1) Income Tax of Natural persons imposed on the total net income which realized by natural

persons (individuals) regardless of:

a) Age
b) qualification
c) nationality
d) All of the above

2) If natural person resident in Egypt, tax imposed on their incomes:

a) Realized in Egypt only
b) Realized abroad only
c) Both (a) and (b)
d) None of the above

3) If natural person non-resident in Egypt, tax imposed on their incomes:

a) Realized in Egypt only
b) Realized abroad only
c) Both (a) and (b)
d) None of the above

4) Natural persons are considered a resident in Egypt in any of the following cases, except:
a) If he has a permanent domicile in Egypt
b) If he resides in Egypt for a period which exceed 183 days connected or
disconnected during the twelve months
c) If he is one of Egyptians who works abroad in a private company
d) If he is one of Egyptians who performs his job abroad and his income is obtained
from the Egyptian treasury

5) Income tax is the most important source of revenue in Egypt. Income tax is
a) Direct and proportional
b) Indirect and proportional
c) Direct and progressive
d) Indirect and progressive
6) The tax base for natural resident in Egypt not include:
a) Salaries and the like
b) Revenues of Non-Commercial professions
c) Tax on wealth
d) Revenues of Commercial and Industrial activity

Use the following information to answer the questions from 7 : 9

The following are taxable revenues of an individual resident in Egypt for 2016:
− 90000 L.E profits from commercial activity (of which L.E 20000 realized abroad)
− 15000 L.E profits from non-commercial professions.
− 3700 L.E revenues of Real Estate wealth.
− 45000 L.E salaries.
• So, if you learn that:
1. Egypt is the center of his commercial activity.
2. Taxpayer paid during the year building tax of 200 L.E.
3. The foreign tax paid is 3000 L.E.

7) The total taxable income for the year 2016 will be:
a) 45000 L.E
b) 135000 L.E
c) 153500 L.E
d) 153700 L.E

8) The Tax Due for the year 2016 will be:

a) 5900 L.E
b) 26300 L.E
c) 26340 L.E
d) 22600 L.E
9) The Tax due for the year 2016 after deducting the tax paid abroad will be:
a) 23300 L.E
b) 21300 L.E
c) 26300 L.E
d) 20000 L.E

10) If the activity of commercial and non-commercial professions realized losses:

a) These losses deducted from the salaries and the like
b) Shall be deduct from revenues of real estate wealth realized in the same year
c) These losses should be omitted
d) Shall be deducted from the tax base in the next year

11) The maximum limit to deduct losses realized during a year is:
a) One year
b) Two years
c) Five years
d) Ten years

12) Which of the following is not consider a Non-commercial profession:

a) Accountant
b) Lawyer
c) Engineer
d) Tax officer

13) Costs and expenses realized by natural person are deductible with which of the following
conditions:
a) They are necessary for the practice of the profession or the activity
b) They are supported by documents
c) They should have been actually paid during the year
d) All of the above
14) Which of the following are not considered as deductible cost by law:
a) Duties of Registration
b) Annual subscription paid to syndicate
c) Duties of practicing the profession
d) Rent of place or places

15) Which of the following are considered as deductible cost by law:

a) Rent of place or places.
b) Wages, salaries, and rewards of working force.
c) Duties of practicing the profession
d) Travel and transportation expenses borne by taxpayer for practicing the
profession.

16) If taxpayer not keep regular books, all costs and expenses necessary to practice the
profession are estimated at
a) 7% from total expenses
b) 7% from total revenues
c) 10% from total expenses
d) 10% from total revenues

17) A juridical person is not considered a resident in Egypt in any of the following cases
a) Established according to Egyptian law
b) Between 30%:40% board of directors must be resident in Egypt .
c) Headquarters located inside Egypt
d) Main operation located inside Egypt

18) For the Juridical person, tax is calculated at the rate of ……… from total net profits
a) 20%
b) 22.5%
c) 25%
d) 40%
19) For Suez Canal Authority, the Egyptian petroleum Authority, and the Central Bank, tax is
calculated at the rate of
a) 20%
b) 22.5%
c) 25%
d) 40%

20) For oil and gas exploration and production companies, tax is calculated at the rate of
a) 20%
b) 40.55%
c) 25%
d) 40%

21) Juridical persons exempted from tax include:

a) Ministries and Departments of government
b) Societies and National Institutions
c) Organizations not aiming at profit
d) All of the above

22) Juridical persons exempted from tax not include:

a) Special Insurance Funds
b) Investment Funds (Mutual)
c) Capital associations
d) Societies and National Institutions

23) Costs and expenses not customarily demonstrated by documents are deductible at:
a) 7% from total general and administrative expenses supported by documents
b) 7% from total revenues
c) 10% total general and administrative expenses supported by documents
d) 10% from total revenues
24) The debit returns are considered deductible costs except:
a) The return paid on loans not exceed twice the credit and discount rate declared by
the central bank.
b) The return on loan and debts of different types paid to non-taxable natural
persons or exempted from it.
c) The returns on loans used in the activity.
d) The return paid on loans not exceed 4 times the average of owner’s equity.

25) Different types of reserves and provisions are

a) Deductible expenses
b) Not deductible expenses
c) Deductible expenses except some cases
d) Not deductible expenses except some cases

26) Expenditures charged in the income statement but not allowable for tax purposes
a) Deducted from the tax base
b) Added to tax base
c) Omitted
d) Deducted from the tax due

27) Revenues not credited in the income statement but taxable under tax law
a) Deducted from the tax base
b) Added to tax base
c) Omitted
d) Deducted from the tax due

28) Revenues not credited in the income statement and not subject to tax under tax law
a) Deducted from the tax base
b) Added to tax base
c) Omitted
d) Deducted from the tax due
29) Expenditures no charged in the income statement but allowable for tax purposes
a) Deducted from the tax base
b) Added to tax base
c) Omitted
d) Deducted from the tax due

30) Expenditures charged in the income statement and allowable for tax purposes
a) Deducted from the tax base
b) Added to tax base
c) Omitted
d) Deducted from the tax due

31) Revenues credited in the income statement but not taxable under tax law
a) Deducted from the tax base
b) Added to tax base
c) Omitted
d) Deducted from the tax due

32) Sums paid to shareholders for attending the general assemblies:

a) Deductible expenses
b) Not deductible expenses
c) Deductible expenses except some cases
d) Not deductible expenses except some cases
33) The value of depreciations of fixed assets which calculated according to accounting
basis, is
a) Deductible expenses
b) Not deductible expenses
c) Deductible expenses except some cases
d) Not deductible expenses except some cases

34) The value of depreciations of fixed assets which calculated according to tax basis, is
a) Deductible expenses
b) Not deductible expenses
c) Deductible expenses except some cases
d) Not deductible expenses except some cases

35) Sums deductible to favor of special funds to be deductible, it shouldn't:

a) Have a special account with banks
b) Invested to its own account
c) Exceed 20% of total salaries and wages of the employees
d) His books separately from accounts of the firm.

36) Contributions paid to government, unit of local administration, & other public juridical
persons, are:
a) Deductible expenses
b) Not deductible expenses
c) Deductible expenses except some cases
d) Not deductible expenses except some cases

37) Contributions and subsidies paid to the Egyptian non-government societies and
institutions registered according to the provisions of their regulating laws, are:
a) Deductible expenses whatever the value
b) Not deductible expenses
c) Deductible expenses at a maximum rate of 10% of the annual net profit
d) Not deductible expenses except some cases
38) If the company that have bad debt is not previously included it in its accounts, the bad
debt will consider:
a) Deductible expenses
b) Not deductible expenses
c) Deductible expenses except some cases
d) Not deductible expenses except some cases

39) Which of the following is not consider a deductible expense:

a) Losses resulting from dealing in securities registered in Egyptian stock Exchange
b) Fines, financial punishments & Compensations that the company paid as a result
of non-contractual liabilities
c) Foreign losses realized outside Egypt
d) All of the above are not deductible expenses

40) Taxable capital gain resulting from selling fixed assets are:
a) Taxable revenue
b) Not taxable revenue
c) Deductible expense
d) Non-deductible expense

41) Credit differences resulted from correcting accounting errors:

a) Taxable revenue
b) Not taxable revenue
c) Deductible expense
d) Non-deductible expense
42) Taxable capital losses resulting from selling fixed assets which were depreciable by
nature, are considered:
a) Taxable revenue
b) Not taxable revenue
c) Deductible expense
d) Non-deductible expense

43) Debit differences resulted from correcting accounting errors:

a) Taxable revenue
b) Not taxable revenue
c) Deductible expense
d) Non-deductible expense

44) Taxable capital gain resulting from selling fixed assets, not charged in the income
statement should be:
a) Added to tax base
b) Deducted from the tax base
c) Omitted
d) Deducted from the tax due

45) Credit differences resulted from correcting accounting errors, not charged in the income
statement should be:
a) Deducted from the tax base
b) Added to tax base
c) Omitted
d) Deducted from the tax due

46) Collected bad debts which credited in the income statement:

a) Subject to tax if the tax office had not approved in the previous years
b) Not subject to tax if the tax office had not approved in the previous years
c) Deductible expense
d) Non-deductible expense
47) Credit differences resulted from correcting accounting errors, charged in the income
statement should be:
a) Deducted from the tax base
b) Added to tax base
c) Omitted
d) Deducted from the tax due

48) Compensations subject to tax on:

a) Accrual basis
b) Modified accrual basis
c) Cash basis
d) Not subject to tax at all basis

49) Dividends, profits and shares, which resident juridical persons receive for their
participation in other resident juridical persons:
a) Deducted from the tax base
b) Added to tax base
c) Omitted
d) Deducted from adjusted net profit
Use the following information to answer the questions from 50 : 54
The Total debit returns charged in the income statement for a joint stock company for
the year 2016 was 3 million pounds. So, if you learn that:
A- The total loans which its returns charged in income statement was 20 million pounds
detailed as follows:
− 4 million pounds from natural person exempted from the tax, with interest at the
rate of 10% annually.
− 12 million pounds from Misr Bank to finance treasury bills, with interest at the rate
of 15% annually.
− 4 million other loans with interest at the rate of 20% annually.
B- The average loans during the year 2016 amounted of L.E 20 million, and the average
owner’s equity was L.E one million.
C- The credit and discount rate declared by the central bank on 1 January 2016 was 9%.

50) Return on loan paid to natural person exempted from tax will be:
a) Deducted from the tax base
b) Added to tax base
c) Omitted
d) Deducted from adjusted net profit

51) Return on loan from Misr Bank to finance treasury bills, with interest at the rate of 15%
annually:
a) Deducted from the tax base
b) Added to tax base
c) Omitted if the total loans do not exceed 4 times the average of owner’s equity
d) Deducted from adjusted net profit

52) Return on loans which exceed twice the credit and discount rate will be
a) 80000 L.E
b) 440000 L.E
c) 153000 L.E
d) 155000 L.E
53) Return paid on loans in excess of 4 times the average of owner’s equity
a) 800000 L.E
b) 1950000 L.E
c) 1800000 L.E
d) 1900000 L.E

54) The total Disallowable debit returns will be:

a) 1950000 L.E
b) 2350000 L.E
c) 2430000 L.E
d) None of the above
Use the following information to answer the questions from 55 : 65
Net profit before tax of a private stock company for the year 2016 was L.E 250500. So,
if you learn the following:
A- Revenues of the company include:
➢ L.E 27000 capital gains resulting from sale of used machines.
➢ L.E 40000 gross profits from activity abroad.
➢ L.E 90000 dividends from other resident subsidiary company, noting that
participation in its capital is 30% and the holding period of such percentage is three
years.
➢ L.E 22000 revenues of building, noting that the monthly rent is L.E 2000.
B- Expenditures of the company include:
➢ L.E 17000 foreign tax paid on profits realized abroad.
➢ L.E 1200 realty tax on building owned by the company.
➢ L.E 4000 losses from sale of securities not listed in the Egyptian Stock Exchange.
➢ L.E 2000 income tax paid according to tax returns.
➢ L.E 35000 collected bad debts of which L.E 27000 not approved by tax office
C- Cost of financing and investments related to the revenues exempted from the tax was
L.E 2000, and the investing is not only, the purpose of obtaining the funds.
D- Total revenues of the company are L.E 360000.

55) The L.E 27000 capital gains resulting from sale of used machines should be:
a) Deducted from the tax base
b) Added to tax base
c) Omitted
d) Deducted from adjusted net profit

56) For the L.E 90000 dividends from other resident subsidiary company:
a) All the amount are exempted from the tax
b) Deduct the amount from the adjusted net profit and add only 10% to tax base
c) Omitted
d) Deducted from the tax base
57) L.E 22000 revenues of building, noting that the monthly rent is L.E 2000:
a) Deduct 2000 from the tax base
b) Add 2000 to tax base
c) No change should make
d) Deduct all the amount from adjusted net profit

58) For The L.E 1200 realty tax on building owned by the company, the amount should:
a) Deduct from the tax base
b) Add to tax base
c) Omitted
d) Deduct from adjusted net profit

59) For the L.E 4000 losses from sale of securities not listed in the Egyptian Stock Exchange,
the amount should:
a) Deduct from the tax base
b) Add to tax base
c) Omitted
d) Deduct from adjusted net profit

60) For the L.E 2000 income tax paid according to tax returns, the amount should:
a) Deduct from the tax base
b) Add to tax base
c) Omitted
d) Deduct from adjusted net profit

61) For the L.E 35000 collected bad debts of which L.E 27000 not approved by tax office:
a) Deduct only 27000 from the tax base
b) Add all the amount to tax base
c) Omitted
d) Deduct all the amount from adjusted net profit
62) For L.E 2000 Cost of financing and investments related to the revenues exempted from
the tax, you should:
a) Deduct 2000 from the tax base
b) Add 2000 to tax base
c) No change should make
d) Add 500 to tax base

63) For the L.E 40000 gross profits from activity abroad and L.E 17000 foreign tax paid on
profits, you should
a) Deduct all the taxes paid abroad
b) Deduct only 10000 from the tax due
c) Omit the revenue and the tax paid
d) Deduct tax paid from adjusted net profit

64) According to all the previous information the Net tax base will be:
a) 153000
b) 158000
c) 144000
d) 42000

65) According to all the previous information the tax payable should be:
a) 34425
b) 24425
c) 17425
d) 42000

66) Which of the following is indirect tax?

a) Income tax
b) Wealth tax
c) Corporation tax
d) Value add tax
67) If 'ABC Company' imports a product from abroad, then which tax will be levied on it?
a) VAT
b) Custom duty
c) Income tax
d) Corporation tax

68) Progressive tax structure, means that:

a) The tax rate decreases as the tax base increases
b) The tax rate increases as the tax base increases
c) The tax rate increases as the tax base decreases
d) the tax rate decreases as the tax base increases

69) Which of the following expenses are completely deductible?

a) L.E 1,000 spent on compensating your brother for a personal expense
b) L.E 50 spent on meals while traveling on business
c) L.E 2,000 spent by the employer on reimbursing an employee for entertainment
d) None of these expenses can be deducted in full

70) All of the following statements are correct except one

a) Taxation power is an absolute power
b) Taxation power is the strongest of all inherent portion of the government
c) Tax laws must not violate Constitutional restrictions
d) Exercise of Taxation power is subject to restrictions

71) One of the following is not among the basic justification for taxation
a) Taxation is based on necessity
b) Taxation is the lifeblood of the government
c) Taxation is the bread and butter of the government
d) Taxation is a voluntary contribution for the benefits received
72) If a property is received in lieu of cash compensation, the basis of tax is the
a) Supposed amount of cash to be received
b) Agreed value of the property received
c) Fair market value of the property received
d) Salvage value of the property received

73) Which of the following is the largest tax revenue source? Select one:
a) personal income taxation
b) corporation taxation
c) social insurance taxation
d) excise taxation

74) A government operates under a budget deficit when it spends less than it takes in from
tax revenue:
a) True
b) False

75) Which of the following is not a goal of the tax law?

a) Encouraging certain social goals such as contributions to charity.
b) Encouraging certain economic goals such as a thriving business community.
c) Encouraging smaller families.
d) Raising revenue to operate the government.

76) Which of the following is not a goal of the tax law?

a) Ensuring that all persons pay the same amount of tax.
b) Economic goals such as reduction in unemployment.
c) Social goals such as lowering the cost of adoption.
d) Raise adequate revenue to operate the government.
77) A tax must be imposed for public purpose. Which of the following is not a public
purpose?
a) National defense
b) Public education
c) Improvement of the sugar industry.
d) Improvement of a subdivision road.

78) Which of the following is not a determinant of the place of taxation?

a) Source of the income
b) Citizenship of the taxpayer
c) Residence of the taxpayer
d) Amount of tax to be imposed

79) Tax which is demanded from one person in the expectation and intention that he shall
indemnify himself at the expense of another.
a) Direct
b) Excise
c) Indirect
d) Percentage

80) One of the characteristics of a tax is that:

a) It is generally based on contact.
b) It is generally payable in money.
c) It is generally assignable.
d) It is generally subject to compensation.