8,000,000 -P490,000 +32% of the excess over P2,000,000
Over P8,000,000 - P2,410,000 + 35% of the excess over P8,000,000

- end -

Page 2 of 2 www.prtc.com.ph TAX. SET A