FINAL PRE-BOARD EXAMINATION

1.) Which is wrong with respect to taxation?

a. It is inherent in sovereignty. There is no need for a constitutional mandate for its exercise by Congress.
b. Taxation power is comprehensive, plenary, unlimited and supreme.
c. Taxes maybe broadly classified into personal, property or excise.
d. Tax must be uniform and equitable, levied by the legislature having jurisdiction, for public purpose,
proportionate in character and generally payable in money or in kind.

2.) Which is not a principle of a sound tax system?

a. Fiscal adequacy
b. Economic stability
c. Administrative feasibility
d. Theoretical justice

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3.) Select the incorrect statement.
a. the power to tax includes the power to exempt
b. exemption is construed against the taxpayer and in favor of the government

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c. tax statutes are construed against the government in case of doubt
d. the assessment and collection of taxes by the national government is non-delegated

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4.) Which of the following is an inherent limitation to the power to tax?
a. That tax must be for public purpose.
b. Uniformity in taxation
c. Equal protection of the law
d. Progressive scheme of taxation

5.) Which is wrong with situs of taxation?

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a. Persons are taxable in their place of residence.
b. Real properties are taxable in their place of location.
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c. Transfers of properties are taxable in the place of residence of the transferor.
d. Businesses are taxable in the place where they conduct business.

6.) Which is not an element of double taxation?

a. Same objects of taxation
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b. Same tax type

c. Same tax period
d. Same tax rate
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7.) Select the incorrect statement with respect to legislation of tax laws?
a. Tax bills shall originate from the house of representatives.
b. The senate shall concur with amendments to tax bills.
c. Majority of present legislators which constitute a quorum is required to approve tax laws.
d. Tax exemption laws are required to be approved by the majority of all members of congress.
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8.) Which is wrong?

a. The BIR is headed by a Commissioner who is assisted by four deputy commissioners.
b. The BOC is composed of a Commissioner, an assistant commissioner and six deputy commissioners
assigned on three work groups. It is under the supervision of the Department of Finance (DOF).
c. The BOI is composed of the DTI secretary as chairman and five full-time governors. It is attached
agency of the Department of Trade and Industry.
d. The PEZA is headed by a director general and assisted by three deputy directors. IT is an attached
agency of the DOF.

9.) Which is wrong with respect to fiscal incentives under the CREATE?
a. The National Tax Research Center (NTRC) shall act as secretariat of the FIRB.
FINAL PRE-BOARD EXAMINATION
b. The NTRC is composed of 3 groups: fiscal incentive management group (FIMG), monitoring and
evaluation board (MEG), legal group (LG).
c. The FIRB shall grant tax incentives for firms with investment capital of more than P 1 Trillion.
d. IPAs have exclusive jurisdiction to register all projects or activities regardless of investment capital.

10.) The Strategic Investment Priority Plan (SIPP) shall be formulated and recommended by a group of
organizations which do not include
a. BOI
b. FIRB
c. IPA or OGAs administering tax incentives
d. DOF

Tax Remedies

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11.) An assessment prepared without the benefit of a full or partial audit and is made so the government will
not be prejudiced by the taxpayer’s persistent delays
a. Non-referenced assessment

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b. Formative assessment
c. Jeopardy assessment
d. Summative assessment

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12.) In May 2, 2019, the BIR discovered that a certain taxpayer did not pay taxes on the sale of property in
2001. Can the BIR issue an assessment for the unpaid taxes?
a. Yes, the BIR can render an assessment up to May 2, 2029.
b. Yes, the government’s right to collect taxes never prescribe.
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c. No, the BIR’s right to assessment already prescribed beyond the 10-year prescriptive period.
d. No, any BIR assessment should have been made within 3 years from the 2001 sale.
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13.) In April 15, 2019, the BIR discovered that the tax paid by the taxpayer on a transaction in 2011 is
deficient due to an apparent error. Can the BIR issue an assessment for the deficiency tax?
a. No, no assessment can be rendered beyond the 3-year prescriptive period.
b. No, because the BIR’s right to assess already prescribed.
c. Yes, the government’s right to taxes never prescribes.
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d. Yes, the transaction in question is within the 10-year prescriptive period.

14.) A client consulted you to advise him of his tax assessment. The assessment arose out of a new BIR
interpretation which is not conforming with established rulings or regulations. What is the best course of
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action?
a. Dispute the assessment
b. Compromise with the government
c. Settle the assessment
d. File a petition for review before the CTA
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15.) In 2020, a client asked you whether or not to make an amendment of an income tax return filed for Year
2015. Which one is the best recommendation?
a. Wait for a BIR assessment.
b. Amend the return.
c. Forget about amendment.
d. Inform the BIR of the potential deficiency tax.

16.) Mr. A has been assessed a deficiency income tax of P1 million, exclusive of interest and surcharge, for
2018. The tax liability has remained unpaid, despite the lapse of the June 30, 2020 deadline for payment,
as stated in the notice and demand issued by the commissioner. The taxpayer paid the deficiency income
tax on Feb. 10, 2021. Compute the amount due if the tax is paid on June 30, 2020 and if paid on February
10, 2021.
FINAL PRE-BOARD EXAMINATION
a. P1,395,315.17; P1,498,530.16
b. P1,390,315.17; P1,497,530.16
c. P1, 390,320.20; P1,487,520.17
d. P1,390,315.17; P1,487,520.17

17.) Which of the following can be compromised?

a. Delinquent accounts
b. Cases under administrative protest after issuance of FAN pending in the RO, RDO, legal services –
LTS, collection service, enforcement service and other offices
c. Collection cases filed in court
d. Criminal violations filed in court involving criminal tax fraud cases

18.) Which of the following may be compromised?

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a. civil tax cases being disputed before the court
b. withholding tax cases
c. criminal violations already filed in courts

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d. delinquent accounts with approved schedule of installment payments

19.) Which of the following powers of the Commissioner of Internal Revenue cannot be delegated?

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a.The examination of tax return and tax due thereon
b.To refund or credit tax liabilities in certain cases
c.The power to compromise or abate any tax liability involving basic deficiency tax of P500,000 and minor
criminal violations
d. The power to reverse or modify a ruling

20.)
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Which is not included in the expanded jurisdiction of the CTA?
a. Criminal cases involving violations of the National Internal Revenue Code and the Tariff and Customs
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Code
b. Decisions of the Regional Trial Courts (RTC) in local tax cases
c. Decisions of the Central Board of Assessment Appeals (CBAA) in cases involving the assessment and
taxation of real property
d. Collection of internal revenue taxes and customs duties the assessment of which have already
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become final
e. None of these

Income Taxation
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21.) Which is correct with accounting period and accounting method?

a. Fiscal accounting period is applicable to individuals and corporations
b. Calendar accounting period is applicable only to individual taxpayers
c. Except for dealers of movables, the installment method of income recognition is applicable only where
the initial payment exceeds 25% of the selling price
d. Individual or corporate taxpayers may avail of either accrual basis or cash basis of reporting income.
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22.) The receipt of dividends from

a. a foreign corporation by a resident foreign corporation is subject to regular tax subject to the
predominance test.
b. a foreign corporation by a resident citizen is subject to regular tax.
c. a domestic corporation by a resident foreign corporation is exempt
d. a foreign corporation by a domestic corporation is exempt.

23.) Compute the deductible interest expense for a large corporation with P1,000,000 interest expense and
P120,000 net interest income, P40,000 of which came from client’s promissory notes.
a. P1,000,000 c. P976,000
b. P980,000 d. P960,000
FINAL PRE-BOARD EXAMINATION
24.) An individual taxpayer who is partly practicing his profession changed employers during the year. The
following pertains to the records of his income and expenses:

First Second Professional

employer employer practice
Gross receipts/compensation P 500,000 P 400,000 P 600,000
Expenses 100,000 150,000 250,000
Withholding taxes 20,000 15,000 30,000

How much is the year-end tax adjustment to be made by the second employer?
a. P35,000
b. P40,500
c. P45,000

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d. P57,500

25.) Assuming the taxpayer opted to use OSD, compute the income tax payable through BIR Form 1701.

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a. P128,000
b. P108,500
c. P83,000

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d. P70,500

26.) Assuming the individual opted to the 8% commuted tax, compute the income tax payable through BIR
Form 1701.
a. P83,000
b. P75,500
c. P18,000
d. (P2,000)
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27.) In 2022, A large proprietary educational institution earned a majority of its P20,000,000 gross income
from hotel and restaurant operation. Deductions totaled P16,000,000. Compute its annual tax due and the
tax return to be used.
a. P40,000 through BIR Form 1702MX
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b. P400,000 through BIR Form 1702MX

c. P1,000,000 through BIR Form 1702RT
d. P800,000 through BIR Form 1702RT
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28.) A MSME domestic corporation was granted with an income tax holiday as a domestic market enterprise
for its registered operations with the BOI. Aside from the, it also has other significant business operation.
Details of its performance in 2022 reveals the following:

Registered Other
operation operations Consolidated
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Gross income P 10,000,000 P 5,000,000 P 15,000,000

Deduction 7,000,000 2,500,000 9,500,000
Net income P 3,000,000 P 2,500,000 P 5,500,000

Compute the annual income tax due and determine the appropriate tax return to use.
a. P1,375,000 through Form 1702RT
b. P500,000 through Form 1702RT
c. P625,000 through Form 1702MX
d. P500,000 through Form 1702MX

29.) What is the answer if the answer above if the same is a resident foreign corporation?
a. P1,375,000 through Form 1702RT
b. P500,000 through Form 1702RT
FINAL PRE-BOARD EXAMINATION
c. P625,000 through Form 1702MX
d. P500,000 through Form 1702MX

30.) Which is incorrect with respect to the withholding tax system?

a. It encourages voluntary compliance;
b. It increases cost of collection effort;
c. It prevents delinquencies and revenue loss; and
d. It prevents dry spell in the fiscal conditions of the government by providing revenues throughout the
taxable year.

31.) Which is not required to withhold?

a. Individuals engaged in business or profession
b. Individuals earning purely compensation income or casual income

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c. Non-individuals (corporation, association, partnership; cooperatives) whether or not engaged in
business
d. Government agencies and instrumentalities (NGAs, LGUs, GOCCs)

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32.) Which is not a creditable withholding tax?
a. Withholding tax on compensation

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b. Expanded withholding tax
c. Withholding tax on government money payments on VAT or percentage tax
d. Withholding tax on dividends and interest

Transfer Taxes
33.) R
Mr. Jerick received in trust a property worth P1,400,000. Jerick was entrusted to be the fiduciary heir to
the property left by his mother, Maria. While still living, Jerick transferred the same property to his younger
brother, Erwin, in accordance with the will of their mother, Marciana. The property was worth P1,500,000 at
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the date of transfer.

The property is
a. subject to donor’s tax at P1,500,000.
b. subject to estate tax at P1,500,000.
c. subject to donor’s tax at P1,400,000.
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d. exempt from transfer tax.

34.) During his birthday, Mr. Fu Chen made the following transactions in properties:
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Cash donation to his wife P 500,000

Oral donation of house and lot 3,000,000
Sale of residence with P4M fair value 1,000,000

Compute the donor’s tax.

a. P0 c. P195,000
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b. P165,000 d. P225,000

35.) The following relates to a transfer made by a seller:

Selling price P 1,500,000

Fair value of property at date of sale 4,000,000
Fair value at death of the seller 5,000,000

Assuming that title to the property was agreed upon to take effect on the date of death, what is the amount
of donation and the type of transfer tax to apply?
a. P0; none c. P2,500,000; donor’s tax
b. P1,000,000; estate tax d. P3,500,000; estate tax
FINAL PRE-BOARD EXAMINATION

36.) Rhad was indebted to Zeus with a P 50,000 interest-bearing loan. Rhad rendered services worth
P51,500 to Zeus. Zeus cancelled Rhad’s indebtedness when it was worth P51,500 including interest.

The cancellation of indebtedness is

a. subject to donor’s tax.
b. subject to estate tax.
c. exempt from transfer tax.
d. subject to both donor’s tax and estate tax.

37.) Mrs. Enriquez, a government employee, died in a car accident which resulted in the total destruction of
their family car.

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She left the following properties:

Receivable from the car insurance company P 800,000

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Benefits (receivables) from GSIS 1,000,000
Family home, bought using Mr. Enriquez’s salaries 2,000,000
Jeepney, bought using Mrs. Enriquez’s salaries 700,000

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Value of the car immediately before the accident 800,000
Clothing, shoes, and apparels of Mr. Enriquez 40,000
Clothing, shoes, and apparels of Mrs. Enriquez 60,000
Wedding gift, received by the spouses on April 1, 1990 120,000

Compute the gross estate of Mrs. Enriquez.

a. P3,620,000
b. P3,660,000
c. P3,680,000
d. P4,620,000
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38.) On June 4, 2021, Mr. Navarro died after 28 years of happy marriage. Mr. and Mrs. Navarro initially
started respectively with P2,000,000 and P1,000,000 properties. Their fruitful marriage accumulated
additional P80,000,000 properties for their twelve children.

Compute Mr. Navarro’s gross estate.

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a. P82,000,000 c. P80,000,000
b. P81,000,000 d. P79,000,000

39.) During their marriage, Mr. and Mrs. Rimando constructed a house using their salaries totaling
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P12,000,000. The lot was inherited by Mrs. Rimando when it was P8,000,000. Mr. Rimando died when the
house and the lot had fair values respectively of P15,000,000 and P12,000,000.

What is the deduction for family home?

a. P0 c. P7,500,000
b. P6,000,000 d. P10,000,000
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40.) A non-resident alien decedent had the following possible deductions:

Funeral and judicial expenses P 400,000

Obligations, 40% are payables in the Philippines 500,000
Losses of properties (60% occurred in the Philippines) 1,000,000
Transfer of Philippine property for public use 400,000

The decedent had a P4M ancestral house in the Philippine and P6M total foreign properties.

Compute the total deductions allowable for Philippine estate tax.

c. P1,000,000 c. P1,500,000
FINAL PRE-BOARD EXAMINATION
d. P1,080,000 d. P5,500,000

41.) Mr. Y, single, died leaving properties he inherited 2 ½ years ago with a current fair market value of P
800,000. The property was inherited when it was worth P1,000,0000 and had a P850,000 unpaid
mortgage. Mr. Y paid P550,000 until his death. Other properties of Mr. Y had a fair market value of
P1,200,000 at the time of his death.

The losses, taxes, and transfer for public purpose and P140,000.

How much was the vanishing deductions?

a. P139,500 c. P117,000
b. P180,600 d. P107,611

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42.) Don Pedro left behind the following properties to his heirs Juan, Pablo and Mateo:

Gross estate P 17,000,000

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Total allowable deduction for LIT 1,800,000
Transfer for public use 200,000
Family home 4,500,000

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There were P300,000 expenses for funeral and estate administration costs. P180,000 of the funeral
expenses were paid by friends and relatives. Pablo waived his share in the inheritance in favor of Mateo.
Compute the donor’s tax.
a. P0 c. P278,400
b. P276,000

43.)
d. P291,000 R
Mr. and Mrs. Jerry made a donation of P800,000 to their daughter, Jemma, on July 1, 2020. On August
1, 2020, they made another donation of P700,000 to Jemma. Compute the net gift of the spouses subject
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to tax as of August 1, 2020.

Mr. Jerry Mrs. Jerry

a. P750,000 P750,000
b. P500,000 P500,000
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c. P100,000 P100,000
d. P550,000 P0

44.) Mr. Kim Chi, a non-resident Korean donor, donated a car in the Philippines worth P500,000 to his
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resident Filipino best friend. Mr. Chi paid P12,000 donor’s tax in Korea on the donation. Korea do not
impose a donor’s tax on Filipino non-residents.

What is the donor’s tax still due in the Philippines?

a. P18,000 c. P3,000
b. P15,000 d. P0
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Value added tax & Percentage tax

45.) John, a VAT-registered realtor, disposed the following properties in the first quarter of the 2022:

Properties Selling price Fair value Terms

Property held for use P 2,240,000 P 2,100,000 30% downpayment
Property not used in business 1,400,000 1,500,000 Cash
Property held for sale - 1,200,000 Donation

Compute the output VAT and capital gains tax.

a. P240,000; P 90,000
b. P384,000; P 90,000
FINAL PRE-BOARD EXAMINATION
c. P396,000; P 0
d. P412,800; P 0

46.) Compute the donor’s tax and documentary stamp tax

a. P0 ; P74,100
b. P72,000 ; P72,000
c. P57,000 ; P56,100
d. P57,000 ; P74,100

47.) Compute respectively the output VAT, donor’s tax and documentary stamp tax on the property held for
sale if the same is donated to the government.
a. P0 ; P0 ; P0
b. P144,000 ; P0 ; P0

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c. P0 ; P57,000 ; P0
d. P0 ; P0 ; P18,000

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48.) A pharmacy reported the following sales at gross invoice prices:

To senior To other

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Goods sold: citizen/PWDs persons
Medicine for diabetes & hypertension P 500,000 P 1,500,000
Ordinary medicine and medical supplies 1,000,000 4,500,000
Other merchandise 400,000 1,200,000

a. P300,000 ; P732,000
b. P267,857 ; P653,571
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Compute the senior citizen’s discount and the output VAT.
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c. P380,000 ; P732,000
d. P339,286 ; P670,714

49.) Which is not subject to zero-rating?

a. Sale to an export-oriented enterprise whose export sales exceed 70% of total annual production
b. The actual exportation of good from the Philippines to a foreign country paid for in the local
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currency
c. Those considered export sales under E.O. 226 or the Omnibus Investment Code
d. Sale of raw materials or packing materials to a non-resident buyer for delivery to a local resident
export oriented enterprise if paid for in acceptable foreign currency
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50.) Which is wrong with respect to zero rated sales?

a. The refund of creditable input VAT shall be within 90 days counted from the date of filing the
application for refund up to the release of the payment of VAT.
b. Full or partial denial of the claim for tax refund by the CIR shall be appealed within 30 days to the
CTA.
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c. Under contemporary rule, only direct export is now zero-rated.

d. The sale of goods or services to PEZA-registered enterprises is subject zero-rated VAT if the same
is directly and exclusive used in their registered activities.

51.) A certain VAT taxpayer recorded the following in its books during the quarter:

Regular sales P 2,000,000

Export sales 1,500,000
Sales to the government & GOCCs 1,000,000
Exempt sales 500,000
Total Input VAT P 300,000
FINAL PRE-BOARD EXAMINATION
A total of P 60,000 input VAT is traceable to export sales and half of this was claimed for refund.

Compute the total creditable input VAT.

a. P276,000
b. P246,000
c. P240,000
d. P238,000

52.) A sugar processing plant voluntarily registered as a VAT taxpayer on January 5, 2022 after a year of
operations. The following were taken from its records in the first quarter of 2022:

Beginning inventory
– sugar cane P100,000

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– supplies (from non-VAT) 150,000
– raw sugar 80,000
– refined sugar 120,000

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Purchases
– sugar cane P500,000
– supplies from VAT suppliers 350,000

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Advanced VAT paid 50,000
Sales
– raw sugar P700,000
– refined sugar to private entities 1,100,000
– refined sugar to a government entity

Compute the total creditable withholding.

a. P95,000
R 400,000
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b. P67,400
c. P65,000
d. P45,000

53.) Compute the VAT payable.

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a. P85,000
b. P65,000
c. P62,600
d. P42,600
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54.) The China Bank, a domestic bank, shows the following data for the first quarter of 2022:

Rentals from safety deposit boxes and real property acquired through
foreclosure proceeding for bad loans P 880,000
Net foreign exchange gains (difference between the value of foreign currency 220,000
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sold and purchased)

Net trading gains from trading of securities, commercial papers and other
financial instruments (difference between the yield or selling price and the cost 660,000
of obtaining the same)
Trust fees 110,000
Dividend from domestic corporation 30,000
Other service fees 220,000
Interest income from lending activities from instrument with remaining term of:
Five years and less 700,000
More than five years 800,000

Compute the gross receipts tax for the quarter.

a. P0 c. P43,000
FINAL PRE-BOARD EXAMINATION
b. P189,300 d. P104,500

55.) A franchise grantee has a quarterly receipt of P2,000,000. Its annual receipts exceeded P10,000,000.
Compute its franchise tax assuming it is a franchise grantee of:

TV or radio Gas or water

a. P0 P 40,000
b. P 60,000 P 40,000
c. P 60,000 P0
d. P0 P0

56.) A government owned and controlled corporation had the following bills and payments for services:

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VAT resident suppliers P 1,120,000
Local water utility 100,000
Non-VAT resident suppliers 300,000

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Non-resident service providers 500,000
Compute the final withholding VAT and the final percentage tax.
a. P50,000; P3,000

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b. P50,000; P5,000
c. P110,000; P5,000
d. P110,000; P0

Documentary stamp tax

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ABC incorporated has 10,000 10% P100-par value participating preferred stocks and 1,000,000 no-par
value common stocks with a stated value of P10/share. The incorporators subscribed for all of the preferred
shares and 500,000 of the common shares for P12/share. Compute the documentary stamp tax.
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a. P70,000
b. P60,000
c. P52,500
d. P45,000

58.) Assuming that a shareholder with 1,000 preferred stocks and 100,000 common stocks subsequently
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sold his shareholdings for P110/share and P15/share respectively, compute the capital gains tax and the
documentary stamp tax.
a. P46,500; P7,000
b. P45,000; P7,000
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c. P46,500; P6,750
d. P45,000; P6,750

Excise tax
59.) Doc Kuma Rawa agreed to conduct a liposuction surgery for Miss Vale Yena on his clinic for a P50,000
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fee inclusive of excise tax and VAT. Compute the amount of excise tax and VAT.
a. P2,125.85; P5,357.14
b. P2,232.14; P5,625
c. P2,232.14; P4,464.28
d. P2,125.85; P4,464.28

60.) Which of the following is wrong with respect to excise tax?

a. Electric vehicles and utility vehicles are exempt from excise tax while hybrid vehicles are subject to half
of the applicable excise tax.
b. Basi or tapuy is exempt from excise tax.
c. Jewelry are subject to 20% excise tax except their imitations.
d. Metallic minerals are subject to 4% excise tax.
FINAL PRE-BOARD EXAMINATION
Local government tax
61.) A commercial lot is situated in Baguio City, Benguet with fair value per assessor of P10,000,000 and a
zonal value of P15,000,000. How much is the total real property and SEF tax? What is the deadline of
payment of the tax and the venue where it shall be paid?
a. P100,000; January 31, Baguio City
b. P100,000; February 28, Benguet Province
c. P150,000; January 31, Baguio City
d. P225,000; February 28, Benguet Province

62.) Markey owns a residential lot with a fair value of P5,000,000 is located in Mabalacat, Pampanga.
Compute the total real property tax including SEF if Markey pays the same on January 15 or on December
15 of the year.
a. P18,000; P29,800

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b. P20,000; P29,800
c. P36,000; P49,600
d. P40,000; P49,600

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63.) Which is incorrect with respect to business taxes?
a. Cities can impose a local business tax rate that is up to 50% higher than those of municipalities.

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b. Local business taxes can be paid annually on or before January 20 or quarterly within the first 20 days
of January and of the first month of each subsequent quarter.
c. Local business tax is assessed on the basis of gross sales or receipt which means the projected
collection from the current year.
d. A retailer with P 500,000 gross sales or receipt would pay P9,000 local business tax.

64.)
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Which is incorrect with local business taxes, fees and charges?
a. If the primary purpose of the imposition is the generation of revenue while regulation is merely
incidental, then it is a tax. If the primary purpose is regulation, then it is a fee.
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b. Fee determination shall be based on finding a balance between recovering the cost of service and the
ease of doing business.
c. Licenses and permits shall be issued by the local chief executive.
d. Professionals shall be required to pay business permit fees.
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Preferential taxation
65.) Which is false with respect to tax incentives granted by law to senior citizens?
a. VAT exemption on purchase of medicines and medical equipment
b. VAT exemption on qualified basic services such as restaurants, hotel, transport service, funeral
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parlor, medical and dental services

c. Senior citizens are entitled to 20% special discounts on groceries.
d. Senior citizens are entitled to a 5% special discounts but without VAT exemption on basic
necessities and prime commodities, except when they buy from sari-sari store, cooperative store,
wet market or talipapa.
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66.) A non-VAT corporate taxpayer registered as a BMBE had the following during the first quarter of 2022:

Registered Unregistered
activities activities
Sales P 400,000 P 500,000
Cost of sales 50,000 100,000
Gross income P 350,000 P 400,000
Expenses 150,000 100,000
Net income P 200,000 P 300,000

Compute the income tax due of the BMBE and its percentage tax.
a. P125,000; P 5,000 c. P60,000; P 9,000
FINAL PRE-BOARD EXAMINATION
b. P75,000: P 5,000 d. P0; P 0

67.) Jejeyu Company a registered its expansion project with the BOI and qualified for an income tax holiday.
Jejeyu is manufacturing a single type of product. The expansion project costs P100M and tripled revenues
to and profits to P150M and P60M, respectively, in the first year of its expansion. Production volume after
expansion also doubled to 20,000 units. What is the rate of exemption and the income tax due for Jejeyu
Company?
a. 66%; P5,000,000
b. 50%; P7,500,000
c. 33%; P10,000,000
d. 60%; P6,000,000

68.) In 2022, S2Tech, is an export enterprise located in Urdaneta, Pangasinan. It manufactures import

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substituting items. What are the tax incentives available to for S2Tech?
a. 5 years ITH and 10 years SCIT
b. 5 years ITH and 5 years enhanced deductions

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c. 7 years ITH and 10 years SCIT or enhanced deductions
d. 7 years ITH and 10 years enhanced deductions

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69.) Which is incorrect with respect to tax incentives under CREATE?
a. RBEs are required to submit an annual tax incentive report (ATIR) and annual benefit report (ABR)
within 30 days from the statutory deadline of filing of tax returns and payment of taxes.
b. Domestic market enterprise shall be entitled to 4 to 7 years ITH and 5 years of SCIT or enhanced
deductions.
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c. The enhanced deduction for NOLCO allows carry-over of NOL sustained in the first 3 years of
commercial operation to the next 5 consecutive years.
d. The 5% SCIT shall be divided as 3% to the National Government and 2% to the local treasurer of the
municipality or city where the enterprise is located.
PA

70.) Crossborder Inc., a domestic corporation failed to submit a tax residence certificate (TRC) to the IRS of
the United States where it is operating. Philippines and US has an outstanding tax treating subjecting their
citizens with preferential tax rates. Crossborder Inc. has a global taxable income of P10M where P4M is
attributable to the US. The US tax corporations in their jurisdiction at 30% while the RP-US treaty imposes
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a 20% preferential tax. Determine the applicable foreign tax credit for Philippine taxation.
a. P0 c. P1,000,000
b. P800,000 d. P1,200,000
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TAXABLE INCOME PER YEAR INCOME TAX RATE

P250,000 and below 0%

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Above P250,000 to P400,000 20% of the excess over P250,000

Above P400,000 to P800,000 P30,000 + 25% of the excess over P400,000

Above P800,000 to P2,000,000 P130,000 + 30% of the excess over P800,000

Above P2,000,000 to P8,000,000 P490,000 + 32% of the excess over P2,000,000

Above P8,000,000 P2,410,000 + 35% of the excess over P8,000,000