21.

The amount of de minimis benefits conforming to the ceiling of de minimis benefits shall be:
I. Exempt from income tax, regardless of the rank of the employee.
II. Not be considered in determining the ceiling of other benefits excluded from the gross income
under the Code, as amended.
= Both
22. Which of the following shall not be subject to the 20% final withholding tax beginning
January 1, 2018?
= Prizes amounting to the thousand pesos (P10,000) or less.
23. The following are the classifications of Trusts, except
= Employer’s trust
24. Statement 1: Meal allowance and lodging furnished by the employer to the employees are
exempt from tax if furnished for the “advantage or convenience of the employee”.

Statement 2: Tax exempt meal allowance should be furnished within the premised of the
employer.
= F,T
25. Which of the following statements about interest income from long-term deposit is false?
= If a long-term deposit is pre-terminated, the applicable rate on the interest income is 0% if the
holding period is 4 years to less than 5 years.
26. Which of the following statements is correct?
I. The term “domestic” when applied to a corporation, means created or organized in the
Philippines or under the laws of a foreign country as long as it maintains a Philippine Branch
II. A corporation which is not domestic, may be a resident (engaged in business in the
Philippines) or nonresident corporation (not engaged in business in the Philippines)
III. Resident foreign corporations are subject to income tax based on net income from sources
within the Philippines.
= II and III
27. Income payment made by top withholding agents, either private corporations or individuals
to their local/resident supplier of goods and local/resident supplier of services other than those
covered by other rates of withholding tax
Supplier of goods Supplier of services
1%; 2%
28. The income tax due of a mixed income earner who opted to be taxed at 8% income tax rate
shall be:
= The sum of A and B

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 29. Beda University granted a scholarship grant abroad to Nena, one of its regular faculty
members. The management of Beda believed that the university will be able to improve its
accountancy program through the scholarship grant. Nonetheless, no written contract was
executed between Beda and Nena requiring the latter to remain as an employee for a certain
period of time. The scholarship grant is:
= Subject to basic income tax or fringe benefit tax depending on the rank of Nena
30. On January 1, 2018, A established a trust fund for the benefit of his son, C. A appointed B as
the trustee. The property transferred to the trust is a piece of land with a dormitory earning rental
income. During the year, the trust earned P40M revenues and incurred expenses of P10M. Out of
the trust’s income, B gave C P10M cash. In the same year, C earned compensation income of
P3M. The taxable income of the trust is?
= 20M

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