UNIVERSITY OF THE PHILIPPINES

COLLEGE OF LAW
BAR OPERATIONS COMMISSION
Room 321 Malcolm Hall, Diliman, Quezon City 1101 Philippines
Telefax o! "20#$$1% loc# 31$ & Mo'ile o! 0"1(#")23"01
TAXATION
Time: 60 mins.
1# *ne of these is t+ue!
a# ,ai-e+ of p+esc+ipti-e pe+io. to last until the completion of in-esti/ation is -ali.#
'# ,ai-e+ is a taxpaye+0s concession to the state, thus, it must 'e const+ue. st+ictly
a/ainst the state
c# ,ai-e+ 'ein/ unilate+al, the state nee. not exp+ess its acceptance, an. 1hen
accepte., the taxpaye+ nee. not 'e noti2e.#
.# ,ai-e+ 'ein/ unilate+al, acceptance 'y the state nee. not o'se+-e the le-el of
autho+ity of the o3cials empo1e+e. to accept#
2# *ne of these has no time limit 1ithin 1hich to assess!
a# 4ncome tax
'# T+ansfe+ taxes 5.ono+ o+ estate6
c# 7alue 8..e. Tax
.# P+i-ile/e tax
3# *ne of these is not a type of local tax an. othe+ impositions 9
a# Municipal taxes on 'usiness : occupations
'# Municipal fees : se+-ice cha+/es
c# Real p+ope+ty taxes
.# Taxes on /+oss +eceipts of t+anspo+tation 'usinesses
%# ;o+ casual sale of +eal p+ope+ty, you .o not pay 9
a# Capital /ains tax
'# Documenta+y stamp tax
c# <ocal t+ansfe+ tax
.# 4ncome tax
$# =pecial classes of +eal p+ope+ty .o not inclu.e 9
a# <ocal 1ate+ .ist+ict
'# Pu'lic po1e+ 9 /ene+atin/ company
c# Hospitals
.# =chools
># ,hich is not a le-y on +eal p+ope+ty 9
a# =pecial e.ucation fun.
'# 8. -alo+em tax on i.le lan.
c# =pecial assessment
.# T+ansfe+ tax on sale o+ t+ansfe+
(# The manufactu+e of casino +u''in/ alcohol is su'?ect to!
UNIVERSITY OF THE PHILIPPINES
COLLEGE OF LAW
BAR OPERATIONS COMMISSION
Room 321 Malcolm Hall, Diliman, Quezon City 1101 Philippines
Telefax o! "20#$$1% loc# 31$ & Mo'ile o! 0"1(#")23"01
a# 78T
'# pe+centa/e tax
c# speci2c tax
.# a.-alo+em tax
)# 8 tax impose. at e-e+y sta/e of .ist+i'ution p+ocess on the sale, 'a+te+ o+ exchan/e
of /oo.s an. se+-ices an. t+ansactions .eeme. sale, as 1ell as impo+tation of /oo.s an.
se+-ices#
a# p+i-ile/e tax
'# pe+centa/e tax
c# 78T
.# excise tax
"# Ma+io .ispute. a .e2ciency tax assessment an. upon +eceipt of an a.-e+se .ecision
'y the Commissione+ of 4nte+nal Re-enue, 2le. an appeal 1ith the Cou+t of Tax 8ppeals#
,hile the appeal is pen.in/, the @4R se+-e. a 1a++ant of le-y on the +eal p+ope+ties of
Ma+io to enfo+ce the collection of the .ispute. tax# A+antin/ a+/uen.o that the @4R can
le/ally le-y on the p+ope+ties, 1hat coul. Ma+io .o to stop the p+ocessB
a# 8ppeal the @4R0s action to the Cou+t of 8ppeals
'# Dispute @4R0s le-y on the p+ope+ties 'efo+e the Cou+t of Tax 8ppeals
c# ;ile a motion fo+ in?unction 1ith the Cou+t of Tax 8ppeals on the /+oun. that such
collection 1ill ?eopa+.ize the inte+est of the taxpaye+ o+ the /o-e+nment#
.# =ecu+e a tempo+a+y +est+ainin/ o+.e+ 'efo+e the =up+eme Cou+t#
10# 8..itional exemption fo+ each .epen.ent chil. pe+ R8 "$0%
a# P 10,000
'# P ",000
c# P ),000
.# P 2$,000
11# 4ncome tax is not a
a# pe+sonal tax
'# national tax
c# excise tax
.# .i+ect tax
12# Cn.e+ R8)%2%, the allo1a'le .e.uction fo+ me.ical expenses of a +esi.ent .ece.ent
shall not excee. !
a# P $0,000
'# P $$0,000
c# P $,000
.# P $00,000
13# Pe+ R8 "$0%, ho1 much is the total pe+sonal an. a..itional exemption of M+s# 8, 1ho
'ecame a 1i.o1 .u+in/ the taxa'le yea+ an. suppo+tin/ he+ mothe+ an. one mentally
+eta+.e. ille/itimate 2$ yea+Dol. chil.B
a# P ($, 000
UNIVERSITY OF THE PHILIPPINES
COLLEGE OF LAW
BAR OPERATIONS COMMISSION
Room 321 Malcolm Hall, Diliman, Quezon City 1101 Philippines
Telefax o! "20#$$1% loc# 31$ & Mo'ile o! 0"1(#")23"01
'# P %0, 000
c# P 100, 000
.# P %), 000
1%# The follo1in/ is not a taxa'le income of a +esi.ent ;ilipino citizen!
a# income f+om an ille/al 'usiness
'# income f+om a 'usiness a'+oa.
c# income f+om casino
.# 1innin/s f+om lotto
1$# ,hich of the follo1in/ a+e exclu.e. f+om the /+oss estateB
a# p+ocee.s of life insu+ance policy paya'le to an i++e-oca'le 'ene2cia+y
'# +e-oca'le t+ansfe+s
c# t+ansfe+ in contemplation of .eath
.# claims a/ainst insol-ent pe+sons
1># @asically, po1e+ of taxation is exe+cise. 'y
a# the P+esi.ent
'# the Con/+ess
c# Eu.icia+y
.# @4R
1(# The stan.a+. .e.uction of P 1,000,000 f+om the /+oss estate is!
a# optional
'# in a..ition to the itemize. .e.uctions
c# not a-aila'le to +esi.ent .ece.ents
.# in lieu of all itemize. .e.uctions
1)# The follo1in/ a+e the +eFuisites fo+ income to 'e taxa'le, except!
a# The+e must 'e /ain o+ p+o2t
'# The /ain must 'e +ecei-e. o+ +ealize.
c# The /ain must not 'e exclu.e. 'y la1 o+ t+eaty f+om taxation
.# The income must excee. the pe+sonal an. a..itional exemptions of the taxpaye+
1"# ,ho amon/ the follo1in/ a+e *T +eFui+e. to 2le an income tax +etu+nB
a# ;ilipino citizen 1ith 'usiness income f+om the Philippines#
'# Resi.ent alien on income .e+i-e. 1ithin the Philippines#
c# onD+esi.ent alien en/a/e. in t+a.e o+ 'usiness
.# 8n in.i-i.ual 1hose sole income has 'een su'?ecte. to 2nal 1ithhol.in/ tax#
20# Cn.e+ R8 "33(, a p+esumpti-e input tax c+e.it is allo1e. to
p+ocesso+sGmanufactu+e+s of milH, sa+.ines, macHe+el, +e2ne. su/a+, cooHin/ oil, an.
pacHe. noo.leD'ase. instant meals at the +ate of!
a# 1#$I
UNIVERSITY OF THE PHILIPPINES
COLLEGE OF LAW
BAR OPERATIONS COMMISSION
Room 321 Malcolm Hall, Diliman, Quezon City 1101 Philippines
Telefax o! "20#$$1% loc# 31$ & Mo'ile o! 0"1(#")23"01
'# %I
c# 2I
.# )I
21# The follo1in/ a+e Fuali2e. .epen.ents of a hea. of the family, except!
a# Jithe+ o+ 'oth pa+ents
'# @+othe+G=iste+ of 1hole o+ halfD'loo.
c# =enio+ citizen
.# A+an.chil.+en
22# ,hich of the follo1in/ is .e.ucti'le fo+ income tax pu+poses!
a# Jmploye+0s cont+i'ution to pension t+ust
'# Pe+sonal, family, li-in/ expenses
c# ,a/e+in/ losses
.# KicH'acHs
23# ;o+ tax pu+poses, income is synonymous to!
a# Capital
'# Receipts
c# Realize. p+o2t
.# 8ccumulate. P+o2t
2%# The follo1in/ can a-ail of the 4nput Tax C+e.it, except!
a# 4mpo+te+ of /oo.sGa+ticles p+e-iously su'?ecte. to 78T
'# Pu+chase+ of .omestic /oo.s upon consummation of the sale
c# Jxpo+te+ of /oo.s an. se+-ices not +e/iste+e. un.e+ the 78T system
.# Pu+chase+ of se+-ices, lessee o+ licensee upon payment of compensation, +ental,
+oyalty o+ fee
2$# J.ucational se+-ices +en.e+e. 'y p+i-ate e.ucational institutions a+e exempt f+om
78T if .uly acc+e.ite. 'y the follo1in/, except!
a# =ecu+ities an. Jxchan/e Commission
'# Commission on Hi/he+ J.ucation
c# Depa+tment of J.ucation, Cultu+e an. =po+ts
.# Technical J.ucation an. =Hills De-elopment 8utho+ity
2># ;o+ 78T pu+poses in connection 1ith .efe++e. payment sale of +eal p+ope+ty, the te+m
Linitial paymentsM shall inclu.e!
a# Payments ma.e in the yea+ of sale in a..ition to the .o1n payment
'# Mo+t/a/e on the +eal p+ope+ty sol. not excee.in/ the cost the+eof
c# J-i.ence of in.e'te.ness issue. 'y the pu+chase+ to the selle+ at the time of sale
.# Do1n payment only ma.e at the time of sale#
2(# 4n ou+ ?u+is.iction, 1hich of the follo1in/ statements may 'e e++oneous!
a# Taxes a+e pecunia+y in natu+e#
'# Taxes a+e enfo+ce. cha+/es an. cont+i'utions#
UNIVERSITY OF THE PHILIPPINES
COLLEGE OF LAW
BAR OPERATIONS COMMISSION
Room 321 Malcolm Hall, Diliman, Quezon City 1101 Philippines
Telefax o! "20#$$1% loc# 31$ & Mo'ile o! 0"1(#")23"01
c# Taxes a+e impose. on pe+sons an. p+ope+ty 1ithin the te++ito+ial ?u+is.iction of a
=tate#
.# Taxes a+e le-ie. 'y the executi-e '+anch of the /o-e+nment#
2)# Citin/ =ection 10, 8+ticle 7444 of the 1")( Constitution 1hich p+o-i.es that sala+ies of
?u./es shall 'e 2xe. 'y la1 an. that .u+in/ thei+ continuance in o3ce thei+ sala+y shall
not 'e .ec+ease., a ?u./e of a Re/ional T+ial Cou+t Fuestione. the .e.uction of
1ithhol.in/ taxes f+om his sala+y since it +esults into a net .e.uction of his pay#
4s the contention of the ?u./e co++ectB
a# o# The contention is inco++ect 'ecause taxes a+e enfo+ce. cont+i'utions#
'# o# The contention is inco++ect 'ecause taxes must 'e collecte. in o+.e+ to suppo+t
the /o-e+nment#
c# o# The contention is not co++ect 'ecause .e.uction of 1ithhol.in/ taxes is not a
.imunition contemplate. 'y the fun.amental la1#
.# o# The contention is inco++ect 'ecause .e.uction of 1ithhol.in/ taxes is +eFui+e. 'y
la1#
2"# ,hat is the minimum comp+omise +ate in cases of .ou'tful -ali.ity of assessmentB
a# %0I of the 'asic assesse. tax
'# 10I of the 'asic assesse. tax
c# o limitation
.# P1,000,000
30# ,hich of the follo1in/ 78T t+ansactions a+e not consi.e+e. ze+oD+ate.B
a# Jxpo+t sales of /oo.s
'# Domestic sale of /oo.s in the +e/ula+ cou+se of t+a.e o+ 'usiness
c# ;o+ei/n cu++ency .enominate. sale
.# =ale of /ol. to @an/Ho =ent+al n/ Pilipinas
31# @a+'a+an municipality has an o+.inance 1hich +eFui+es that all sto+es, +estau+ants,
an. othe+ esta'lishments sellin/ liFuo+ shoul. pay a 2xe. annual fee of P20,000#
=u'seFuently, the municipal 'oa+. p+opose. an o+.inance imposin/ a sales tax
eFui-alent to $I of the amount pai. fo+ the pu+chase o+ consumption of liFuo+ in sto+es,
+estau+ants, an. othe+ esta'lishments# The municipal mayo+ +efuse. to si/n the
o+.inance on the /+oun. that it 1oul. constitute .ou'le taxation#
4s the +efusal of the mayo+ ?usti2e.B
a# o# The +efusal of the mayo+ is un?usti2e. 'ecause .ou'le taxation is allo1e. in ou+
?u+is.iction#
'# o# The +efusal of the mayo+ is not ?usti2e. 'ecause the impositions a+e of .iNe+ent
natu+e an. cha+acte+#
c# o# The +efusal of the mayo+ is un?usti2e. 'ecause it is not 1ithin his po1e+#
.# o# The +efusal of the mayo+ is not ?usti2e. 'ecause .ou'le taxation 1ill /ene+ate
mo+e +e-enues#
32# This is a summa+y a.minist+ati-e +eme.y, seizu+e of +eal p+ope+ty to enfo+ce
payment of tax .ue!
UNIVERSITY OF THE PHILIPPINES
COLLEGE OF LAW
BAR OPERATIONS COMMISSION
Room 321 Malcolm Hall, Diliman, Quezon City 1101 Philippines
Telefax o! "20#$$1% loc# 31$ & Mo'ile o! 0"1(#")23"01
a# <e-y
'# Dist+aint
c# ;o+feitu+e
.# Tax lien
33# Tino is en/a/e. in 'uyin/ an. sellin/ of f+esh f+uits at the QDMa+t an. 8+anFue
Ma+Hets# He is also expo+tin/ canne. an. p+ese+-e. f+uits to Eapan# 4n 200%, he ma.e a
/+oss sales of P2,000,000# He is lia'le fo+ 78T +e/ist+ation fee of !
a# P$00
'# P1,000
c# P1,$00
.# Jxempt
3%# =hi+ley 1as allo1e. to .e.uct P200,000 'a. .e'ts 1+itten oN in 2003, 1he+e she ha.
a net income 'efo+e 'a. .e'ts of P1)0,000 an. a net loss of P20,000# 4 200%, she 1as
a'le to +eco-e+ the 'a. .e'ts 1+itten oN in full# The 'a. .e'ts +eco-e+y is!
a# Taxa'le to the extent of P1)0,000
'# Taxa'le to the extent of P20,000
c# Taxa'le to the extent of P200,000
.# ot taxa'le
3$# =epa+ation pay is taxa'le#
a# if sepa+ation is .ue to .eath, sicHness o+ in?u+y of employee
'# if employee -olunta+ily +esi/ne.
c# if employee +esi/ne. at the a/e of >0
.# if the employe+ close. shop
3># The follo1in/ a+e taxe. liHe co+po+ation
a# /ene+al p+ofessional pa+tne+ship
'# o+.ina+y 'usiness pa+tne+ship
c# estates an. t+usts
.# all of the a'o-e
3(# 78T is
a# special tax
'# local tax
c# speci2c tax
.# +e/+essi-e tax
3)# 4f monthly +ental income of a +esi.ential unit excee.s P 10,000 pe+ unit, the same
shall 'e su'?ect to 12I 78T#
a# T+ue, 1ithout any fu+the+ con.ition#
'# T+ue, only if the total /+oss annual +entals +ecei-e. excee. P 1#$M
c# ;alse, this is su'?ect to 0I 78T#
.# ;alse, this is exempt f+om 78T un.e+ R8 "33(
UNIVERSITY OF THE PHILIPPINES
COLLEGE OF LAW
BAR OPERATIONS COMMISSION
Room 321 Malcolm Hall, Diliman, Quezon City 1101 Philippines
Telefax o! "20#$$1% loc# 31$ & Mo'ile o! 0"1(#")23"01
3"# The p+elimina+y in-esti/ation of a f+au.ulent tax e-asion case may 'e en?oine. in the
follo1in/ cases#
a# 1hen the+e is a p+e?u.icial Fuestion
'# 1hen .ou'le ?eopa+.y is clea+ly appa+ent
c# 1hen cha+/es a+e manifestly false an. moti-ate. 'y lust fo+ -en/eance
.# 1hen the cou+t has no ?u+is.iction o-e+ the oNense
%0# =ale of +eal estate is su'?ect to 78T
a# T+ue, if ma.e in the +e/ula+ cou+se of t+a.e o+ 'usiness
'# ;alse, it is exempt if the +eal estate is not classi2e. as capital asset
c# ;alse, it is exempt if 1hat is sol. is a +esi.ential unit
.# T+ue, if 1hat is sol. is a +esi.ential unit
%1# ,hy is the ;+in/e @ene2ts Tax collecti'le f+om the employe+ an. not f+om the
employeeB
a# 7aluation of 'ene2ts is easie+ at the le-el of the employe+
'# Collection of ;@T is ensu+e. 'ecause it is 1ithhel. at sou+ce
c# The employee .oes not ha-e the means to pay
.# a an. ' a+e co++ect
%2# 8 taxpaye+ 1ith /+oss annual sales not excee.in/ P100, 000 is exempt f+om payment
of 'usiness tax an. +e/ist+ation +eFui+ements#
a# T+ue
'# ;alse, +eFui+e. to +e/iste+ 1ith the @4R 'ut exempt f+om the payment of +e/ist+ation
fee
c# ;alse, +eFui+e. to pay +e/ist+ation fee
.# ' an. c a+e co++ect
%3# ,hich of the follo1in/ statements is 1+on/B
a# The MC4T is eFual to 2I of the /+oss income of the co+po+ation
'# The MC4T is not compute. Fua+te+ly 'ut on an annual 'asis
c# The MC4T payments can 'e ca++ie. o-e+ fo+ the next 3 yea+s imme.iately follo1in/
such payment
.# The taxpaye+ shoul. pay the MC4T o+ the +e/ula+ income tax 1hiche-e+ is hi/he+#
%%# The follo1in/ a+e su'?ect to 3I common ca++ie+0s tax, except!
a# taxica' ope+ato+s
'# common ca++ie+s t+anspo+tin/ ca+/oes
c# tou+ist 'uses
.# moto+ t+icycles

%$# #8ssessment is necessa+y in the follo1in/ cases, except!
a# 'efo+e the p+elimina+y in-esti/ation of a f+au.ulent tax e-asion case coul. p+ospe+
'# to 2x the tax lia'ility of a taxpaye+
c# esta'lish a case fo+ ?u.icial action
UNIVERSITY OF THE PHILIPPINES
COLLEGE OF LAW
BAR OPERATIONS COMMISSION
Room 321 Malcolm Hall, Diliman, Quezon City 1101 Philippines
Telefax o! "20#$$1% loc# 31$ & Mo'ile o! 0"1(#")23"01
.# fo+ issuance of 1a++ant of .ist+aint o+ le-y
%># The manufactu+e an. impo+tation of the follo1in/ fo+ local consumption a+e su'?ect
to excise tax, except!
a# alcohol p+o.ucts
'# to'acco p+o.ucts
c# cinemato/+aphic 2lms
.# mine+al p+o.ucts
%(# The @4R commissione+ mayOOOOOOOOO payment of inte+nal +e-enue tax 1hen it appea+s
to 'e un?ustly o+ excessi-ely assesse., o+ that the a.minist+ati-e an. collection costs
in-ol-e. .o not ?ustify the collection the+eof#
a# comp+omise
'# a'ate
c# c+e.it
.# +efun.
%)# o c+e.itG+efun. of taxes shall 'e allo1e. unless the taxpaye+!
a# ;iles a 1+itten claim fo+ c+e.itG+efun. 1ith the @4R 1ithin 2 yea+s f+om payment
'# Pays the tax un.e+ p+otest
c# 8ppeals to the CT8
.# 8men.s his tax +etu+n
%"# The p+elimina+y in-esti/ation of a f+au.ulent tax e-asion case may 'e en?oine. in the
follo1in/ cases#
a# 1hen the+e is a p+e?u.icial Fuestion
'# 1hen .ou'le ?eopa+.y is clea+ly appa+ent
c# 1hen cha+/es a+e manifestly false an. moti-ate. 'y lust fo+ -en/eance
.# 1hen the cou+t has no ?u+is.iction o-e+ the oNense
$0# ,hich of the follo1in/ statements is 1+on/B
a# The MC4T is eFual to 2I of the /+oss income of the co+po+ation
'# The MC4T is not compute. Fua+te+ly 'ut on an annual 'asis
c# The MC4T payments can 'e ca++ie. o-e+ fo+ the next 3 yea+s imme.iately follo1in/
such payment
.# The taxpaye+ shoul. pay the MC4T o+ the +e/ula+ income tax 1hiche-e+ is hi/he+#