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MOCK BAR EXAMINATION MCQs IN TAXATION
MOCK BAR EXAMINATION MCQs IN TAXATION
[Partial List]
[Courtesy of Gamanikong]
1. Under RA 9010 the following will be subject to EVAT starting January 1, 2003, except:
a. 12% VAT
b. 0% VAT
c. Exempt
d. Specific Tax
a. before the preliminary investigation of a fraudulent tax evasion case could prosper
a. 10 years from discovery of omission to file return, falsity or fraud if there is no assessment
b. 3 years from filing of return
b. VAT of 12%
c. Specific tax
d. a and b
e. Exempt
6. The manufacture and importation of the following for local consumption are subject to excise
tax, except:
a. alcohol products
b. tobacco products
c. cinematographic films
d. mineral products
c. subject to 0% VAT
a. compromise
b. abate
c. credit
d. refund
a. Files a written claim for credit/refund with the BIR within 2 years from payment
12. Requirements in order that retirement benefits may be exempt from income tax:
a. Must be paid to an employee who is at least 50 years old and has served his employer for at
least 10 years
d. a and b only
13. For purposes of the donor’s tax, the following are considered strangers:
b. Relatives by consanguinity in the collateral line within the 4th civil degree
14. The special deductions from the gross estate are the following, except:
b. Standard deduction
d. Medical Expenses within one year from the death of the decedent not exceeding P500,000
15. Funeral expenses that can be claimed as deduction from the gross estate should be:
16. The usual modes of avoiding the occurrence of double taxation are:
17. Jose is a law-abiding citizen who pays his real estate taxes promptly. Due to a series of
typhoons and adverse economic conditions, an ordinance is passed by Quezon City granting a
50% discount for payment of unpaid real estate taxes for the preceding year and the condonation
of all penalties on fines resulting from the late payment.
Arguing that the ordinance rewards delinquent taxpayers and discriminates against prompt ones,
Jose demands that he be refunded an amount equivalent to one-half of the real estate taxes he
paid. The municipal attorney rendered an opinion that Jose cannot be reimbursed because the
ordinance did not provide for such reimbursement. Jose files suit to declare the ordinance void
on the ground that it is a class legislation.
b. The suit will prosper because the ordinance is not based on substantial distinction.
c. The suit will not prosper because taxes are the lifeblood of the government and should be
collected without unnecessary hindrance.
d. The suit will not prosper because the ordinance is based on substantial distinction. Each set of
taxes is a class by itself and the law would be open to attack only if all the taxpayers belonging to
one class were not treated alike.
a. Resident Filipino citizens with income from foreign sources only are allowed personal and
additional exemptions
b. Non-resident aliens not engaged in trade/business in the Philippines are not allowed any
personal exemptions
19. The periodic decrease in the value of a fixed asset due to wear and tear, obsolescence or
inadequacy
a. depletion
b. depreciation
c. capital loss
d. special loss
21. Citing Section 10, Article VIII of the 1987 Constitution which provides that salaries of
judges shall be fixed by law and that during their continuance in office their salary shall not be
decreased, a judge of a Regional Trial Court questioned the deduction of withholding taxes from
his salary since it results into a net deduction of his pay.
Is the contention of the judge correct?
b. No. The contention is incorrect because taxes must be collected in order to support the
government.
c. No. The contention is not correct because deduction of withholding taxes is not a dimunition
contemplated by the fundamental law.
d. No. The contention is incorrect because deduction of withholding taxes is required by law.
22. The following conditions shall be observed when there is a net capital loss carry over:
a. The loss carried over is for a holding period not exceeding 12 months
b. The amount of the loss should not exceed the income before exemptions in the year when the
loss was sustained
23. What is the minimum compromise rate in cases of doubtful validity of assessment?
c. No limitation
d. P1,000,000
24. Which of the following VAT transactions are not considered zero-rated?
25. Barbaran municipality has an ordinance which requires that all stores, restaurants, and other
establishments selling liquor should pay a fixed annual fee of P20,000. Subsequently, the
municipal board proposed an ordinance imposing a sales tax equivalent to 5% of the amount paid
for the purchase or consumption of liquor in stores, restaurants, and other establishments. The
municipal mayor refused to sign the ordinance on the ground that it would constitute double
taxation.
a. No. The refusal of the mayor is unjustified because double taxation is allowed in our
jurisdiction.
b. No. The refusal of the mayor is not justified because the impositions are of different nature
and character.
c. No. The refusal of the mayor is unjustified because it is not within his power.
d. No. The refusal of the mayor is not justified because double taxation will generate more
revenues.
26. This is a summary administrative remedy, seizure of real property to enforce payment of tax
due:
a. Levy
b. Distraint
c. Forfeiture
d. Tax lien
a. Splitting of donation
b. Survivorship agreement
28. Tony has inadvertently omitted P100,000 income in his 2004 Income Tax Return. Upon
discovery in 2005, the BIR issued an assessment for deficiency income tax for P100,000 plus
50% fraud surcharge. Meanwhile, Tony included the omitted P100,000 income in his 2005
Income Tax Return. What advice will you give Tony?
a. Amend his 2004 Income Tax return to reflect the correct amount of income
b. Pay the assessed tax plus surcharge, and thereafter , ask for refund
29. Tino is engaged in buying and selling of fresh fruits at the Q-Mart and Aranque Markets. He
is also exporting canned and preserved fruits to Japan. In 2004, he made a gross sales of
P2,000,000. He is liable for VAT registration fee of :
a. P500
b. P1,000
c. P1,500
d. Exempt
30. Shirley was allowed to deduct P200,000 bad debts written off in 2003, where she had a net
income before bad debts of P180,000 and a net loss of P20,000. IN 2004, she was able to recover
the bad debts written off in full. The bad debts recovery is:
Answer Key:
1. D
2. B
3. A
4. D
5. A
6. C
7. A
8. B
9. A
10. D
11. D
12. D
13. C
14. A
15. D
16. D
17. D
18. D
19. B
20. D
21. C
22. D
23. A
24. B
25. B
26. A
27. D
28. C
29. A
30. C