erentaye Tayes

QUIZZER
Choose the letter of the correct answer.

Principles
1 Statement 1: Otner percentage taxes are indirect taxes that can be passed on by person
required to pay to another person who shall bear the burden of paying the tax.
Statement 2: Iransactions that are subject to the other percentage taxes are no longer
Subject to the value-added tax but may be subject to excise tax.
a. Only statement 1 is correct
b Only statement 2 is correct
C. Both statements are correct
d. Both statements are incorrect

Answer: C
Statement 1: Business taxes are indirect taxes
Statement 2:
Sale or Transaction (transaction level only) = may be subject to either vat OR percentage tax
only + excise tax, if applicable.
Taxpayer (entihy levet individuals, corporations, etc.) = may be subject both to vat and
percentage tax +excise tax, if applicable, provided the taxpayer is engaged in mixed
transactions (vatable business and non-vatable business).

2. Statement 1: All VAT-exempt taxpayers shall be subject to other percentage taxes.

Statement 2: A taxpayer who is subject percentage tax on his gross receipt will also be

Subject to income tax on his net income.

a. Only statement 1 is correct
b. Only statement 2 is correct
C Both statements are correct
d. Both statements are incorrect

Answer: B
Statement 1:
and at the same time
Sale or Transaction if îh the list of vat exempt (therefore, non-vatable)
=

not in the list of transactions subject

to percentage tax (Sections 116 to 127 ofthe Tax Code).
from business tax (both vat and percentage tax; i.e., sale of
the transaction is exempt
state is not subject to vat and percentage tax)
agricultural food product original
Individual and corporation) MAY BE subject to OPT if
Taxpayer= A vat-exempt taxpayer (.e.,
to OPT
it is involved in a transaction subject under Sections 116 to 127 of the Tax Code, as
if such val-exempt suppler is engaged in a transaction which is not also
amended. However,
to OPT, Such taxpayer is exempt both from VAT and
included in the list of transactions subject
OPT.

Statement 2: Income tax is In addition to business tax

tax:
Which ofthe following is not correct? The percentage
a. Is a tax on sale of services.
. May be imposed on sale of goods.

673
 Percentag Tares
together
with the
value-added

excise tax.
tax. ercentate Taes
May be
imposed with the School bus Operator whose gross receipts for the
C.
imposed
together None of the above year amounted to P2,500,000
d. May be
transaction" may be: Answer: D
Answer: C business
a
taX t0or
paricular

The applicable general);

0 Section 116 shall apply ift
o
VAT(in
lax (if in the
list of OPT): or
1. he ransaction is vat
Percentage
tax if
nin the list of
the list exempt aand not
of vat exemot exempt and the reason for
laxpayer s gross sales or receipts did not exceed vat-exemption
the vat threshold sinply
is of P3M, ana
becaUSe
o
Exempt from
business
to OPT
includedinin the ist 2. The
transactions subject taxpayer is not vat registered.
of
VAT and OPT Dnotalowed
IS Owed toto be imposed atatine
be imposed the s

However,
particular "transaction".
same time toa f the
reason for vat exemption is not because of #s 1 and 2 above, the transacton is not
subject to Section 116.

is not correct
about percentage tax? The
statements taxpayer in item B" is known as Marginal Income Eamer (MIE), an
4. Which following
ofthebusiness gross sales or receipts during the year is not more than P100,000. MIE individual wnose
is not subject
tax. business tax (Vat and OPT). t
a. It is a
tax.
b. It is a transfer
tax.
C. ltis an ad valorem 8. The taxpayer is a trader of poutry feeds. Delermine his aplicable business tax
tax. a. Subject to 12% vat
d. ltis nota progressive
b. Vat exempt but subject to Pe entage Tax under Section 116
Answer: B transiers (donation or inheritance) while C. 12% vat or OPT under Section 116, at his option
Transfer tax is applicable gratuitouS
to
0 to onerous taxes.
percentage d. Exempt from 12% vat and OPT
tax and vat are applicable

Answer: D
5 Which statement is wrong? Refer to Quizzer #2, Slatement 1.
on sales of services.
a. Percentage taxes are basically to the customers or cliente
Sale of Poultry Feeds is vat exempt, but the reason for vat exemption is not simply because

b. Percentage taxes are not allowed by

law
t0 be shirted the seller's gross sales did not exceed the vat threshold of P3,000,000 but because poultiry
transaction the course
not in of bUsiness will not result in a liability for feeds are intended for poultryanimals.
C.An isolated
percentage tax
d. None of the above 9. One of the following is subject to Percentage Tax under Section 116 of the Tax Code:
a. Establishments whose annual gross sales or receipts exceed P3,000,000 and who
are VAT registered.
Answer:B
"C" is correct because it is not pertaining to a "business' transaction. lt may only be b. Businesses whose annual gross sales or receipts exceed P3,000,000 and who are
subjected to income tax. not VAT registered.
C. VAT registered establishments whose annual gross sales or receipts do not exceed
Section 116-OPT on vat exemptsales and transactions P3,000,000
d. Establishments whose annual gross sales or receipts do not exceed P3,000,000 and
6. A seler of food products is vat-exempt.
agricultural annual gross sales in 2020
His who are not VAT registered.
amounted to P3,000,000. To what business tax is he liable?
a. 3% tax on val-exempt persons under Section 116 of the Tax Code Answer: D
. 12% value-added tax
C. 3% common carier's tax under Section 117 of the Tax Code 10. Ana has the following data for 2019 the taxable year
d. none of the above Gross sales P2,850,000
Collections 1,420,000
Answer: D
Refer to the explanation in Quizzer #2, Statement 1. f Ms. Ana is a seller of goods, her business tax for the year should be
a. P42,600 OPT c. P170,400 vat
Prior to the effectivity e CREATE law, the tax rate under Section 116 was3o
Beginning July 1, 2020 up to June 30, 2023, the tax rate shall be reduced to 17. b. P85,500 OPT d. P342,000 vat

.Which of the following is subject to Percentage Tax under Section 116 of the lax Answer: B
a.. Fruit dealer whose gross receipts for the year amounted to P2,800,000 Ou OPT P2,850,000 x 3% = P85,500
is sales.
D. An individual The basis of business tax for sale of goods gross
whose taxpayer gross sales for the year amounted to P7000

675
674
 Percentage l,
ercentaye Tares
business tax for the veas

service,
ner
sellerof c. P170,400 vat Answer.B
Ana is a
11. If Ms. a. P42.600 0OPT d. P342,000 vat Percentage Tax, 1st
(P600,.000 1%) quarter a9t1
of
b. P85500 OPT PA,000
Excess perc9ntage tar
Answer: A P42,600 pad for the 4th quanter f 20 (4 6
OPT
P1,420,000 x3% saleof
of sservice is gross recepls or collection (P200,0002%)
lax for sale Percentage Tax Payable
Thebasis
of business
P2009

registered
EXCESSPERCENTAGE TAK PAYMENTS
12 IH Ana is vat to 12% vat EXCess percentage tax payments as a resit
of re tereae t tas rale from 7% D
She is subject D6ginnirng Juy *
under Section 116
1, 202) may te carried
a orward to the qateis ty rE
is subject to OPT
at heroption eXCeSS percenlage tax payment urder Lne 17 d ueirg
b. She vat or 3% OPT, te Percentage Tax Retum rom
cShe is subject
to 12% 25510). Oer Credn/Paymrent,
Tar spectjrg teren aaaryuer enes
exempt from
OPT under Section to opted be taxed at
8%
paid from previous quarler/s' (RR 4-2021) erEa
d. She is
Answer A nol applicable
tax is
to val registered taxpayers
TRANSITORY PERIOD: UNUTILZEOINPUT YA
The 8% optional

and assuming further that the taxable

her that taxable year iis 2020, the
vear 16. (Based on illustration provided in RR 4-2021). Omega Pharmaceuical Corp. incuTed
in number 10
13 Using the data Tax should be: COrrecl P20,000,000 of input tax for the period from purchases of medicines other than those
amount of Percentage prescribed for cancer and no additional purchases of prescripton drugs for cancer wes
c. P28,500
PO purchased dunng the period. There was an unutilized input tax of P10.000.000 coming9
d. P57,000
b. P14,000
from inventory of cancer drugs from previous period that was carried over to
Answer: D tne
January to June
= P2,850,000 x 6/12 x 3% P42,750 succeeding quarter and 50% of the inventory of cancer drugs was soid duning the perioa.
January to June
= P2,850,000 x 6/12 x 1% 1,250 Salessubject to vat during the curent period amountedto P300,000.000. How much is
Total P57,000 the vat payable?
a. P5,000,000 c. P25.000,000
OR: P2,850,000 x 2%"
=
P57,000
b. P11,000,000 d. P36.000.000
"transitoryrate (3% 1%)2=2%
= +

14. Using the same data in number 10 and assuming futher that the taxable year is 2021. the Answer: B
Sales subject to vat P00 000,000
Comect amount of Percentage Tax should be: Vat rate
C. P28,500 12%
a. PO
d. P57,000
Output Vat
Less: INPUT VAT for the period
P36 00000
b. P14,000
hnputvatcaied over from previous period (cancer drugs) P10.000.00
Input vat from curent purchases (non-cancer drugs 20.000.000
&Answer: C; 0PT:P2.850,000x 1%= P28,500 Total input taxes P30.000,000
Less: Input lax identillable to exempt sales (50% of inventory) (5 000.000) P25.000,000)
TRANSITORYPERIOD FORTHEREDUCED TAXRATE FROM3% TO 19 VAT Payable P11.000,000
15. ABC Corporation, a non-vat regstered seller of goods provided the following data: GUIDE:
2020 Taxable year. As a result of the additional vat exempt provisions introduced by the CREATE law. the laxpayer shall
treat the resulting excess taxes paid due to the inclusion in the tems exempt from vat or adjustment
Gross sales,4th quarter, P200,000. The applicable percentage tax was paid
January 25, 2021.
on
in percentage tax rates, as the case may be, in the folowing manner
1. Unutilized vat on local purchase or importaion may be caied over to the succeeding taxable
2021 Taxable year. quarter/s or be charged as part of cost.
Gross sales, 1st quarter, P600,000. Input vat which are directy atributable to goods now classified as vat exempt may be alowed
President Duterte signed CREATE bill into law on March 26, as part of cost.
2021. 3. For input vat that cannot be atribuled to goods now clasifed as vat exempt, only a ratable
'Under the CREATE law, the Percentage Tax rate under Section 116 of the lax portion thereof shall be charged to cost.
Code was reduced to 1% from
July 1, 2020 to June 30, 2023.
17. Alpha Pharmaceutical sold drugs for cancer which were part of the company's current and
How much is the
a. PO
Percentage Tax Payable for the 1st quarter of 20217 previous purchases. Total sales for the period is P50,000,000, 50% of which is vat
C. P4,000 exempt. The company also incumed P20,000.000 input vat for the period from purchases
b. P2,000
d. P6,000

676 677
 Percentage lates ercentaye Tlazes
prescribed tor
cancer.
There
cannot be.
was

unuttoiliztheed input vat of

tributed
inventoryot
those but
period
including previous
medicines
from
the be:
of coming
should
payable 6RFomNo
P 1 0 . 0 0 0 , 0 0 0

cancer.
The vat
c. P15,000,000

Quarterly Percentage Tax Return

drugs
for d . P30,000,000
2551
2551Q n TA LTE u
3. PO
b. P10,000,000

Frca3a
MFo he X end
Ended pam 12 2 01118
U a
0 00
A n s w e r : C

000 x 50%)
P250,000.000 Part-Bgound h365
vat
(P50,000,
12% 6Txpayer dercadion urrber (TI 42394 2 0,0 RDOC l01319
Sales
Vat rate
subject
to
P30,000,000
P10,000,00o MAGBA INUAFjljgTD
OutputVat VAT for
the period period
Less:
INPUT
from
previous
20,000,000
9.3 MASA YA S18R GYMA PAG PA NG, GA
camied
over SRegist
tnput vat P30,000,0000
vat from
cument
purchases

(15,000,000) MANLAL C I Y 1724

Input
Total input taxes sales (50% x ofsales)
(P15.000.000
Less Input tax
ratable to
exempl

sales shal
be charged to cost. P15,000,000 HO ContactN

VATPayable to exempt N 12Ayes spedy

The P15Mallocated 2 SpecalLas a irnemonal Tax TrE? eceps are abjea Percertag2
Only for individualpyesos
What inoome o n ne on
Gadud ecoe tade a

10 is a taxi
operator, TODe
e Crcur

ode yea e ncome

6 ne
18. fAna in number to 12% vat Section 117 Pati-Tot Ta Payable
is subject tax under
a. She
to c o m m o n carmiers
(emoeue
1 em ) 115 0 0 000
carrer's tax, at her option 14 Total1axDe
b. She is subject 12% vat or 3% common n
Less: Tax CredtFament (aacnproan
to
She is subject to be taxed at 8% 15Creditable Pecertageawhed per EiR Fam Na 2 L
from OPT if is she opted
Paidin Retim Previously Fied. I tis isaamended Retm
d. She is exempt 16 Tax
Answer: B to taxpayers who
are subject OPT other
ect to OPT other ihs.
than Secion 17 Other T CredaPayment (ypeca
tax is not applicable
0 T h e 8% optional oreditSFaymenES (Sum
a e s 15Tm
Tax Code, as amended. 18 Total
116 ofthe Payabetoverpsymet) e n 14tes
te 1 1510101QE 012
19 Tax Sll
who operates a conveniencestore. Add Penalbes
is a non-vat registered taxpayer
19. Floyd (self-employed) for 2020:
zSuc

The following were provided

21 Interesi

items P280,000
Sales of processed food 220,000
CoTprormse

Sales of non-food items 23 Total Penates (Sum oremS 20 10 22)

Purchases of processed food items 100,000 24 TOTAL AMOUNI PAYABLE|overpayment) Sum
dens 10 and 23 1151 01010010
Purchases of non-food items ,000 ovepaynen ma one pot only 1Oerdes ToDessoed a Tar Cedt Csme

Salaries of helpers ,000 PU he oova eane

tax due and prepare the percentage tax retun? idunder be Dei
Compute the correct percentage
| Fa NarHdota
For hdduat

a. P15,000 c. P50,000
FLOYD MAGBANUA
b. P32,000 d. P27,200 e over Rinted taayeAuoed
and TO
RepesantalveTxAgert eov Pd Naeo A
Answer: A
The taxpayer is non-vat registered + his gross sales did not exceed the vat threshold+ the Uon No Date aSSUe Ecy D

transactions are not exempt from val. Consequently, he is subject to 3% OPT under Section Part - D e t s . ofPaymen
116 of the Tax Code, as amended. Number DaeDomm Amourt
OPT P280.000+ 220,000) x 3% = P15,000 25 CashBank Debit beno
Check
20. Assume Floyd opted to be taxed at 8% on his gross sales and receipts, his aplicade
21axDebit Memo LLILLLLL LLI
business tax is 20 Others(Specy bel
a. Subject to 12% vat CeAAB ang Dae7e
Samparceng
b. Vat exempt but subject to 3% OPT under Section 116 (ROS Snanrebank Telers tnia)

C. 12% vat or 3% OPT, at his

d. None of the above
option
Answer: D NOTE Please read the eR Data PMacy Pokoy tound in e BRebce

678 679
 ercentade lates rcentae laxes
whose busines6 5 to keep autrmotiles for hre a ver tem stored for use or
22. A person
order
Keepers of garage
b. Common carier
Quarterly
Percentage Return
Tax Return
Taxicab operator
2551Q tun/Rogistored Name Noninave Tourist bus operator
a e sla Nae
UALELOYD,

J6510 0 MAG BAIN Answer:A

42 3194 2
Tax Dun
aNabile Amoun

23. A keeper of garage whoSe gposs receigts for 2020 exceed P3.000.000 s supect
to
15:001000010 0 LLIiS10.0.
P T0,10 a. Value-added tax
LILLLUL b. Garage sales tax
Common carriers tax
d Franchisetax

Doe/S0
ILL u5j010 01.l0.0 Answer:A keeper
C of garage s subject to comman camer's 2 egardless f te amout d s pos
heneikTex Cade jAi Tax On receipts
108)Sec f15)
Pursns e A und Sec
no parages S
24. Which of the following is subject to the 3% comman camers tax
OueiC

n caTanes whose anmuaigross recepts go o exceed P1O M(Sec 119) a. Transportation contractors on their ransportd gods or cargoes
(Sec 120)
a-22 carveail ongnatisg rom he Phugpines b. Common carriers by air and sea relatve to their tanspor of passengers
and vieoke ba's, krpoke bars, karaoke television, karaoe.
Paces suzaats nugnt day cubs, C. Owners of animal-drawn twO-wheeled vehide
m eizomerts fSec_ f125)
d. Domestic camiers by land for the trarsport of passengers

Bents Non sank Famancis t Perioming Oupi Banking Functionrs (Sec. 121)
te bsn T reruarng mturs T mshimerts rom ench such recegts are denved
Answer: D
A transport of goocs-subject to vava sea- suect to
8 :transport of passengers or goods air or
adrel meome of suticsanes
opet rea a persora profts from exchange and al other gross inONE Cexempt
4 n a pare hr e aut yex toregn aurency delt secutes dernvabves andother firanaal nstumens
Bn Fmc teredaries otPeriomung CsuaiBanking Fmctons Sec 122) rom heir incoming and
1 rmere commscs a dscourts trom lending acvites as wel as income rom mancal leasing.
25. Statement 1: The gross receipts of common camers denved
rte bas ofomaug malbusrtes of astuments trom whch tuch recepts are denved to the local taxes imposed under RA 7160,
otherwise
M.atuty penad s Ine (5) years a less outgoing freight shall not be subject
known as the Local Govemment Code of 1991
20 receipts
e meurance Pumums(Ser 123
af Fonegaeurance Coumpanies e 12 Statement 2: The 3% common camer's tax is based on the actual quarterny gross
of minimum quarterly receipt whichever is lower
Deers d popety doan rsuice Oirecoy wh bregh su Cfnpanies
a. Only statement 1 is corect
b. Only statement 2 is comrect
Section 117-Common Carriers Tax on Domestic Common Carriers C. Both statements are correct
This refers to persons, of d. Both statements are incomect
21. corporations, firms or associations engaged in the siness
amyng of ransporing passengers or goods or both, by land, water, and ar, Answer: A; Statement 2- shail de whchever is hgher
Compensation, offering their services to the public and shall include
Contractors. transponau
the transport of passengers,
26. A non-vat registered transportation contractor is engaged
in
a. Common carmiers,
liable?
b. Dealers in securities goods and cargoes. What business taxes is he
C. Lending investors; a. 12% value-added tax
d Franchise grantees. D. 3% common camier's tax
of and
Percentage tax under Section 116 on gross receipts from ransportof goods
frorm
C.
camer's tax on gross receipts transport passengers;
Answer: A cargoes and 3% common

681
680
 Percentafe Tayes
Percentaye lapes in the transport of ssengers, goods
and cargoes.

ofgo0ds. cargoes and 3% 31. A mestic carrier by sea is engaged

domest
not esceed
P3.000.000 during
receipts do
receipts
from
transport
of passengers Common It is not
VAT-registered and its annual gross
om ttransport
12% VAT
on gross
receijpts
from
To what businesS taxes is it liable?
2020.12% value-adde
d. tax on gross ax
camier's
Section 117) 3.
Section
116 and
Percentage tax under
Section 116
C; (subjectto b.
common carriers tax under Section
117
A n s w e r :

ceot that he
except that
he iIs a 3%
information
in the preceding
number,
val-registered C.
d. Not subject to business
tax.
the same to?
27. Using taxes is
he liable
What
business
Answer: B
12%
value-added
tax revised vat
exceeded the
receint
Code on gross
a.

b. 3%
COmmon
amer's
came
Sec. 116
of the lax receinte transport of
gross receipts trom transport of theannual gross receipts
in the preceding number
liable?
tax under carners tax on gross
32. Assume 2020. To what business taxes is t
threshold of P3,000,000 during
Peroentage common

and 3%
cargoes
goodsand of goods
goods and cargo0es
cargoes and 3% Common
12% value-added tax
passengers.
receipts from
transport or 3% or 1% OPT under
Section 116
transport of
passengers. b.
12% VAT on gross 117
on gross
receipt
from
C. 3% common carrier's tax under Section
camer's tax tax.
d. Not subject to business
+Answer:D

Operators of transport
facilitiesare Answer: A
incorect:
is
passena is not VAT-
of passengers. It
statements
One ofthe following receipts from transporting
28. value-added tax on gross carrier by land is engaged in the transport 2020. To what
Subject to the transporting go0ds and 33 A domestic P3.000,000 during
value-added tax on gross recelpts from annual gross receipts do not exceed
b. Subiect to the registered and its
business taxes is it
liable?
cargoes. tax on gross receipts
from transporting passengers, 12% value-added tax
Subject to percentage
value-added tax on gross
recelplS rom renting out its transportation
tation Section 116
d.Subjectto the b. Percentage tax under
under Section 117
facilites. C. 3% common carrier's tax
d Not subject to business tax.
Answer: A; (subjectto Section 117)
in the transport of goods. It is not VAT-registered
Answer: C land by domestic camers. t is suDect to
Common

29. A domestic carrier by land engaged

is f i t involves transport of passengers byTax Code. regardiess of the
amount of annual gross
not exceed P3,000,000 duning 2020. To what business Camiers Tax under Section 117 af the
and its annual gross receipts do
taxes is it liable? receipts.
a. 12% value-added tax exceeded the revised vat
in the preceding number
b. Percentage Tax under Section 116 34. Assume the annual gross receipts
2020. To what business taxes is it liable?
C. 3% common carriers tax under Section 117 threshold of P3,000,000 during
d. Not subject to business tax a. 12% value-added tax
116
b. Percentage tax under Section
Section 117
Answer: B 3% common carrier's tax under
C.
d. Not subject to business tax.
30. Assume the annual gross receipts in the preceding number exceeded the revised vat
Answer: C
threshold of P3,000,000 during 2020. To what business taxes is it liable?
domestic routes, had the following gross
a. 12% value-added tax 35. Maharlika Airlines, a domestic corporation plying of
b. 3% or 1% OPT under Section 116 2020: cariage of passenger, P4,500,000;,camiage
3% common cariers tax under Section
receipts for the month ended April business tax for the month ended April 2017 is:
C.
117 The correct amount of
d. Not subject to business tax. cargo, P7,000,000.
P0 c. P345,000
a.
b. P135,000 d. P1,380,000
Answer: A Answer: D
P1.380.000
(vat) (P4,5M+ P7M) x 12%
=
Business Tax =

Domestic airine companies are not subject

to Secton 117

683
682
 Percentae laxes
Usethe following
dataforthe next
questions:
(2)wo wilh routes from Manila toe
Subic and is Percentaye Taxes
of ten (10)
buses
40. Isarog registered common carrier with
is a vat r
Ananne isan
operator
contractor with
three (3) freight
For the taxable
trucks. Fo
year 2U21, she.
Her gross receinte1, She
kewise a onth of June 2021, it had the following
mor passenger buses andcargo trucks. Forthe
transportation
bus operaltions of P36,000,000.
PBO0,000 for the year
ceipts, however, reported o For
transporting
data on revenues and
receipts. taxes not
pasSenigers, gross revenues ard receipts not indluded:
gross receipts
from her
or cargoes
amounted only to ftom her o For
transporting cargoes, gross revenues of P220.000, of ofwhich
P3300
freight of goods received. P200,000 was
how much al busine
is her totalbusiness tax due? For
Anianne is non-vat
registered, renting out to the MMDA its
towing trucks, gross receipts of
36. Assuming c. P1,176,000
P50,000,
P1,088,000 representng P10,000 from gross revenue of the quarter ending March 31 and
b. P1,104,000
d. P4,416,000 P40,000 for
the month of June.
The percentage tax is:
a. P1,500 c. P15,900
Answer A P36M x 3% P1,080,000 b. P9,900
Common camer's tax
=
d. P17,400
Section 116 = P800,000
x 1% 8,000
1.088,000
Total business taxes
&Answer: B
oCommon Carier's Tax under Section
how much is her total business tay dse? The basis of business tax f from sale 117 P330,0001 3% P9,0 =

37. Assuming Arianne is vat registered, c. P1,176,000 it was eamed.

or service is colectcns r receicts, regardess o

a. P1,080,000
b. P1,104,000
d. P4,416,000
41. The value added tax is:
a. P24,000 C. P28,800
Answer: B P36M x 3% P1,080,000 b. P30,000 d. P25,000
Common carmier's tax
=

VAT P800,000 x 12% ,000 Answer: B

Total business taxes 1.176,000 12% Vat =(P200,000+ 50,000) x 12% P30.000 =

38. Pedro is a jeepney aperator. He is aso engaged in the business of leasing resideni 42. Milagros Lines, a VAT-registered person, has the following gross receipts in February
units. His gross receipts from his jeepney operation amounted to P5,000,000 for the ar. Bus 1 (cariage of goods, F 8,000) 100,000
The monthly rental of the residential unts is P14,000 WItn a total annual gross receits of Bus 2 (cariage of goods, P13,500) 165,000
P3,500,000 for 2021. Which of the following is correct? Taxi 90,000
a. Pedro is required to register under the vat system Jeepney 35,500
b. Pedro may apply for optional vat registration Cargo truck 45,000
C. Pedro is exempt from business and income tax Sea vessel 250,000
d. None of the above Additional Information:
Salaries of drivers and conductor 125,000
Answer:D Cost of oil and gasoline 175,000
H e is not required to register under the vat system nor
because his business activities are not subject to vat.
apply for optional vat registration During the month, Bus 1 was burmped by another bus owned by Mandaon Lines and
paid Milagros Lines P120,000 for thedamage
H e is not exempt from business tax. He is subject to common cariërs tax under Secion 117
of the Tax Code.
The percentage tax due on Milagros Line in February is:
a. P10,770 C.P11,715
39. All of the following, except one, are not subject to common carriers tax b. P14,370 d. nil
a. owner of a parking
lotbuilding
b. rent-a-car companies
C. common carriers engaged in Answer: A
d. domestic airine companies
carriage of goods or cargo Bus 1 P100,000-18,00 P82,000
Bus 2= P165,000- 13,500 151,5
Taxi 90,000
Answer: B; Choices 'a, 'c' and d' are
Jeepney 35,500
subject to vat. Total P359,000
x CCT
Trate 3%
OPT; CCT P10.770
lgnore income and expenses for business taxation purposes.

685
684
 Percentaye luzes
Percentage Tages
number
should be:
ion 118- Common Carrier's Tax on International Cariers
the preceding
taxes in C. P49,950
The total
business

The 3% percentage tax on intenational carier is imposed upon:

43. a. P10,770 d. nil 47. International air carrier International shipping
b. P39,180
doing businessin the Philippines doingbusiness in the Philippines
Yes Yes
P10,770 No
Answer: C to the
preceding
number)
. No
OPT (refer 31,,500 No
13,500) Yes
VAT: (P18,000+ 45,000 es
Camiage ofgoods 250,000 d. No
Cargo lruc P326,500
Sea vessel

Total
12% 39,180 Answer: A
X val ale P49,950 cariers to 0% on its flight oniginating
from
Total Business Taxes
Statement 1: Domestic common are subject
48,
land transportation veniCles
ility to the
whose accessibilitv riding abroad to the Philippines. VAT On its gross
pool of ontact which may international carriers are subject to the 0%
is a
of c o m m o n point of conta form Statement 2: Resident destination.
44. through the
use
by otharthe from the Philippines to a foreign
Philippine billings on flight originating
mobile applications or
facilitated
public is andlor cellular calls,
email,
Statement 1 Statement 2
of text, telephone
Domestic
common
carriers
a.
True True
a.
b. International carriers True False
services (TNVS) b.
network vehicle False
Transportation C. False
C.
d. Parthers d. False True

Answer: C Answer: C
GUIDE:
the lNVS, used in transporting passengers andor
vehicles, other than Domestic Common Cariers (local camiers)
45. The owner(s) ofthe refered herein as On their transport of passengers by land Sec.
117
=

shall be mails, by land 12% vat

goods in TNVS,
=

On their transport of goods or cargoes including and

Domestic common
carriers
from and to the Philippines of passengers, goods/cargoes,
a.
b. International carriers their
On mails domestic transport
by air or by sea = 12% vat.

network vehicle services (TNVS) to a foreign country

and shipments originating from the Philippines
Transportation On their international fights
= 0% vat
d. Partners abroad to the Philippines
=
exempt
and shipments onginating from
On theirinternational flights
from business tax.
Answer: D
International Cariers (Resident Foreign Carmiers)
network vehicle services, such as but not their intemational flights and shipments onginating
from
46. Statement 1: Under RMC 70-2015, transport On their transport of passengers on
limited to the likes of UBER, GRAB TAXI,
their Partners/suppliers and similar the Philippines to a foreign countyexempt from business tax
=

Convenience their intemational flights and shipments

current Cetificate of Public of goods/cargoes and mails on
arrangements, which are holders of a valid and On their transport to a foreign country
= Secton 118; Common Carmiers
tax on
carriers tax under originating from the Philippines
transport of passengers by land, shall be subject to 3% common
for the
Sec. 17.
Intemational Camiers.
from abroad to the Philippines =
exempt
their intemational flights and shipments originating
Statement2: network vehicle
Transport such as but not limited to the likes
services,
of On
from business tax.
which are no
UBER, GRAB TAXI, their Partners/suppliers and similar arrangements,
holders of a valid and current Certificate of Public Convenience for the transpo o Tax:
49. Determine the carrier that is subject to the Percentage
carrier
Resident foreign corporation operating as an intemational shipping
i
passengersstatement
by land, shall also be subject to 3% common carrierstaxunder Sec.
1 correct international air carrier
a. Only is b. Non-resident foreign corporation operating as an
b. Only statement 2 is correct
C. Domestic corporation with international flights
C. Both statements are correct d. Domestic corporation with international voyages
d. Both statements are incorrect

*Answer: A. ; Statement 2- shall be subject to 12% vat. Answer: A

687
686
 operaing
as
Percentae lLaapesgas
intemational
cariers nol ippines. t o
are
Percentaye Tuzes
foreign corporalilons
Nonresident lax Code
bbecause
e c a u s e they are
are not subject
not operating in the
fo 119- Franchise Tax
under Section
118 of the

Astic carriers
on their
intemauonal ignts

CCT.
not
and shipments
oñginaingin he PhitippiCCos
s orinin
in
Section
a Aright or privilege granted by the State to a person, individual or corporation, to operaie
oublic utility Such as rado broadcasting, television station, electric light system, telepnone
to 0% vat,
are subject
company, gas, and water utilities.
ar ers
carmers and
and international shipping carriers shal a. Franchise c. Dealers in securities
Intemational
common carrier's tax basec
Statement 1:
added tax
but to 3% d b. Common carriers d. Lending investors
TECeNIs
Philioninaangross
50.
12% value goods from to other cou
subject to of passengersand Answer: A
derived from
their transport
the Gross Pnlppines
Billings of 92.5% for
Tax of
Statement 2:
In cases when
Dased on reciprocity or treaty), nlernationa.
(i.e., tax exempr the COme
common
he
S4, Statement 1: Afranchise is a privilege to serve the public acquired by special grants from
cariers is not
applicable
NiRG, as amended,shall stil
apply. private organizations.
underSection118 ofthe D.
camier's tax A. B. C.
Statement 2: There are franchise holders whose gross receipts are subject to 12% vat
True False False even if not vat registered.
Statement 1 True
a. Both statements are corect.
Statement 2 True
False True False b. Both statements are incorrect
C. Only the first statement is comrect.
operalions shall be
cluded)
receipts from transport d. Only the second statement is correct.
Answer: C; (S1: Gross
interest income.
Answer: D
to the VAT on its
51. Statement 1: Banks are subject are subject to the 0% VAT on its
55. Which of the following franchise grantees is subject to the franchise tax?
n
intemational caiers
Statement 2: Resident
from the Pnilppines to a toreign destination Franchise on radio andlor television broadcasting companies the annual grOSs
Philippine bilings on fight originating receipts in the preceding year exceed P10,000,000.
Statement 1 Statement 2
True b. Franchise on gas and water utilities.
True C. Franchise on toll road operations.
True False
False d. PAGCOR and its licensees and franchisees.
C. False
d. False True
Answer: B
0Radio and/or television broadcasting whose gross receipts in the preceding year exceed

Answer: C P10,000,000 shall be subject to value added tax.

but not limited to
Although there are other franchises granted by the govemment such as
eleciric companies, cable companies and telecom companies, the term "Franchise Tax shall
does not impose business taxes to Philpine
52. The Republic of Korea, as an act of goodwil, amended.
carriers. Korean Air is operaüng in the Philippines having two flights a week. If you were pertaln only to franchise tax levied under Section 119 of the Tax Code, as

engaged by Korean air as its tax consultant and asked you whether it is liable to percentage 56. Statement 1: Radio and/or television broadcasting whose grossreceipts in the preceding
tax, which of the following will be your advice? value-added
a. Korean Air is liable to percentage tax based on gross receipts from year did not exceed P10,000,000 shll have an option to be registered as
passengers, goods, cargoes and mails.
taxpayer.
Statement 2: Once a radio and/or television broadcasting franchise grantees registered as
b. Korean Air is liable to percentage tax based on gross receipts from passenges value-added taxpayer, the registration shall not be revoked.
only. a. Both statements are correct.
C. Korean Air is liable to percentage tax based on gross receipts from goods, b. Both statements are incorrect.
cargoes and mails only. c. Only the first statement is correct
d. Korean air is not liable to percentlage based on the principle of reciprocity. d. Only the second statement is correct.

Answer:C Answer: A
n 118
Unlike in income taxation for Intemational cariers, reciprocity is not applicable lo
57. A franchisee, had the following data on revenues and receivables in 2020:
(common carrier's tax on intemational carriers) of the Tax Code.
Quarter ended, March 31, 2020 Revenues AR, beg AR, end
Covered by the franchise P4,000,000 P600,000 P800,000
Not covered by the franchise 1,200,000 160,000

689
688
 PercentageTalaxes Percentage Tages
electricity,
ling eled
and selling
the correct amount of Covered by the franchise
If the
franchisee
is generating
business Revenues
lax IS:
c . P580,800 Add: AR, beg
a. P200.800 d. P238.800 Less: AR, end
Collections P3.800 000
b. P456,000
x Franchise Tax Rate P114.000

Answer: G franchise: NotCovered by the franchise

Covered by the P4,000,000 Revenues P1 20000
Revenues 600,000 Add. AR, beg.
Add: AR, beg (800,000) Less. AR, end
Less: AR, end 160.000
CollectionsS P3,800,000 = Collections
P1.040 300
Covered by thefranchise
x Vat Rate
12% 124B00
Not P1,200,000 Total Business Tax P33 00
Revenues

Add: AR, beg

(160,000
60, Bulwagan ng Katotohan Broadcasting Compary, a non-vat hoider of a franchise to operate
Less AR, end

Collections P1,040,000 a radio andlor television network provided the following data (net of anyt
Total collections P4,840,000
x Vat Rate 12% Year GrossReceigts
Value Added Tax P580,800 2020 P9,000,000
to vat instead of franchise tax. 2021
Sale of electicity is subject 12.000,000
2022 10,000,000
and water utilities, the correct amount of business taxie
58. if the franchisee is a gas
a. P200,800
c. P580,800 The business tax liability should be
b. P456,000 d. P238,800 2020 2021 2022
P270,000 P360,000 P1,200,000
1,080,000 1,440,000 1,440.000
Answer: A
Covered by the tranchise. C. 270,000 360.000 300.000
Revenues P4,000,000 d. 1,080,000 360,000 360.000
Add. AR, beg. 600,0
Less. AR, end (800,000)
Collections P3,800,000 Answer: A
x Franchise Tax Rate 2% P76,00 2020= P9.000,000 x3% =P270,000
2021 P12Mx 3% = P360,000;

Not Covered by the franchise: Gross receips preceding year S P10M; apply 3% Francnise Tax
Revenues P1,200,000 02022= P10,000.000 x 12%= P1200.00
Gross receipts preceding year > P10M: subject to va
Add: AR, beg.
Less: AR, end (160,000)
Collections P1,040,000 61. Gallaxy Transport Corporation is a holder of franchise from the govemment to offer
x Vat Rate 12% 124 800 passenger and cargo transport operations by land. its gross receipts fom passenger
Total Business Tax P200.800 operations amounted to P10.000,000 while its gross receipts from cargo operations
those covered by the franchise is subject to the applicable franchse amounted to P2,000,000. How much is the franchise tax due for the month?
ne gross receipts from
tax rate, C. P1,440,000
regardless of the amount of the gross receipts. a. P300,000
he
for
gross receipts not covered by the franchise is subject to vat because the gross E b. P540,000 d PO
the taxable year will
obviously exceed the vat threshold.
59. f the franchisee is a radio television n
Answer: D
business tax is. broadcasting company, the correct a The gross receipts from passenger operations by land is subject to CCT under
a. P200,800 Secion 117, not Franchise Tax under Section 119 of the Tax Code.
b. P456,000 C. P580,800 The gross receipls from cargotransit operations is subject to vat, instead of
d. P238,800 Franchise Tax under Section 119 of the Tax Code.

Answer: DD

691
690
 paragraph,
Percentage lages
how m u i c h is the tolal
Purcentay. lares
the same
data in
the preceding
business lares 66. Cmart-Globe Telecommunications has the following data for a particular month:
62. Using month? c. P1,440,000 Gross receipts, domestic calls P5,000,000
due for
the
Gross receipts, overseas calls (originating in the 3,000,000
a. P300,00
d. PO Philippines)
Purchase of supplies used in connection with domestic
b. P540,000
calls net 300,000
of VAT
P300,000 Purchase of equip. used in connection with both domestic calls 800.000
Answer: B (CCT)
= P10M x 3%
Passenger
operabons

(Val)=
P2Mx 12% 240,000 and overseas calls, net of VAT
Cargo operations
Total Business axes
P540,000 Business expense 1,000,000
tax under Section 119 of . How much is the overseas communications tax collected from persons who used the
following is subject to percentage ax Code
63. Which ofthe communications facilities?
PAGCOR
a. P300,000 c. P800,000
b. Tollway operators
C. Telecomumication companies b. P500,000 d. nil
above
None of the
d. Answer: A
OCT P3,000.000 x 10% = P300.000
AnswerD
is subject to franchise tax
of five percent (5%) ofits gross revenieeo
PAGCOR
dllar pit operaions, regular bingo operations, and
inranngs rom 67. Usingthe same dala in the preceding number, how much is the vat payable?
its casino operations,
it, with agenis commission
on basis (RMC 33-20mobile a. P420,000 C. P504,000
bingo operations operaled by is diTerent rom tne ranchise tax imposed un
Aprl 17,
2013). This franchise tax, however, c. 119 b. P470,000 d. nil
of the Tax Code.
Telecommunication companies are subject to vat.
oTollway operators and
Answer: A
Output vat (P5M x 12%) P600.000
Section 120-Overseas Communications Tax Input vat:
services for domestic and overseas cals
64. A telephone company, VAT-registered, provides
Directly attrbutabie = P300,000 x 12%
6.000)
offered? Allocated= PB00,000 x 12% x 58 60,000)
What business taxes are due from the services
Value-added tax for domestic calls. Vat Payable P504000
I. Overseas communications tax for overseas calls.
C. Both I and ll 68. Which of the following statements is false?
a. lonly a. BBC, an intemational news agency, is required to pay 10% percentage tax from
b. ll only d. NeitherI nor ll
messages originating from the Philippines by telephone or telegraph.
b. Amounts paid for messages transmited by an embassy and consular offices ofa
Answer: C
GUIDE: foreign govermment is not subject to 10% overseas communications tax.
Localcommunications 12% vat C. Overseas communications initiated by a resident citizen not engaged in trade or
Overseas originating in the Phiipines = 10% OCT under Section 120 business is subject to overseas communication tax.
Overseas oniginating abroad = not subject to business tax d. None of the above

65. One of the following is subject to overseas communications tax

Answer: A
a. Long distance call by a son from Manila to his father in lloilo City. EXEMPT from OCT:
b. Monthly telephone bill from PLDT. Diplomatic Services
Intemational Organizations/ as provided under intematonal agreements/treaties
C.Telephone bll on a cal by a mother in the Philippines to her son in London.
News Agencies or Services
d. Telephone call
by Magda in Hongkong to her friend in Manila. Govemment

&Answer: C 69. One of the following statements is incorrect.

a and 'b', subject to vat a. Overseas communications tax is imposed on overseas communications originating
d ' not subject to business tax
from the Philippines.
b. The person liable to overseas communications tax may or may not be engaged in any
trade or business.

693
692
 Percentage layes
ercentade laxes
whether the rseas communica
communications taxIs
Imposed

or not. 121 and 122

-
Gross Receipts Tax
trade or
business
Section
overseas the owner of the
C.The
in the
course
of
tax is imposed o
communicati
icalion is subject to Other Percentage Taxes?
are
made communicalions
communications.
9 Which of the following
The
overseas

make
overseas
Banks
d. used to Financing/ credit Companies
facilities
I.
Il. Pawnshops
ofthe facility
Answer: D Duly registered Credit Cooperatives
user
on the
It is imposed IV.
wrong.
April 2021 C. 1, 1, Il and IV
month of a. land ll only
D"is

collections
forthe b. 1, ll and ll only d. None of the above
has the
following P1,120,000
Telecom Inc. abroad
70. Moon call originating Philippines
880,000
Overseas
in the 2,240,000 Answer: B
Overseas call originating
tax to be
remitted by Moon far i
month?
Local calls JJ at P1,000,000. Banko Natinis
carto
communications Natin sold a repossessed
73, Banko
overseas
the
How much is c. P200,000
Subject to value added tax
a. P220,000 .
b. P88,000
d. P80,000
. Subject to gross receipts tax of 7% tax
to regular corporate income
Subject
. c. Il and ll only
Answer:D P880,000 a. Ill only
d. None of the above
Collections 100/110 b. IandIIonly
P800,000
exclusive of OCT
Revenues
10% Answer: C
xOCT %
P80,000 treatment for
OCT VAT supplier. What is the
Bank purchased machineries from a
74. Maharlika are subject to percentage
of the sale transaction considering that banks
Joumal Eninc Dr VAT purposes
P880,000 Sec. 121 of the Tax Code?
Cash taxes under C. exempt from vat
80,000
OCT Expenses P880,000 a. 0% at
Revenues
d. percentage tax
80,000 b. 12% vat
OCT Payable

Stock Transaction Taxes under

Sections 127(A) and (B)of
NOTE: Percentage Taxes, except taxation purposes.
Answer: B financial institutions are not subject
to value added tax but to gross
expenses for Income Although banks and other
the Tax Code are classified as operating business tax in the Philippines. 121 of the Tax Code, it does not follow that sale
of vatable goods
abroad is not subject to under Section
overseas calls oniginating receipts tax to vat Consequenty, sale
vat. Sale of machinenies are subject
The
to them is no longer subject to
insttution is subject to vat
tax? of such items to a banking
71. Based on the preceding number, how much is the output
a. P240,000 C. P360,000 Tax?
b. P454,286 d. P268,800 75. Which of the following is subject to Gross Receipts
Pawnshops/money changers
. Credit cooperatives
Answer: A
Collections P2,240,000 II. Lendingactivities ofmulti-purposecOoperatives.
D.
100/11 B. .
Revenues exclusive of vat P2,000,000
Yes Yes Yes No
x OCT 12% Yes No No No
OCT P240,000
Yes No Yes No
JoumalEnt
Dr. CL.
Cash P2,240,000 Answer: B such as money changers and pawnshops, are subject
Revenues P2,000,000 Other non-bank financial intemediaries,
121 and 122, respectively, of the Tax Code. [Sec.
4.109-1
Output at 240,000 to percentage tax under Sectons
(B(w), RR 4-2007]
UnIike percentage taxes, vat on sale (output vat) is not classified as operalng * penses.
a tax credit against output vat.

695
694
 Percentuge lajes Percentaye lazes
4 800)
vaton its gross
GRT payment rom Jan. 1, 2016 to Dec 31, 2019
receipt from (P6,000,000 1 2% 14 years) 1%
purposes
tax to
líable
interest
business

pawnshop,
for investor
e oof unclaimed p
sale roperties. Adjusted GRT (P6M 1 2% 141 5%) 24.000
76. A
(streated as a
lending
selling
price
from
too 5% gross rece ipts tax under Adjustment (deficiency) P19200
gross but liable Add: GRT or January 2020
from gross Section
and from
income income and
lending
investor

lending inveoints interest income and

from int
from
s (P6Mx 2% /12months) x 5% 500
b. Is not
treated as a
on its
gross
receipts
gross seling Total Gross Receip!s Tax, Jan. 31, 2020 P19700
Tax Code
122 of the
properties.
unclaimed
of
from sale OPT
within 10 years. The
vat and
price
from 12% RO. December 1, 2015, Rianne borrowed P1,000.000 from BDO payable
Is exempt and OPT
of P100,000 payable every December 1 beginning December
C.
subject to
12% vat loan pays an annual interest
s loan by repaying the princpal
d.
RR 4-2007) 1,2016. On December 1, 2020, Riannne pre-terminated the
4 109-1 (B)w).
tax still due from BDO due to the pre-termination in 2020 1
Answer: B; Sec in full. The gross receipts
of January 2021: a. P5,000 c. P21,000
dala for the month d. P25,000
has the following the instrument is 5 b. P16,000
vearo
ars
77. Piggy Bank income, the remaining
matunty of
withholding tax)
P100,000
Interest
(gross of 5%
expanded 50,000 Answer: C
Rentals
Net trading loss collections of Piggy for Januanv 2021?
(10,000) GRTpayment from Dec. 1, 2016 to Dec. 1, 2019 (P400)
tax on the (P100,000 X4 years) 1
the gross receipts 20.000
How much is c. P7,800 Adjusted GRT (P400,000 x 5%)

a P5,000 d. P8,500 Adjustment (deficiency P15 000

Add: GRT or 2020 P100,000 x 5%
b. P3,500
Gross Receipts Tax Due, Dec. 1, 2020 P21.000
Answer: D P100,000 x 5% P5,000
loan =
of
Interest income
-from short tem
3,500 81. China Bank extended
loans to its debtors during the year, with real propertes the
7% to to pay the
Rental income-P50,000 x P8,500 debtors being used as collateral to secure the loans. When the debtors failed
Gross receipts tax the same
the bank foreciosed
unpaid principal and interest after several demand letters,
bank is subject to business tax as
information in the preceding
number, PIg9y Bank has the followinn and entered into contracts of lease with tenants. The
78. In addition to the
for the month of February 2021: follows:
information of the instrument is 6 years 100,000 12% vat
Interest income, the remaining maturity
50,000 7% gross receipts tax
Rentals (gross of 5% expanded withholding tax)
20,000 a. Ionly C. Both I and l
Net trading gain for February 2021? d. NeitherI nor lI
receipts tax on the collections of Piggy b. ll only
How much is the gross
a. P5,200
C. P9,200
b. P5,900 d. P9,900 Answer: B
Section 123- Premiums Tax on Life Insurance
Answer: A companies
Interest income- from long tem loan = P100,000 x 1% Pi,000 Section 124- Premiums Tax on Agents of Foreign Insurance
P50,000x 7% 3,500
Rental income
-

Net trading gain = (P20,000-10,000) x 7% 700 82. Statement 1: The tax on insurance premiums applies to every person, company
or
Gross receipls tax P5,200
corporation doing life insurance business of any sort the Philippines, except purely
in
Apply cumulative rule as to net trading gain
cOoperative companies and assOCiations.
business is subject to value-added
79. Pedro executed on January 1, 2016, a long term loan from PRTC Bank in the amounu Státement 2: A person engaged in non-life insurance
P6,000,000 payable within ten (10) years, with an annual interest of 2%. HOwever.u tax.
January 31, 2020, the loan was pre-terminated. Assuming PRTC Bank declared coreuy a. Both statements are correct.
the interest from b. Both statements are incorrect.
2016 to 2019 and the applicable gross receipts taxes were
much gross receipts tax should be
pa C. Only the first statement is correct.
paid for the year 2020?
a. P100
C. P19,700 d Only the second staterment is correct.
b. P24,500 d. P500
Answer: A
Answer: C

697
696
 premiums
Percentage lase
is 2% bacad UDOn the total Percentaye Taes
insurance

83
Natement 1: The
tax on lite
premmumis
are
money,
paid in money,
notes, credits,
notes
premiumets
sttte
Gross receipts from ts ingurarnce
Premium on life inurance (P2.prlii
nhether
such 100,0O0 1 2) P200
Gross receipts 99 agent of a ronesinent
companiesis 4% based
Oblected
urance
Premium on or-fe insurarce (P450ferign insurancs mpan
insurar
money. on agents
of foreign
upon the ta 1
Premium on property insurance (P1.00, O0 4%
Statement 2 The tax 4%)
Percentage Tar lor the ment
premums colected.

are
comect. Pr4200
statements

Both incorect.
a
. Both
statements
are
is
correct.
07 Pro-Life Insurance engaged in business. t also serves as an agent ot a marne
s

COniy
thefirst
statement
is
comect. nonresident foresgn insurance company. It has te frlowirg data fr the aurert morer
statement
Total premium colected as an agent of a
d Only the
second
foreigrn surance P2.000000
Company
Answer: A Total premiums collected from non-ife insurance n te Philippines 500000
Purchase of supplies for use in non-ife busiress in te 300.000
collected bylife insurance ocompany
lite insurance iS
Statement 1: Al
insurance premium Subject to 2 Philippines
84 How much is te tar for total premiums colected as an agent oi a foregn nsrance
gross reoeip! tax. ded within
refunded six (6)
within six (6) months is not
month:

SYatement 2 A lfe
insurance premium subjiect ths company?
2% percentage tax. a. P80,000 c.P40 000
are correct b. P100,000 d. P20.000
Both statements
statements are incorect
Both
statement is corect. Answer: A
Only the first statement is coTect.
Taxon Agents of Foreign Insurance Co P2000 0001 4%= PO0.00
Only the second
88. Using the same data in the preceding problem. how much is vat payabie?
&AnswerA
a. P24,000 c.P40.000
amended, provides that every fire b. P52,800 d. P20.000
the Tax Code, as
85. Section 124 of authonzed under the Insurance Code to
nr or
miscellaneouUs insurance agent
authorized to transact on rice
of insurance as he may
have previously been legally Answer: A
not authonized to transact business in the Philippines shall Output vat (P500,000 125 P60.000
in the Philippines for companies Less: Input vat (P300.000 x 12%)
36.000)
pay a tax equal to:
C. 5%
Vat payable 24 C00
. 2%
.4% d. 10% 89. Mabuhay Insurance Corporation fumished us its data shown below
Insurance Premiums collectble is R3,750,000
&AnswerB The breakdown of the above premiums is as
The tex rate, as provided in the Tax Code, is twice of Section 123.
Life Insurance Premiums
iollows
75%
Non-life insurance premiums 25%
86. A domestic insurance company gave the following information for the month: During the month, 70% of collectble life insurance premiuns and 50% of colectble
Gross receipts from its insurance policies non-life insurance premiums were collected.
Premium on lfe insurance P2,100,00
Premium on non-life insurance 1,500,000 The Premiums Tax payable is
Gross receipts as agent of a non-resident foreign insurance co a. P39,375 c. P94,437.50
Premium on non-life insurance P4,000,000 b. P78,750 d. P196,875
Premium on property insurance 1,000,000

The percentage tax due for the month is: Answer:InsuranceApremiums collectible PA75000
a. P355,000 C. P242,000 75%
b. P430,000 d. P605,000 70%
Total premiums collected on life insurance P1,968.750
X
Answer:C Premiums Tax Payable P39,375

698 699
 Percentaye Tayes
ercentase lates
the tolal busine
the total business laxes should be 18% on boxing exhibitions
preceding
number, C 10% on professional basketball games
data in
the c. P95,625 d.
same
the d. P120,000
90. Using a. P39,375 Answer: A
,250 cockpits, cabarets, night and day clubs shall be 18%
boxing exhibitions shall be 10%
P39,375
nunmber)
professional basketball games shail be 152%
Answer: G Tax Payable
(precOdng

S0% x 12% 56,250

25% x
Premiums

Vat (PS
750, 000
x
P95,625
tollowing Is an incorrect amusement tax rate:
month
Outout the
business
taxes for
aA One of the
olal
Part 30%
for his
Mansion
Forbes Park,
Mansion in Forbes Makati ftom a. Jai-alai and racelracks and 18%
insurance nce throuah ts Cockpits, cabarets, night day clubs
wantsto procure
fre coporation,
agent in the b.
91. Pedro a
non-resident
ums Toregn
in 2018
2018 amou
amounting to #500,000. How is the C.
Professional basketball games 15%
Company, in
Insurance
He paid
premiums
Boxing exhibitions
-

12%
Philippines,
G.I. Joe. transaction?

on the
tax payable c. P25,000
premiums
a. P10,000 d. P50,000 Answer: D
b. P20.000
subject to amusement tax on gross receipts
followingof Iswinning
97. One of theOwners racehorses.
Answer B Tax on Agents ofForeign
Insurance Co. a.
Premiums

4% = P20,000 b. Proprietors of karaoke KTV houses.

P500.000 x
.
Owners of winning cocks in the cockpits
Pedro directly obtained t he insuran d. Lessees of bowling alleys
information above,
but assuming
92. Using the
same
now mucn Is tne premiums tax pavableon ne
Insurance Company.,
policy from Gallaxy Answer: B 126
tax on winnings uinder Section
Owners of winning racehorses are subject percentage
transaction? c. P25,000 to
a. P10.000 of the Tax Code, not amusemem tax
d. P50,000 Owners of winning cocks in the cockpits are subject to income tax oniy
b. P20.000
Dis subject to vat
Answer: C P500,000 x 5%
= P25,000 Which one is
receipts for amusement tax shall include all the following except
0 Premiums Tax =
one.
98. Gross
Section 125-Amusement Taxes
it?
a. Income from television, radio and motion picture rights.
amusement b. Income from sale of tickets.
93. A tax on the right or privilege to enter places of C. Income from sale of food and refreshments within the amusement place.
a. value added tax C. amusement tax
d. Income from sale of food and refreshments outside the amusement place.
b. franchise tax d. income tax

Answer: C Answer: D
94. The operator of one of the following places is not subject to amusement tax.
99. Statement 1: Al boxing exhibitions held in the Philippines shall be subject to amusement
Cockpits tax.
b. Racetracks Statement 2: Admission charges to amusement places are required for the imposition of
C. Bowling alleys amusement tax.
d. KTV Karaoke joints a. Both statements are correct.
b. Both statements are incorrect.
Answer: C C. Only the first statement is correct
Bowling alleys are subject to vat, not amusement tax. d. Only the second statement is correct
95. One of the
following is a correct amusement tax rate: Answer: B
a. 30% on jai-alai and
b. 15% on
racetracks
cockpits, cabarets, night and day clubs

700 701
 Percentag4e Tares Percentafe Taxes
worid boxing npionship
championshir
bout in the (and/or music video) using a microphone and public address system, the propretoses s or
on, promoted a Filinir
Filipino
citizen,
prona Man
featuring Manny
Pacquiao, a
ipino champion,
nd Lnand
hilippine operalors or inese amusement places have pursued a new form of lounge and ciub entertai
100. Apol B.,
rec amoTh
cate receipts
a
to P30,000,000
00.The amusement lax Lucas
Bulacan Gate to P30 Most of tnese establshments provide facilities to allow patrons to sing with
Bocaue, sutficient revenue will be made selling food and drinks to customers. The "terms the expeand day h
Champions.
Arena in "Fight of P20,000,000 night auda
dubbed as coverage
was
and cabarets have become passe'. Amusement
Matthysse,
receipts
from
television

c. P5,000,000 due is places which offer the same pleasuraoie o

entertainment and function now include videoke bars, karaoke bars, karaoke televisions, a d
additional

a. P2,000,000 d. boxes and music lounges. As such, the proprietors, lessees, or operators of the aiore
estadismensaredeemed also subject to 18% amusement tax under Section 125 of the Tax Code
b. P3,000,000 and not to the 12% value added tax.

Answer: D 104, Based on the preceding number, if it is a racetrack, how much is the amusement tax
be held in Malaysia,
how much is the t tax? payable for the month?
above will C. P5,000,000
101.Assuming
the bout
a. P2,000,000 d. nil How much is the amusement tax for the month?
b. P3,000,000 a. P60,000 C. P432,000
b. P360,000 d. P480,000
Answer: D
ol B., is aa foreinr
Apol foreign Answer: C
the bout is in
the Philippines
but the promoter,
national, Collections during the month:
102. Assuming a m u s e m e n t tax? From services rendered in January
much is the c. P5,000,000 200,000
From services rendered in February 1,200,000
a. P2,000,000
d. nil From services to be performed in March 40,000
b. P3,000,000 Total collections 1,440.000
10% P5M 30%
+ P2OM) x
=

C; (Amusement Tax= (P3OM Amusement Tax

Answer: P432,000
had the following
data during the month of March 2021:
103. Zirkoh, a comedy bar,
the month P160,000 Usethe folowing data for the next three (3)questions:
Net income during Casa Palawan, vat registered, offers different services to its guests. The following data taken
month:
Collections during the
200,000 from the books of the taxpayer are for the first quarter of 2021:
From services rendered in January Revenues Collections Inputvat
From services rendered in February
1,200,000
40,000
Hotel rooms P2,000,000 P1,500,000
in March
From services to be performed Dining Hall:
Sale of food and refreshments 1,000,000 850,000
the month?
How much is the amusement tax for Sale of wine, beer and liquor 700,000 650,000
a. P216,000 c. P259,200
Disco:
b. P252,000 d. P288,000 Sale of food and refreshments 600,000 550,000
Sale of wine, beer and liquor 500,000 450,000
Answer:Collections
C during the month:
200,000
105. How much is the amusement tax for the quarter?
From services rendered in January
From services rendered in February 1,200,000 a. P180,000 c. P540,000
From services to be performed in March 40.000 b. P360,000 d. P438,000
Total collections 1,440,000
18%
Amusement 1ax P259,200 Answer: A
Gross receipts from disco operations P1,000,000
For business tax purposes, ignore income and expensesS.
If it pertains to sale of services, the basis of business tax is gross recelpts or colecion's,
X amusement tax rate 18%
regardless of when the service was rendered.
Output vat P180,000
A comedy bar, for business taxation
purposes, is subject to amusementtax: 106. How much is output vat for the quarter?
Nght and Day Clubs" as provided in RMC 18-2010 are drinking, dancing and entertainment ven a. P180,000 C. P540,000
ae
ncn oenumes serve food and provide entertainment. "Cabarets", on the other hanu e
by b. P360,000 d. P438,000
restauranis or clubs where liquor and food are served, with a stage provided for peno Ices
muslcians, dancers or comedians, including a venue for dancing by patrons lar edmilar
musicto

that of nightclubs. With the advent of modem interactive

entertainment, along wiu

703
702
 Percentaye lapes Percenaye Taes
aie
Answer: B P1,500,000
exhibitions shall be exempt from arnusernent tax when the following oondiions
110. Boxing exhibitio
ving
G a s s r e c e p i s from:

1,500,000 sent:
Hotelrooms
(P85Ok
+ 650ok)
P3,000,000 nvolves World or Oriental
championships in any division.
hall
Dining
recepis
suojeci
to vat
12% O n e of the contenders is a citizen of the Philippines.
association at least
otalgross
Vat rafe P360,000 Promoted by Ciizens of the Philippines or by a, corporation or

Ouput vat
60% of the capital is owned by Filipino citizens.

taxes for the

quarter? d. All of the conditions above must be satisfied
business

is the total C. P540,000

107. How much
P180,000 d. P400,000
Answer: D
b. P360,000
on Winnings
Section 126-Tax
Answer: C P180,000
in:
Amusement ax
360,000 11, The Percentage lax on Winnings is imposed on the winnings of bettors
Output val
Total business taxes
P540,000 Cockfighting
Horse race
professional
baskethai
Association (PBA), a
and held all
cdgue in th Jai- lai
Basketball of 2021
108. Philippine coliseum during April orOuidnes for tha boxing
its own e art facility in
in Bulacan. PBA provided the followin
Philippines, opened of the at tacity Answer: B
in the newly built, state
month
data during the
month:
P9,800,000 shall always be subject to 10% percentage tax, except?
Entrance Fee 112. The following
Receipts from operations: Overseas call made by Mr. X, resident of Manila, to his mother Libya
in
from Restaurant a.
Gross Receipts 2,200,000 races by a bettor
Sale of food and
beverages b. Winnings from horse and Mexican
Sale of wines &liquor
750,000 C. Oriental Championship match in the Philippines between a Filipino
3,800,000 promoted by Bob Arum.
Expenses
d. Winnings from horse races by a horse
owner.

amusement tax for the month? Answer:A bettorBof horse races may be subject to 10% or 4% tax based on net winnings.
How much is the
C. P1,762,000
a. P1,210,000 Basis: Net Gross winnings or dividends less cost of the winning tcke{s)
d. P1,912,500 winnings =

b. P1,320,000 % of Ta
Ordinary winnings: 10%
Answer: D Special winnings (forecast, double, trfecta, quinela): 4%
Gross recelpts from entrance fee
P9,800,000 Horse owner(s) are subject to 10% tax based on gross winnings.
Sale of food and beverageS 2,200,000
750,000 actual amount paid to the winner.
113. Statement 1: The 10% tax on winnings is based on
Sale of wines and liquors
12,750,000 and trifecta
Statement 2: The rate of tax on winnings in case of double, forecast/quinella
Total gross receipts
15%
Amusement Tax P1,912,500 shall be four percent (4%).
a. Both statements are correct.
109. Based on the preceding number but suppose the restaurant is owned and operated by b. Both statements areincorrect
Bryan, a vat-registered person, the amusement taxes of Bryan and the PBA is C Only the first statement is correct.
PBA d. Only the second statement is correct
Bryan
a. P354,000 P1,320,000 Answer: D
D.
P1,320,000 P354,000 current month.
P354,000 P354,000 114. Mang Jose, horse-owner, received gross winnings of P120,000 during the
a
PO P1,470,000 His tax on winnings should be:
a. P6,000 C. P18,000
Answer: D b. P12,000 d. P24,000
PBA: Gross receipts, PBA P9.8M x
= 15% OPT P1,470,000 *Answer: B; (Tax on winnings = P120,000 x 10% = P12,000)
Bryan: GrosS receipts, restaurant = P2,950,000 x 12% vat 354,000
Bryan is subject to vat, not to amusement tax.

705
704
 Percentaye lates Percentate Taes
P6,000. Fifty perce
to P6, 50%lnt 10% OPT on winnings) under Section 126 of the Tax Code and
horse racing
tickets
amounting

pnze of
P60,000. How
m ve bickels 1I. Subject to (tax
20% final tax on passive income
him a
115. Leo purchased
won
double,
entiting
a. Ionly C. Il only
purchased
operator? c. P54,300 b. Il only d. and lI
Leo by the
a . P57,720 d. P51,300

b. P64,720 Answer:A
Answer: A P60.000
track bettor won the following bets:
ross winnngs

Less: Tax
on winnings P60,000 119. A race On double, a bet of P200 and dividend of P200 per P20 ticket.
Grass winnings tickets (P6,000 x 50%) (3,000) P50 ticket
Cast
ofwinning P57,000 On winner take all, a bet of P500 and a dividend of P1,000 per
Net winnings 4% On forecast, a bet of P1,000 and dividend of P100 per P20 ticket
4280)
ount to be paid to
Pedro
7,720 The total percentage tax due from the winnings is:
deducted from the t to be
amount

winning shall not be

tickets paid to Pedr a. P682 c. P1,280
The cost of the receipt of dividends or winnings are separate transachions.
dividend
of ticket and d. P1,530
because the purchase b. P1,182
records of his horse races forthe mo
horse bettor,
had the following Answer: B
a
116. Pedro, ONP200
DOUBLE
Gross Cost of
2020: Type of betP20 per bet = 10 tickets

Winnings Winnings Winning tickets icket =P200-20

Net winnings10pertickets
P180
x 4% P72 =

Horse OPT P180 x

P100,000 P40,000 ON Winner Take All (Ordinary winnings)

Trifecta
Ana Khan
Ordinary 250,000 50,000 P500 bet/P50 per bet 10 tickets
=

P1,000-50 =P950
Lor Naden
325,000 75,000 = Net winnings per icket
=

Fe Licidad
Double OPT= P950 x 10 tickets x 10%
= P950

business tax on winnings? ON FORECAST

How much is the C. P49,000 P1,000 beUP20 perbet 50
tickets
=

P100-20 P80 =

2,400 d. P68,000
Net winnings per ticket
=

4% = P160
P35,750 OPT P80 x 50 tickets x
0.
TOTAL Tax on Winnings
Answer: A Type of
= P72+P950+160 P1,182
Netwinnings Tax
Horse Winnings P60,000 4% P2,400
Ana Khan Trifecta 10% 20,000 TRANSACTION TA
200,000
Ordinary SECTION 127-STOCK
Lor Naden
Double
250,000 4% 10,000
Fe Licidad P32,400
TOTAL
four (4 questions arebased onthe followinq data
authorized capital stock
of 20,000,000
The nextCorporation, a closely-held
corporation, has an
authorized shares,
5,000,000 thereof
Determine his tax liability. Galaxy 20,000,000
from cockfighting. P5.00/share. Of the
117. Mike Ong received P100,000 winnings Section 126 of the Tax Code shares with par value of shareholders:
under by the following
Subject to 10% OPT (tax winnings) paid up
on
Were subscribed and fully
I. Subject to income tax 1,000,000
Tax Code and Pedro
under Section 126 ofthe 1,000,000
Subject to 10% OPT (tax winnings)
on Ana
1,000,000
20% final tax on passive income Lorna 1,000,000
a. Ionly C. ll only Fe 1.000,000
b. ll only d. land IlI Juan 5,000,000
Total Shares Outstanding
Answer: B
118. Mannu Gal received P100,000 winnings from horseracing. Determine his tax
lax
Section 126 of the u
UDject to 10% OPT (tax on winnings) under
I. Subject to basic income tax
707

706
 ercentaye lages
Percentaje lages Answer: B
conduct an initial blic offering (PO) an after IP01s known a5
follow-on-follow-througn
sa
un
decided
to
investing public for
inves
sharesofbythea shareholder
Sectionof127A)
SALE Tax Code, as amended, subject to Percentage Tax as 19o
Gallaxy to the
d to sell her During
2020, shares
decidoShare

Pric
Gross Selling
nas likewise
$ale prior lo 2018: % of 1% of
February unissued

On of its LOrna,
Selling Priog
offers
5,000,000
sharenolders, enlire S a l e on or after Jan. 1, 2018: 6/10 of 1% of Gross
initially one of its existing P 7 . 5 0 / s h a r e .

OPT= 1,000,000shares x P10 x.006

period, for
public
to the offering? 11494
repealed under RA
shares
the primary not
NOTE: The 6/10 of 1% stock transaction tax was
1.000,000
on
tax due
percentage P750,000
the
much is
120. How P375,000 d. nil UIDE SHARES OFSTOCKAPPLICABLE TAX
OFTERM
OF APPLICABLETAXESIN THEISSUANCEORSALE
.

0.
P1,500,000
MARY USED VAT.
Not subject to
OPT 3
ssuance of shares before IPO to DST
income tax but subjecG
Answer: A of the
tax due of
entage lax the issui
issuing corporalion durin
Solution.
prmary offenng
relers 1o p e r c e n l a g e during ts STT: 4%, 2%, 1%
0 T a x on ISSUING Issuance of shares during IPO Primary Offering Repealed under Bayanihan
offering (iP0).
initial public
CORPORATION

shares añer IPO

and
shares issued @IPO
over ouistarnding

Follow on fllow Not subject to VAT, OFT

DST
=
Issuance of shares after IPO
incometaxbut subed to
RATI0

-5/10-500
17% PT.5 X 1% =
P375,000
through
5M Shares x
IPO Rate a
% =
Proceeds x Tax Capital gains tax
OPT on 1PO= on IPO Is no longer
Sale of shares before IP0; OR TRAIN Law= 15%
Tax
11494 (Sept. 15, 2020), Sale of shares of unlisted DC
Upon effectivityofRA
SHAREHOLDER
NOTE:

secondary offering (by Lorma? STT: 4%, 2%, 1%

is the percentage tax due on the Sale of shares during IPO Primary Offering Repealed underBayanihan
121. How much c. P150,000
a. P75,000
d. nil Follow on follow TRAJN Law
b. P300,000 Sale of shares after IPO; or
STTof 6/10 of1% of GSP
Sale ofshares Listed in the LSE througn
Answer: B ofening" refers to percentage tax due of the shareholder who sold hicher
"secondary
is undergoing iniial public ofering (IPO).
Tax on

share at the time the corporalion shall be subject to:

RATIO = shares issued @
IPO over oulstanding
shares afer IPO
124. Issuance of shares by a closely held issuing corporation value in money.
price or gross
=1/10=10% a. Percentage tax- 6/10 of 1% based on gross selling
tax of 15% on capital gain
IPO Rale =4%
P300,000 b. Capital gains gross value in
1M shares x P7.5 x 4% 4%, 2%, 1% based on gross selling price
=

Proceeds x Tax %= or
OPT on IPO =

C. Percentage on lPO -

11494 (Sept. 15, 2020), Tax on IPO is no longer imposed. money.

Upon effectivity of RA
NOTE:
d. No business tax but subject to documentary stamp tax (DST)
another
decides to increase capitalization by offering
122. If in May 2020, Gallaxy again
6,000,000 of unissued shares to the public at P10.00/share,
how much is the percentag Answer: D
axdue? of shares by the issuing
P600,000 C. P2,400,000 125. Prior to the effectivity of Bayanihan II Act, primary offering
shall be subject to:
. P1,200,000 d. corporation (issuance during initial public offering) or gross value in money.
a. Percentage tax 6/10 of 1% based on gross selling price
-

b. Capital gains tax of 15% on capital gain.

Answer: D on gross seling pice or gross value in
V SSuanceOf shares by the issuing corporation after IPO is known as "Tollow-on-10o Iu C. Percentage on IP0 4%, 2%, 1% based
-

issuance. The issuing corporation is subject only to one (1) type of Percemtage i money.
rercenlage l x on PO under Section 127(8) of the Tax Code, as amendea d. No business tax but subject to documentary stamp tax (DST)
h e issuing corporalion is nof subject to Percentage Tax before and ater IPo. Hova
lia0e to
documentary stamp tax (DST) on the issuance of stock certificale lo shareno
123. If in August 2020, Juan decides to sell his entire stock ownership to e Poublic al
Answer: C
P10.00/share, how much is the
percentage tax due?
a.
P50,000 C. P400,000
. P60,000 . nil

709
708
 Percentage laj Percentage lares
sold the
issuing corporation (sSuance and that Trillanes
corp0rain

the issuing
Mthe shares were not listed in the local stock exchange
the sha
shares by after Assuming
issuance
of
1PO 131.
1hares to Cayatano, the percentage tax on the sale is:
orar
through
Folow on
follow
gross selling price or
price gross value in money. a. P15,000 C. P30,000
126. subject
to:
of 1%
based
on
shall be tax-6/10 b. P25,000 d. PO
gains.
a
Percentage
tax of 15%
on capital
on ling price
gross selling Or
gross value in
Capital gains 2%, 1% based
b. IPO-4%,
Answer: D; (Subject to CGT, notpercentage tax)
on
stamp tax (DST)
C.Percentage
documentary
money. subject to
business tax but of the following statements is incorrect. shaH De
No 132. One who made the sale and
d.
a. The 6/10 of 1% tax shall be collected by the broker
Answer: D remitted within 5 banking days from the date of collection and initial pubic offenng
to a buyer shall ho subjed The tax paid on sale of shares through local
stock exchange
when sold directly b. tax purposes
investment
gross or vali allowable deduction or income
held as
127. Shares stock tax -6/10 of 1%
of based on gross
seling price
money (IPO) and secondary ofering shall not be income.
6/10 of 1% stock transaction tax is a final withholding tax on
Percentage on gross
income.
C. The or a loss
a. 10% based whether there is an income
Value-added tax The 6/10 of 1% stock transaction tax is collected
-

b.
tax- 15% capitalgain of
on gross selling price or
or
d.
tax.
C.Capital gains 17% based
.

gross value in and is a percentage

on IPO
4%, 27%, -

d. Percentage
money. Answer: C
local stock exchange
Answer C Sale by a stock dealer of shares of stocks through the
133. Statement:
1s tax.
Bayanihan Act Il,
secondary offering of stael held a is subject to the stock transactions
is subject to
effecivity of the dealer of shares of stocks directly to a buyer
128. Prior to the IPO period shall be subject to: 2nd Statement: Sale by a stock
investment when
sold during tax
seming9 price or gross value in ney. the capital gains
of 1% based on gross
Percentage tax-6/10 income. a. Both statements are correct.
on
10% based gross
Value-added tax
Both statements are incorrect.
-

b. b.
gains tax of 15% on capital gain.
C. Capital
on IPO 4%, 27o, 1/% based
-
on gross selling price or gross alu in
C. Only the first statement is correct.
Percentage d. Only the second state statement is corect.
money.
basic income tax and vat.
Answer: B. ; Sale of shares by a stock dealer is subject to
Answer:D
stock transaction tax. Which one is
investment when sold through the local stock exchange shall be 134. All of the following except one are liable to 6/10 of 1%
129. Shares of stock held as
not?
Subject 0 or value in money. Individual taxpayers, whether citizens or alien
Percentage tax-6/10 of 1% based on gross selling price gross
a.
a. b. Corporate taxpayers, whether domestic or foreign
b. Value-added tax -

10% based on gross income.

C. Capital gains tax of 15% on capital gain. C. Estates and Trust
selling price or gross value in d. Dealers in securities
Percentage on IPO 4%, 2%, 1% based -
on gross
money. Answer: D. ; Dealers in secunties are subject to value added tax.

Answer of P100 per share, to Mr.

135. Gallaxy Corporation issued 10,000 shares, with par value
transaction did not pass through the
130. In 2019, Trillanes invested P5,500,000 in the shares of stock of Du30 Corporation. Ihe Apolinario Bobadilla for P150 per share. The
tax on the sale?
Corporation's shares are listed and are traded in the local stock exchange. Iilanes Philippine Stock Exchange. How much is the capital gains
in 2020 for P5,000,000 through the local stock exchange. a. P45,000 C. P50,000
Subsequently
The
soldtaxtheon shares b. P25,000 d. zero
percentage the sale is:
a. P15,000 c. P30,000
b. P25,000 d. P50,000 Answer: D not issuer
Answer: C; (Stock Transaction 0 CGT is applicable only if the seller is a shareholder or investor,
Tax= P5M x.006 P30,000) DST
T h e transaction is not subject to any business tax except

710 711
136. Using the data in the preceding number, now much is the
the percenta
Percentage laxe
Mr. Bobadilla subsequently sold his shares for P200 per share?
a. P45,000 C. P10,000
percentage tax assuming
b. P25,000 d. zero
Answer: D
The sale wil be subjected to capital gains tax
(an income tax) but not
tax subject 1
enlae
137. Statement 1: The buyer of shares under
primary offering shall be
payment of stock transaction tax to be withheld and remitted the the one lahik t
Statement 2: The seller shall be the one liable for the stock by stock broker
under secondary offering offering. transaction tax of shareS s
t
A. B C. D.
Statement 1 True True False False
Statement 2 True False True False
Answer: C
138. Statement 1:
Upon the
6/10 of 1% is within five effectivity of the TRAIN Law, payment of stock
transaction tax
Statement 2: Prior to (5) banking days from the date withheld by the
Sept. 2020, payment of stock broker.
on
primary offering should be15,within transaction of 4o, 0di
tax
stock exchange. thirty (30) days from the date of
a. Both statements lIsung
b. Both are correct.
statements are
C. incorrect
Only the first statement
d.
Only the second state is correct.
statement is correct.
Answer: A