TAX ARC REVIEWER\

Easy

1. A Filipino citizen derived a dividend income oh his shares of stock an American corporation in the United States. The US
federal government imposed an income tax on it. Which of the following statements is correct?

A. There is double taxation

B. The US income tax payment cannot be claimed as a deduction fro, gross income

C. The US income tax payment can be claimed as tax credit without any limitation on the amount of such tax credit.

D. The US income tax payment can be claimed as tax credit, but subject to limitation on the amount of such tax credit.

Which statement is correct?

2. Statement 1. The documentary stamp tax may be a fixed amount on a particular kind of document mentioned in the law.

Statement 2. The documentary stamp tax may be a graduated amount depending on the money involved in the document
evidencing a transaction.

A. Statement 1 B. Statement 2 C. Both the statements are correct D. Both statements are wrong

3. The following are the requisites in order that claims against the decedent’s estate may be deductible, except:

A. They may be existing against the estate

B. They must be reasonably certain as to amounts

C. They must have been prescribed

D. They must be enforced by the claimants

4. Which of the following examples is not taxable in 2019?

A. A Filipino citizen donated a parcel of land located in the Philippines to B, a non-resident alien

B. On June 1, 2018, A made a gift of 20 000 to his daughter on account of her marriage celebrated in May 1, 2018

C. Mr. Ramos gives his wife a diamond ring worth 100 000 as a birthday gift

D. A and B are the only heirs of C. A renounces his share of inheritance in favor of B.

5. Property ( not real property subject to capital gains tax) was transferred under a deed of sale under the following
circumstances

FMV of the property at the time of sale 2 000 000

Contracted selling price 1 200 000

Zonal value 500 000

What was the tax consequence of the transaction?

A. 1 200 000 B. 700 000 C. 1 300 000 D. 800 000

6. Statement 1. The income tax expense in the books of accounts is always the normal tax

Statement 2. The year-end excess of minimum corporate income tax over the normal income tax will be in the books of
accounts as a deferred charge.

A. True, true B. False, false C. True, false D. False, true

7. Gross receipt tax is a business tax paid by a

A. Hotel operator

B. Insurance company

C. Franchise holder

D. Bank

8. Three of the following are exempt from the value added tax. Which is the exception?

A. Sales or importation of medical, dental and veterinary medicines

B. Services rendered by persons subject to percentage tax

C. Receipts from leasing of real properties

D. Export sales by persons who are not value-added tax registered

E. All of the above

F. None of the above

9. Choose the letter of the correct answer

A. The VAT payable is reflected as a liability in the statement of Financial Position

B. The deferred input tax is reflected as an asset in the statement of financial position

C. There is no output taxes or input taxes account in the financial statements

D. All of the statements are correct

E. One or more statements is wrong

10. When an importation is made by a VAT-exempt person and the goods are transferred to a non-VAT person, the value added
tax on the importation is:

A. Still, and correctly due, from the importer

B. Should be paid by the transferee

AVERAGE

1. An importer wishes to withdraw its importation from the Bureau of Customs. The imported goods were subjected to 10%
customs duty in the amount of 12 500 and to other charges in the amount of 9 500. The Value added tax due is

A. 12 500 B. 13 750 C. 13 364 D. 17 640

Solution

Dutiable value of the importation (12 500/10%) 125 000

Add

Customs duty 12 500

Other charges 9 500

Total 147 000

VAT 147 000 x 12% 17 640

2. Donation by C, citizen and resident of the Philippines as follows

To D, of property in PH

To E, of property outside ph