1.

Which of the following is subject to fringe benefit tax

A. Fringe benefit of the rank and file employees
B. Fringe benefit of the managerial employees
C. Compensation income of the rank and file employees
D. Compensation income of the managerial employees

2. As a rule, fringe benefit furnished or granted in cash or in kind by an employer to an individual employee
maybe subject to the fringe benefit tax, if given to
I. Rank and file employees
II. Managerial employees
III. Those holding supervisory positions

A. Only I and II C. Only II and III

B. Only I and III D. I, II and III

3. Fringe benefit tax is

I. Imposed on the employer
II. Withheld at source
III. Deductible by the employer

A. Only I and II C. Only II and III

B. Only I and III D. I, II and III

4. With regard to the amount on which the fringe benefit tax rate is applied, which statement is wrong?

The tax benefit rate is applied on

A. The monetary value of the fringe benefit
B. The gross-up monetary value of the fringe benefit
C. The amount deductible by the employer from gross income
D. Both accounts of the fringe benefit and the fringe benefit tax

5. The following fringe benefits are not subject to fringe benefit tax, except
A. If required by the nature of or necessary to the trade, business or profession of the employer
B. Contributions of the employer for the benefit of the employee to retirement, insurance and hospitalization
benefit plan
C. Benefits given to the rank and file employees
D. If given for the convenience or advantage of the employee

6. Basic rules on fringe benefit tax, except

A. Fringe benefit given to rank and file employees is not subject to fringe benefits tax
B. Fringe benefit given to a supervisory or managerial employee is subject to fringe benefits tax
C. De minimis benefit whether given to rank and file employee or to supervisory or managerial employee is
not subject to fringe benefit tax
D. The fringe benefit tax is a tax paid by the managerial or supervisory employee

7. Statement 1: Non-resident alien not engage in trade and business are also subject to regular income tax.
Statement 2: For all taxable, taxable income means the pertinent items of gross income not subject to capital
gains tax and final tax less allowable deductions.

A. True, False C. False, True

B. False, False D. True, True

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8. Statement 1: Employed taxpayers can claim expenses from their employment as deductions against their
compensation income.
Statement 2: Items of gross income subject to final tax and capital gains tax are excluded in gross income
subject to regular tax.

A. True, False C. False, True

B. False, False D. True, True

9. Statement 1: The P250,000 income tax exemption for individuals is designed to be in lieu of their personal
and business expenses.
Statement 2: Business expenses can be deducted against all types of gross income subject to regular tax.

A. True, False C. False, True

B. False, False D. True, True

10. Gain on the sale of goods manufactured and sold by the taxpayer within the Philippines is subject to tax
A. Within the Philippines C. Either within or without the Philippines
B. Without the Philippines D. Neither within nor without the Philippines

11. Vannah, a resident alien, and Darwin, a nonresident alien, executed a contract in Japan whereby Darwin shall
purchase the lot owned by Vannah in the Philippines. Vannah gains P1,000,000. Which is true?
A. The gain is exempt since the gain is derived outside the Philippines
B. The gain is not subject to Philippine tax since Vannah is a resident alien.
C. The gain is subject to Philippine tax because Vannah is a resident alien.
D. The gain is subject to Philippine tax because the property is in the Philippines.

12. Statement 1: Final tax is collected at source; hence, there is no need to file an income tax return.
Statement 2: Foreign income is subjected to final tax if the taxpayer is taxable on global income.
Statement 3: Items of passive income from abroad are subject to final tax.
Statement 4: Interest income on government securities are subject to final tax.

Which statement is true?

A. Statement 1 and 2 C. Statement 1 and 3
B. Statement 3 and 4 D. Statement 2 and 4

13. Which statement is correct regarding final income tax?

A. It covers all items of passive income from whatever sources.
B. It applies to all items of gross income of any nonresident earned from sources within the Philippines.
C. It applies to passive income earned abroad.
D. Taxpayers need not file an income tax return.

14. Which statement is correct regarding final income tax?

A. Items of income subjected to final tax can still be subjected to regular tax.
B. Final tax applies only on certain passive income earned within the Philippines
C. Items of income exempt under final tax are subject to regular tax
D. Final income tax applies to all passive income from Philippines sources.

15. Which of the following is subject to 15% final tax on interest from foreign currency deposits made with
Philippine banks?
A. Nonresident citizen
B. Nonresident alien engaged in trade or business
C. Nonresident alien not engaged in trade or business
D. Resident alien

16. The interest income from long-term peso deposits made with foreign banks is
A. Subject to 20% final tax C. Subject to regular tax
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 B. Exempt from any tax D. Subject to 15% final tax

17. The interest income from long-term peso deposits made with local banks is
A. Subject to 20% final tax C. Subject to regular tax
B. Exempt from any tax D. Subject to 15% final tax

18. Which is not subject to 20% final tax?

A. Interest income from trust funds C. Royalties from musical composition
B. P11,000 worth of prizes D. Winnings

19. Which winnings is taxable to a final tax?

A. Non PCSO winnings exceeding P10,000
B. Non PCSO winnings not exceeding P10,000
C. PCSO winnings exceeding P10,000
D. All of these

20. Prizes from sources abroad is subject to final tax

A. If the amount of prizes exceeds P10,000
B. If the amount of prizes does not exceed P10,000
C. If it is given to the taxpayer without effort
D. Under no circumstances

21. The winnings of a resident alien from abroad is

A. Subject to regular tax C. Subject to final tax
B. Subject to capital gains tax D. Not subject to Philippine income tax

22. What is the applicable tax type and tax rate if a resident citizen earned interest from a peso bank deposit, BPI,
Makati?
A. 20% final tax
B. 10% final tax
C. Exempted from taxation
D. Regular tax (graduated tax table)

23. What is the applicable tax type and tax rate if a resident citizen earned interest from a dollar deposit, HSBC, New
York USA?
A. 20% final tax
B. 10% final tax
C. 15% final tax
D. Regular tax (graduated tax table)

24. What is the applicable tax type and tax rate if a resident citizen earned royalties from books published in the
Philippines?
A. 20% final tax
B. 10% final tax
C. 8% final tax
D. Regular tax (graduated tax table)

25. What is the applicable tax type and tax rate if a resident citizen earned royalties from books published in the
Africa?
A. 20% final tax
B. 10% final tax
C. 8% final tax
D. Regular tax (graduated tax table)

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