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Question #1

Hari Corp organized in 2016 had the following:

In 2018
Gross income P20,000,000
Allowable deductions:
Itemized allowed by the NIRC 17,000,000
Special allowed by the NIRC 4,000,000
Incentives allowed by special laws 2,000,000
Net operating loss (P3,000,000)

In 2019
Gross income P33,000,000
Allowable deductions:
Itemized allowed by the NIRC 18,000,000
Special allowed by the NIRC 4,000,000
Incentives allowed by special laws 3,000,000
Net income P 8,000,000

How much is the income tax still due in 2019?

Question #2

Felicity Smoak reported the following for the year 2019:

Gross income P5,000,000


Cost of sales 3,000,000
Salaries of employees, net of 100,000 withholding tax
and P50,000 SSS, Medicare and Pag-ibig premiums
contributions 800,000
Fringe benefits given to rank and file employees 300,000
Fringe benefits given to managerial employees 136,000
Representation and entertainment exp. (all business connected) 100,000
Rent expense 120,000
Donation to religious and charitable institutions 500,000

The amount that Felicity will report as net income before exemptions is

Question #3

Ang Cute Ko Inc. is a domestic corporation engaged in the manufacturing and sale of beauty products to
make everyone cute. After investigation, the BIR on December 17, 2010 sent a notice of assessment to
Ang Cute Ko Inc. for allegedly failing to remit withholding tax at source for the fourth quarter of 2009 on
its royalties. It demanded payment of P3,000,000.00. The notice was received by the corporation on
December 19, 2010.

On February 4, 2013, the corporation thru counsel, protested the assessment and requested its
cancellation or withdrawal on the ground that it lacked factual and legal bases. On December 19, 2015,
the Commissioner of the BIR rendered a decision reducing the assessment to P1,500,000.00.

When is the last day for the BIR to collect the disputed tax?
Question #4

Generally, all tax liabilities covering taxable years ____ and prior shall be covered by R.A. 11213.

Question #5

A resident citizen, with residence in Masbate city, donated a property located in Cebu city to a
handsome macho guy who lives in Davao City. The donation was perfected on January 28, 2019 when
the donor and donnee met in a motel at Cavite City. If the actual transfer of property was made on
February 15, 2019, WHEN is the deadline and IN WHAT CITY will the donor file the donor’s tax return.

Question #6

The following data, were presented to you by Coulson Inc. who requested you to compute the
percentage tax payable:
Total sales for the month PhP 40,000
Receivable, beginning of the month 30,000
Receivable, end of the month 20,000

Out of the total collections, 80% were net of the 3% withholding tax. How much was the percentage tax
payable for the month?

Question #7

In a particular month the following selected data were taken from the books of a Nikita Corporation, a
VAT registered taxpayer:

Domestic sales PhP 660,000


Export sales 1,500,000
Purchases from VAT-registered persons:
Connected with export sales 550,000
Connected with domestic sales 220,000
Operating expenses 110,000

How much input tax is refundable, assuming the input tax attributable to export sale is taken as
deduction form output vat?
Question #8

Lunox Corporation, a corporation engaged in the leasing of residential and commercial establishments
reported the following for the calendar year (CY) ended December 31, 2018.

Revenue from Lease of Residential Establishments PhP 10,980,000


Revenue from Lease of Commercial Establishments 50,780,000
Gain on sale of idle land classified as capital asset 3,600,000
Interest income from loans to employees 750,000
Interest income from bank deposits 267,000
Realized foreign exchange gain 1,890,000
TOTAL PhP 68,267,000

Lunox corporation incurred Entertainment, Amusement and Recreation (EAR) expenses during the year
and would like to know the amount of EAR limit that they can deduct for purposes of filing the Annual
Income Tax Return for the CY ended December 31, 2018.

Question #9

Aldini Corporation bought a piece of land as well as the old building erected on it. In the Deed of Sale,
the land has an allocated price of P2,000,000 and the building, P500,000. The building was immediately
demolished to give way to the construction of a factory. The cost of the removal was P25,000 and the
proceeds from sale of scrap amounted to P10,000. How much was the deductible loss?

Question #10

Akihabara, Inc., a non-bank financial intermediary performing quasi-banking functions, has the following
data for the first month of the current year:

Particulars Amount
Income from financial leasing (remaining maturity of PhP 4,567,800
instrument is more than 5 years)
Dividends and equity shares in net income of 239,200
subsidiaries
Rentals of properties 506,000
Net trading gains within the taxable year on foreign 300,000
currency

How much is the gross receipts tax?


Question #11

Dalagang Pilipina Company, an integrated resort, claimed the following input taxes during the quarter
ended December 31, 2018:

Monthly
Month of Useful life Acquisition
Capital Goods Input Tax amortization
Purchase (in months) cost
per Company

Directly related to revenues from Rooms:


Improvement - Deluxe October 48 P 400,000 P 48,000 P 1,000
Queen
Improvement - Standard October 24 200,000 24,000 1,000
Room
Improvement - Deluxe October 21 350,000 42,000 2,000
King
Master Suite Chandelier October 10 60,000 7,200 720
Studio Room Expansion November 80 1,000,000 120,000 1,500
Junior Suite Renovation November 90 1,500,000 180,000 2,000
Cabana Bathroom December 75 1,000,000 120,000 1,600
Installation

Assuming the input tax are properly substantiated for value-added tax (VAT) purposes, compute the
input taxes that Dalagang Pilipina Company can still claim as deductions against the output tax of the
Company for the particular quarter.
Question #12

For January to September 2018, Jay Pia Corporation (the “Company”) did not subject to withholding
payments to regular supplier of goods and services since it argues that it has not yet received a Notice of
Inclusion as a Top 20,000 Private Corporation from the Bureau of Internal Revenue (BIR) ever since it
started its operation on 2014.

However, the Company was included on the List of Additional Withholding Agents published by the BIR
on October 8, 2018.

The Company has the following information for the month of November 2018:

Supplier Name Nature of Payment* Purchases Purchases (Net EWT Remitted


(Gross of VAT) of VAT) to the BIR
Lazaduh Payment for made-to-order PhP 386,400 PhP 345,000 PhP 3,450
Philippines Inc. (customized) goods
Payment for the 33,040 29,500 295
installation services related
to the above payment
Dr. Miki Belo Payment for medical 1,106,000 987,500 98,750
(whose gross services
income exceeds
PhP 3,000,000)
Sun, Moon and Payment for digital 605,472 540,600 10,812
Star Cinema Inc. advertisement [upon
checking of the documents
provided, you notice that
this expense is merely
supported by a deposit slip
and as confirmed by the
Company, no official receipt
(OR) has been issued to
them]
Notes:
* All transactions are properly substantiated for VAT purposes unless otherwise stated.

Based on the above information, how much is the deficiency EWT for the month of November 2018?
Question #13

Glory Napacabagal-Awoyo, an employee of the City Mayor’s office in Pampanga, will have the following
compensation income for the calendar year (CY) 2018:

Basic Monthly Pay PhP 24,500


Monetary values of the following unused leaves:*
Vacation Leave – 8 days 9,800
Sick Leave – 10 days 12,250
Bereavement Leave – 12 days 14,700
Monthly Clothing Allowance 400
Rice Subsidy per month 1,800
Laundry Allowance per month 250
Productivity Incentive Bonus 15,000
Medical cash allowance to dependents during the year 1,450
Gift certificate during Christmas 5,000
*Glory will monetize the unused leaves for the CY.

During the celebration of Araw ng Pampanga, Glory will be awarded PhP 20,000 cash for rendering 10
years of service in the city. In addition, he will also receive 13th to 15th month pays equivalent to his basic
monthly pay. Glory has three (3) qualified dependents during the covered period. Finally, he has no
income other than those mentioned above.

Under the TRAIn law, how much will be Glory’s taxable compensation income?

Question #14

This is referred to as non-alcoholic beverages of any constitution (liquid, powder, or concentrates) that
are pre-packaged and sealed in accordance with the Food and Drug Administration (FDA) standards, that
contain caloric and/or non-caloric sweeteners added by the manufacturers.

Question #15

Computation. For 2018, Mr. Pendon, aside from his salary of P135,000, earned or paid the following as
appropriate:
In Php
Mandatory contributions (SSS, PHIC, HDMF) 5,000.00
Non-taxable benefits 11,000.00
Overtime, night shift differential, hazard and holiday pay 140,000.00

Per checking with the SSS, PHIC and HDMF contribution table, you were able to ascertain that Mr.
Pendon should only have contributed P3,000. Compute for his taxable income.
Question #16

During 2018, PCSO awarded the following lotto winnings to the following persons
Kath Sapitan NRA NETB P 6,500
Adrian Picardal RA P 125,200
Kyle Protacio RC 1,940,000
Andrew Familian NRC 5,813,000
Dayan Garcia NRA ETB 923,000

How much is the total final tax for the above winnings?

Question #17

Jeremy, a lessor rents his 2 commercial and 10 residential units for monthly rent of P60,000 and P15,000
per unit, respectively. During the taxable year, his accumulated gross receipts amounted to P3,240,000
(P1,440,000 from commercial units and P1,800,000 from residential units). How much is the VAT?

Question #18

A legal heir can be exempt from the final withholding tax on bank withdrawals if such bank account is
included in the gross estate, the estate tax is paid, and the legal heir present the:
a. eCAR of the Estate
b. ITR of the Estate
c. BIR Form No. 2306
d. Notice of Death

Question #19

Question #20

Corporate taxpayers are required to file their income tax returns:


a. Annually
b. Monthly and quarterly
c. Quarterly and annually
d. Monthly and annually
Question #21

A citizen and a resident of the Philippines made the following donations:


October 5, 2018 Donation to legitimate daughter on account of marriage P200,000
Donation to his office secretary, daughter of his first cousin, 100,000
on account of forthcoming marriage

December 6, Donation to a naturally adopted daughter of the donor’s 100,000


2018 sister on account of marriage
Donation to his controlled corporation 50,000

December 25, Donation to a family friend who assumed unpaid mortgage 70,000
2018 of P20,000
Donation to an adopted son, on account of marriage 50,000

How much is the donor’s tax due on December 6, 2018?

Question #22

Boboy is the current Philippine national boxing champion in the flyweight division. He defended his
crown against the number one challenger Bambam in a boxing exhibition, who also featured other
boxers in supporting bouts. The following data were made available after the flight:
Gate receipts P700,000
Income from live TV coverage 500,000
Income from motion picture rights 300,000
Total P1,500,000
Less: Prizes given to boxers P500,000
Other expenses 1,700,000 (2,200,000)
Net loss (P700,000)
How much is the amusement tax due?

Question #23

A PEZA-registered entity engaged as an Ecozone Developer, realized export sales at P56,250,000,


incurring he following deductions:
Direct salaries P9,750,000
Direct materials used 16,500,000
Supplies and fuels used 1,500,000
Depreciation of:
Machinery and equipment 750,000
Building 1,125,000
Rent expense on Machinery 187,500
Utility charges 281,250
Financing charges 26,250
Administrative expenses 1,725,000
Marketing expenses 937,500
Other operating expenses 952,500
Incidental losses 240,000

What is the income tax allocated to the National Government?


Question #24

Mr. A is a single proprietor in manufacturing business. He owns the piece of land and buildings where
he conducts manufacturing operations. However, selling activities are in a building that he is renting
in the shopping mall of the metropolis. In 2018, data on operations follow:
Gross profit from sales P16,000,000
Depreciation of buildings-Manufacturing 200,000
Amortization of patents 300,000
Contributions to a pension trust set up during the year:
Covering past service cost 2,000,000
For present service cost 50,000
Provision for bad debts (written off during the year was P60,000) 80,000
Research and development costs with benefits to be realized from it 1,000,000
starting the second semester of the year ( to be treated as Deferred
Charges)
Expenditures for leasehold improvements on rented building (with useful 1,200,000
life of 30 years and remaining term of the lease of 20 years)
Contributions to :
Government, for priority activity in housing 700,000
Quiapo Catholic Church 3,000
Earthquake victims in ABC City 100,000
Other expenses of operations 10,000,000

The taxable income for 2018 is:

Question #25

ABC Corporation employs both regular and senior employees and paid the following
compensation:

Regular employees P800,000


Senior citizen employees:
 With salary grade above poverty level – P200,000
 With salary grade below poverty level- P100,000
Using the above information, and that 20% of the regular employees are persons with disability
receiving a total compensation of P160,000, the deductible compensation expenses of the corporation is

Question #26
Question #27

Question #28

Question #29
Question #30

Question #31
Question #32

How much is the total input VAT?

Question #33

A PEZA Registered has the following data

Creditable withholding taxes from the first 3 quarters amounted to P 98,000 (including P10,000 CWT
dated 2019) while CWT for the 4th quarter totalled P33,600 (excluding CWT not in the name of the
company), How much is the income tax still due to the BIR?

Question #34

Question #35

A Taxpayer filed his income tax return on April 10, 2018. On December 31, 2024 it was discovered that
the ITR was false and fraudulent. Based on the investigation, it was discovered that the deficiency tax
was P55,000.
 When is the deadline for the BIR to file an assessment?
 How much will be paid by the tax payer if the deadline to pay was April 15, 2025 but he paid on
July 15, 2026?