Withholding System: FWT and CGT d.
d. On or before Mar 31 following end of calendar year
(Discussion Material)
1. Withholding of taxes shall be whichever is earliest
among: (Choose the exception).
a. Payment
b. Accrual
c. Recording the in the books
d. None of the above.
2. In a transaction where there is withholding of
taxes, it is the party who withholds the tax:
a. Income Payor
b. Income Payee
c. Withholding Hands
d. Withholding Tax
3. Under the law, who are withholding agents?
(Choose the exception)
a. DEPED, a government agency
b. MISS-MO Co., a private corporation
c. Ms. Sai, a business-woman
d. Ms. Mae, an employee of MISS-YOU Co.
4. Which of the following incorrectly describes the
withholding system in the Philippines?
a. Promotes administrative feasibility in the sense
that it is a system convenient on the end of taxpayer
and the government
b. A manner of collection
c. To improve government’s cashflow
d. Income earned abroad is subject to withholding tax
in the Philippines
5. Under Final Withholding Taxation, tax withheld
constitutes full and final payment of the tax.
a. Yes, therefore it necessitates that there be filed by
the taxpayer-payee an income tax return
b. Yes, therefore it does not necessitate that there be
filed by the taxpayer-payee an income tax return
c. No, payee still needs to file a return as a
compliance requirement and doing so may entitle the
payee income tax credit against his tax liability
d. No, there is no such thing as final payment of the
tax.
6. Under the Creditable Withholding Taxation, tax
withheld constitutes an advanced and approximate
payment of the tax.
a. Yes.
b. No.
c. I do not know the answer. Ask my lawyer.
d. Confidential.
7. BEBE Co., a corporation engaged in shipping
operations is registered with the BIR. Under the
regulations, shipping operation is under Group A of
the industry classification. As such, filing of its
withholding tax returns should be within:
a. 10th day of the month after the taxable month
b. 12th day of the month after the taxable month
c. 20th day of the month after the taxable month
d. 15th day of the month after the taxable month
8. What BIR Form should be filed by MHINE-COEH-
LANG Co. with the BIR when it comes to its
QUARTERLY Expanded withholding taxes?
a. 0619E, with quarterly alphalist of payees
b. 1601-FQ, with quarterly alphalist of payees
c. 1601-EQ, with quarterly alphalist of payees
d. 1603, with quarterly alphalist of payees
9. BHOSZX-M4P4GM4H4L Co. should file its BIR
FORM 1604-E on or before:
a. On or before Jan 31 following end of calendar year
b. On or before Feb 28 following end of calendar year
c. On or before Mar 1 following end of calendar year
Compute for the final tax.
10. Ms. Sai is an employee of LOVE Co. She just
resigned at the end of October 2023. Under the law,
her employer should give a copy of what BIR Form?
a. BIR Form 2317
b. BIR Form 2316
c. BIR Form 2307
d. BIR Form 2306
11. Which is correct with regard to the final income
taxation?
a. Taxpayers need not file an income tax return.
b. It covers all items of passive income from whatever
sources.
c. It applies to all items of gross income of any non-
resident earned from sources within the Philippines
d. It applies to passive income earned abroad.
12. All of the following rules on final taxation shall
apply to all (except):
a. Resident citizen
b. Non-resident citizen
c. Resident Alien
d. Non-resident alien engaged in trade or business
e. Non-resident alien NOT engaged in trade or
business
f. Domestic corporation
g. Resident corporation
h. Non-resident foreign corporation
INTEREST INCOME
13. The interest income from peso deposits subject to
20% final income tax must arise from all (Choose the
exception/s):
a. local currency bank deposit
b. deposit substitute
c. trust fund
d. promissory note
e. interest income from a foreign bank
14. Interest income from long-term deposit is not
applicable to:
a. Resident citizen
b. Resident corporation
c. Resident alien
d. Non-resident citizen
15. Which of the following is subject to the 15% final
tax on interest from the foreign currency deposits
made with Philippine banks?
a. Non-resident corporation
b. Non-resident alien engaged in trade or business
c. Non-resident alien not engaged in trade or
business
d. Resident alien
16. On January 1, 2023, Camusta K. Nah (a resident
citizen) invested P2,000,000 in a three-year time
deposit of MISS-YOU Bank which pays 10% annual
interest. Compute the final tax withheld by MISS-YOU
Bank on December 31, 2023.
17. Assuming Camusta K. Nah is a non-resident
citizen. Compute the final tax withheld by MISS-YOU
Bank on December 31, 2023.
18. Assuming Camusta K. Nah is a non-resident alien
NOT engaged in trade or business here in the
Philippines. Compute the final tax withheld by MISS-
YOU Bank on December 31, 2023.
19. Assuming Camusta K. Nah is a domestic
corporation. Compute the final tax withheld by MISS-
YOU Bank on December 31, 2023.
20. On January 1, 2023, Anne O. Gawa-Moe (a
resident citizen) invested 1,000,0000 pesos in a 7-
year time deposit which yields 5% interest per
annum.
21. Assuming Anne O. Gawa-Moe is a domestic
corporation, compute the final tax.
22. Assuming Anne O. Gawa-Moe pre-terminated the
time deposit on Dec. 31, 2026, compute the final tax.
23. Miss Yu is a proud wife of Mr. Red Flag. They are
both resident Filipinos. He invested his 5,000,000-
peso savings account under the Foreign Currency
Bank Deposit System (FCDS) yielding 12% in interest
per year. Compute for the final tax.
24. Assuming that instead of a personal savings
account, Mr. Red invested the same in a joint-
account under the FCDS and he is an OFW, compute
for the final tax due.
ROYALTIES
25. Which is subject to final taxes?
a. Active royalties earned in the Philippines
b. Active royalties earned abroad
c. Passive royalties earned in the Philippines
d. Passive royalties earned abroad
26. Which taxpayer is entitled to a reduced final tax
rate when it comes to royalties arising from printed
books, musical composition, or literary works?
a. Resident corporation
b. Domestic Corporation
c. Non-resident alien not engaged in trade or
business
d. Non-resident citizen
27. Sai U. Lang-Kakalampag, a well-known computer
programmer in her time designed a program for the
public’s use. As such, she gained 500,000 pesos in
royalties. Compute for the final tax due.
28. Assuming Sai U. Lang-Kakalampag is a domestic
corporation, compute the final tax due.
29. Assuming that instead of designing a program,
Sai U. Lang-Kakalampag published a book titled “Ang
alamat ng GENG-GENG”, compute for the final tax.
30. Go back to the original facts but assume that the
program is exercised abroad. Compute for the final
tax.
PRIZES AND WINNINGS
31. 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 circumstance.
32. Which of the following is taxable to regular rates?
a. Prize on sports competitions sanctioned by the
national sports organization
b. Prize from dance competition abroad
c. Nobel prize
d. Any prize received without effort
33. Which winning is taxable to a final tax?
a. Winnings exceeding P10,000
b. Winnings from PCSO lotto
c. Winnings not exceeding P10,000
d. All of these
34. The following are subject to final tax, except one.
Which is the exception?
a. jueteng winnings
b. PCSO winnings not exceeding P10K
c. Lotto winnings exceeding P10K
d. All of these
35. True or False. Prizes and winnings received by a
corporation other than an NRFC is never taxable
under final income taxation.
36. Madali Lang is a resident citizen of the domestic corporation 49. JCD, a handsome CPA (tax practitioner and a
Philippines. The following are received by him in part-time academician) has the following properties:
2023: (Determine whether each of the following is an
Lawyer Corp., a 30%
ordinary or capital asset)
resident foreign I. Laptop used in preparing the tax returns of his
Interest, $ deposit, 420,000 corporation clients
BDO under the FCDS II. Basketball used in playing with his friends
($10,000 x P42) III. Taxation books and reviewers used in his part-
time teaching
Interest, peso deposit, 100,000 IV. Receivable extended to one of his friends
Compute for the final taxes to be withheld for each of
MBTC V. Cellphone used for bebe-time purposes
the shareholders.

42. Three Kings partnership is a business firm 50. Which is subject to the 15% capital gains tax?
Prize won in a local 130,000 a. Sale of domestic stocks directly to a buyer within or
engaged in the sale of notebooks. King Charles, a
lottery outside the Philippines
resident alien and one of the partners, has a one-third
share in the profits of the partnership. The profit for b. Sale of domestic bonds directly to a buyer within or
Prize won in contest in 40,000 outside the Philippines
2023 amounted to 30,000. Compute for the final tax.
US 43. Assume that Three Kings partnership is a general c. Sale of domestic stocks through the Philippine
professional partnership, compute for the final tax. Stock Exchange
PCSO winnings 12,000 d. All of the above
INCOME OF NON-RESIDENTS
Dividend from a 10,000 44. Geng Geng, an Indian national who is residing in 51. The term "other disposition" cover all except:
domestic corporation Iraq had the following income in 2023 earned in the a. Foreclosure sales
Philippines: b. Expropriation by the government
Lotto winning in US 15,000 c. Auction sale
d. Succession

Income from royalties 200,000 52. The sale of listed shares will be subjected to:
a. 15% capital gains tax
Compute for the (1) final tax due and (2) income Income from dividends 150,000 b. 60% of 1% percentage tax
subject to regular tax. c. donor’s tax
Income from casual 200,000 d. estate tax
DIVIDEND INCOME sale of goods
53. Which is an incorrect statement?
37. Which is covered by final tax? Interest Income from 10,000 a. The capital gains tax on the disposition of capital
a. Interest income from foreign banks stock presumes the existence of gain on the sales
FCDS
b. Share in the net income of a joint venture transaction.
c. P10,000 taxable prizes from the Philippines b. The buyer of real property capital asset shall
Interest income on 150,000
d. Share in the net income of a general professional withhold the tax as he remits the same to the
partnership Tax-free Covenant
Bonds government.
c. Capital gains tax is identified under the NIRC as a
38. S1: Corporation’s definition is the same under form of final tax
the Revised Corporation Code and the Tax Code. d. The capital gains tax on the disposition of real
S2: Corporation under the Tax Code includes property presumes the existence of gain on the sales
partnership. Hence, share of partner in a business Compute for the final tax. transaction.
partnership is treated as a dividend.
CAPITAL GAINS TAXATION 54. The 15% capital gains tax does not apply to
39. The following dividends shall be taxable under a. Resident citizen dealers of stocks
final income taxation except: 45. Same with final withholding taxation, the situs for b. Non-resident citizen dealers of cars
a. Cash dividend the applicability of capital gains taxation should be C Resident alien dealers of computer parts
b. Property dividend within the Philippines. d. domestic corporations dealing in real properties
c. Stock dividend a. Absolutely true
d. Scrip dividend b. Absolutely false 55. The documentary stamp tax on the sale of
c. Absolutely amazing. domestic stocks directly to a buyer is based on the:
40. Dividends declared by a resident corporation is d. Absolutely confidential. a. Selling price
a. exempt from any tax. b. Par value
b. subject to regular income tax 46. Which is an ordinary asset? c. Fair Value
c. subject to 10% final tax. a. Personal car of James Yap d. Cost
d. subject to 20% final tax. b. Cellphone sold by Rendon Labador, a cellphone
dealer 56. Bey Sik, an individual taxpayer, sold domestic
41. SUKO-NA-BA? Corp. declared and paid cash c. Principal residence of the taxpayer of Haring shares directly to buyer. The following relates to Bey
dividends amounting to P500,000. Its shareholders Bangis Sik:
are as follows (with each respective share in the d. Wedding ring of the taxpayer of Scottie Thompson Fair market value of shares: 300,000
corporation): Selling price: 295,000
47. Which is an ordinary asset? Cost: 130,000
a. Personal laptop of the taxpayer
Future Sipiey, a 5% b. Real property held for sale Compute the capital gains tax.
resident citizen c. Machineries and equipment
d. Leasehold improvements 57. Yssey Ly sold domestic stocks directly to a buyer
Future Siemey, a non- 15% at a 10% mark-up on the cost of P200,000. He paid
48. Which is a capital asset to a realty developer? P2,000 broker's commission and P3,000 other direct
resident alien engaged
a. Construction equipment acquisition costs on the sale.
in trade or business b. Vacant lot held for future development
c. Domestic stocks Compute the capital gains tax.
Future Siayey, a 10% d. Head office building of the developer Which is an
resident alien ordinary asset 58. Assuming that on number 57, Yssey Ly is a
dealer in domestic securities, compute for the
Abugado Corp., a 40% applicable capital gains tax.
59. Assuming that on number 57, the stocks sold THREE-FOURTHS (3/4) of the proceeds thereof to his printed
directly to the buyer were foreign stocks. Compute for buy a new principal residence (and other requisites musical
the applicable tax. for exemption were complied with), compute for the composition
tax basis of the new residence. entitled, “KAYA
60. Deffy Cult, a non-resident citizen, sold domestic 73. Go back with the original facts, but assume that PA BA?”
stock rights via the local stock exchange at a net gain the residential house and lot is situated in Australia,
of P320,000. Compute the capital gains tax. compute for the capital gains tax. Dividend 33,000 12,000
61. Which of the following is correct regarding the 74. \Who shall file the capital gains tax return for the Share in a 11,000 NONE
compliance requirements for the 15% CGT? sale, exchange and other deposition of real property?
business
a. Filed within 30 days from sale: BIR Form 1701 a. Seller, within 30 days from date of sale
b. Filed within 15 days from sale: BIR Form 1707 b. Buyer, within 30 days from date of sale partnership
c. Filed within 30 days from sale: BIR Form 1707 c. Transfer agent, within 30 days from date of sale
d. Filed within 15 days from sale: BIR Form 1701 d. The registry of deeds, within 30 days from date of Winnings from an 30,000 5,000
sale electronic draw
62. Which of the following assets may be subject to
capital gains tax upon disposal? BONUS QUESTIONS: Winnings from 9,000 15,000
a. Farm lot of a retired PBA player PCSO
b. Parking lot 1. Final taxes are non-creditable against the regular
c. Dormitory leased out to students income tax due. Nobel Prize 50,000 17,000
d. Office supplies 2. 15% capital gains tax necessitates occurrence of Award
actual gains rather than presumed gains.
63. Which of the following when sold may be 3. Capital asset includes inventory of the taxpayer. Prize from a 70,000 30,000
exempted from the 6% capital gains tax? 4. Dividend from foreign corporations received by a singing
a. Unused land to the government resident alien is subject to a final tax of 10%. competition
b. Property expropriated by the government 5. BIR Form 1706 is used when filing for the 6%
c. Developed residential properties for sale capital gains tax. Winnings from a 12,000 60,000
d. Principal residence lottery

64. Which scenario will warrant the alternative Sale of a Price: 13,000 NONE
taxation scheme for real properties held as capital domestic stock Cost: 5,000
assets? directly to the
a. Buyer is individual, seller is government
buyer
b. Buyer is government, seller is individual
c. Buyer is corporation, seller is government COMPREHENSIVE:
Sale of a Price: 14,000 NONE
d. Buyer is government, seller is corporation
domestic stock Cost: 6,000
The following relates to the income and activity of
65. The basis of the 6% CGT is the highest among Jeysidi Sipiey, a resident citizen (a CPA-lawyer, via the Local
all, except one: practitioner, academician, and a future loving Stock Exchange
a. Selling price husband) of the Philippines:
b. Fair value per CIR Sale of personal 7,000 3,000
c. Fair value per PFRS 13 property held as
d. Fair value per city or provincial assessor’s ofice a capital asset
Sourced from Sourced
66. S1: A 6% Capital Gains Tax is imposed on the the Philippines: from Sale of real Price: 1.5M 1.3M
presumed gain from the sale of real property, based Abroad: property held as Zonal value:
on the gross selling price, the BIR zonal valuation or a capital asset 1.8M
the value per provincial or city assessor’s office of the Interest income 200,000 50,000 Value per
property, whichever is highest. from CPA bank, assessor’s
S2: The alternative taxation scheme for real related deposit is office: 1.4M
properties happen in the case the government held for 2 years
exercise its power of eminent domain. Sale of ordinary 50,000 12,000
Interest income 180,000 5,000 asset
67. Tax Master, an individual, sold a residential from ATTY bank,
house and lot for 10,000,000 pesos to his friend, Tax related deposit is Reward from the 800,000 NONE
Lodi. The fair value thereof is 9,000,000. The tax held for 8 years BIR for reporting
basis of the property to Tax Master is 8,000,000 fraudulent
pesos. Compute for the capital gains tax. Interest income 150,000 15,000 activities of some
from FCDS, taxpayers who
68. Assuming that the buyer of the property is the are not his clients
under his
government, compute the capital gains tax if Tax
personal savings
Master opted the alternative taxation scheme.
69. Same assumptions with number 68 but Tax account
Master is a corporation and it opted the alternative
taxation scheme. Interest income 130,000 NONE
70. Assuming that the residential house and lot is the from FCDS, Compute for:
principal residence of Tax Lodi and that he used the under a joint (1) Total FINAL TAX due
proceeds thereof to buy a new principal residence account with his (2) Total CAPITAL GAINS TAX due
(and other requisites for exemption were complied long-time (3) Total income subject to regular income tax
with), compute for the capital gains tax. girlfriend, Ambot (4) Stock transaction tax
71. Assuming that the residential house and lot is the Saimo (5) Total EXEMPT income
principal residence of Tax Lodi and that he used
THREE-FOURTHS (3/4) of the proceeds thereof to Royalties from 30,000 8,000
buy a new principal residence (and other requisites computer
for exemption were complied with), compute for the program
capital gains tax.
72. Assuming that the residential house and lot is the Royalties from 45,000 6,000
principal residence of Tax Lodi and that he used