NOEL B. GERASTA JR. MARCH 21, 2020
BSBA-2E MWF (7:00PM-8:00PM)
TAXATION (Income Tax)
MS. RIA MAE LAYTO
Page.179-180 : TRUE OR FALSE
1. FALSE Foreign
... [Show More] corporation, whether engaged in business in the Philippines or not, is
taxable on income derived from sources within and without the Philippines.
2. TRUE Income derived by offshore banking units authorized by the BSP, from
Foreign currency transactions with local commercial banks is subject to 10% final tax.
3. TRUE Resident foreign corporations apply to a foreign corporation not engaged in
trade or business within the Philippines.
4. FALSE A domestic, resident foreign and non-resident foreign corporations may
deduct from their business income, itemized deductions under the Tax Code.
5. FALSE A return showing the cumulative income and deductions need not be filed if
the operations for the quarter and the preceding quarters yielded no income tax due.
6. FALSE Non-resident foreign corporation receives the same tax treatment as domestic
and resident foreign corporations with regard to capital gains from sale of shares of
stock not traded in the stock exchange.
7. TRUE The 10% tax on the taxable income of a proprietary educational institution and
non-profit hospital is absolute.
8. TRUE Foreign corporation is created and organized under the laws of countries other
than the Philippines.
9. TRUE Dividends received from a domestic corporation by a non-resident foreign
corporation are subject to a final withholding tax of 15% on certain condition.
10. TRUE Domestic corporation is taxable on all income derived from sources within
and outside the Philippines.
11. TRUE subject to the provisions of existing special laws or general laws, all
corporations, agencies, or instrumentalities owned or controlled by the government
shall pay such rate of tax upon their taxable income as are imposed by the Code upon
corporations or associations engaged in a similar business, industry or activity.
12. TRUE Any profit remitted by a branch to its head office shall be subject to a 15% tax
which shall be based on the total profits applied or earmarked for remittance without
deduction for the tax component, thereof, except those activities which are registered
with the Philippines Economic Zone Authority.
13. TRUE Corporations on their income, are taxed, generally, from 30% to 35%
depending on the taxable year.
14. TRUE Non-resident owner or lessor of vessels chartered by Philippine nationals is
taxed at 4.5 of gross rentals, lease or charter fees from leases or charters to Filipino
citizens or corporations, as approved by the Maritime Industry Authority.
15. FALSE Interests on foreign loans contracted on or after Aug.1, 1986 by a nonresident corporation are taxed at 10%.
16. FALSE Non-resident cinematographic film owner, lessor or distributor is taxed at
15% of gross income.
17. FALSE International air carrier and international shipper doing business in the
Philippines shall pay a tax of 10% on its gross Philippine billings.
18. TRUE Every corporation shall file in duplicate a quarterly summary declaration of its
gross income and deductions on a cumulative basis for the preceding quarter or
quarters upon which the income tax shall be levied, collected and paid’
19. TRUE If the gross income from unrelated trade, business or other activity of a
proprietary educational institution or non-profit hospital exceeds 50% of the total
gross income derived from all sources, the tax prescribed under Section 27(A) shall be
imposed on the entire taxable income.
20. TRUE Non-resident foreign corporation applies to a foreign corporation engaged in
trade or business within the Philippines.
21. FALSE For domestic and resident corporations adopting the fiscal-year accounting
period, the taxable income shall be computed without regard to the specific date when
the specific sales, purchases and other transactions occur such that their income and
expenses for the fiscal year shall be deemed to have been earned and spent equally for
each month of the period.
22. TRUE Non-resident owner or lessor of aircraft, machinery and other equipment is
taxed at 7.5 of gross rentals, charters and other fees.
23. FALSE corporation may not be income tax-exempt on its other activities the tax
rates of which shall be 30% to 35% depending on the taxable year.
24. TRUE Partnership other than a general professional partnership is also taxable on its
income as a general professional partnership.
25. TRUE Domestic corporation is created or organized under Philippine laws.
PAGE 181-186: MULTIPLE CHOICE
1. Guidant Resources Corporation, a corporation registered in Norway, has a 50 MW
electric power plant in San Jose, Batangas. Aside from Guidant’s income from its power
plant, which among the following is considered as part of its income from sources within
the Philippines?
Answer:
a. Gains from the sale to an Ilocos Norte power plant of generators bought
from the United States.
2. Aplets Corporation is registered under the laws of the Virgin Islands. It has extensive
operations in Southeast Asia. In the Philippines, its products are imported and sold at a
mark-up by its exclusive distributor, Kim;s Trading Inc. The BIR complied a record of all
the imports of Kim from Aplets and imposed a tax on Aplets net income derived from its
exports to Kim. Is the BIR correct?
Answer:
a. Yes. Aplets is a non-resident foreign corporation engaged in trade or business
in the Philippines.
3. What is the rule on the taxability of income that a government educational institution
derives from its school operations? Such income is
Answer:
a. Subject to 10% tax on its net taxable income as if it is a proprietary
Educational institution.
4. Zygomite Minerals, Inc., a corporation registered and holding office in Australia, not
operating in the Philippines, may be subject to Philippine income taxation on
Answer:
a. Gains it derived from sale in Australia of an ore crusher it
bought from the Philippines with the proceeds converted to
pesos.
5. Lualhati Educational Foundation, Inc., a stock educational institution organized for profit,
decided to lease for commercial use a 1,500 sq. m. portion of its school. The school
actually, directly, and exclusively used the rents for the maintenance of its school
buildings, including payment of janitorial services. Is the leased portion subject to real
property tax?
Answer:
d. Yes, since the leased portion is not actually, directly, and
exclusively used for educational purposes.
6. Which of the following is not an income tax on corporations.
Answer: b. stock transaction tax
7. The following domestic corporations are generally tsxed at the same rate. Which is not?
Answer:
a. taxable partnerships [Show Less]