Income Tax In General

Question 1

Tax Code of___^

Answer 1

1997

Question 2

Tax on person’s income, emoluments, profits arising from property, practice of profession, conduct of trade or business less deductions

Answer 2

Income Tax

Question 3

3 Income Tax Systems

Answer 3

Global - subjected to a tax at fixed rate

Schedular - the various types/items of income (compensation, business income, income from profession) subjected to schedules characterized by graduated tax rates

Semi-schedular or Semi-global –Partly global or partly schedular

Question 4

The Philippine Income Tax System

Answer 4

Semi-schedular System

Partly Global partly Schedular

Question 5

TorF? Income tax is an excise tax

Answer 5

T

Question 6

TorF? Income tax is a personal Tax

Answer 6

F. Excise Tax!

Question 7

5 Characteristics of PH Income Tax

Answer 7

1. National tax as to taxing authority
2. General Tax as to purpose
3. Excise tax as to subject matter
4. Progressive as to rate
5. Direct as to incidence

Question 8

3 Tests In Determining When Income is Taxable

Answer 8

1. Realization Test - Accrual
2. Claim of Right Doctrine -
3. All Event Test

Question 9

Accounting Periods for Individual and Corporation?

Answer 9

Individual - Calendar Perion ONLY!

Corporation - EITHER Calendar or FY

Question 10

Recognition Method for Long Term Construction Contracts?

Answer 10

Percentage of Completion Only

Question 11

The Situs of Interest Income is ____ of the debtor

Answer 11

Residence

Question 12

Dividends are considered WITHIN the PH if received from?

Answer 12

1. Domestic Corporation
2. Foreign Corporation - should be more than 50% of GI are earned within. Otherwise, WITHOUT!

Question 13

Situs of Services is where____

Answer 13

Performed

Question 14

Situs of:

Rentals and Royalties is where the property_____

Sale of Real Property

Answer 14

Located

Question 15

Situs of Personal Property:

Answer 15

Where sold.

If Produce in the PH - partly within and without

Question 16

NOT required to file an income tax return for the particular income or include the same in the computation of his taxable income subject to regular income tax

Answer 16

FWT

Question 17

In____, the income received by the payee is to be included in his gross income subject to normal income tax, and the tax withheld is a credit from income tax due

Answer 17

Creditable Withholding Tax (CWT)
-Advance Tax Payment by taxpayer on the annual tax

Remember, Schedular/Graduated rates parin nag tax sa income na yan (like compensation). Kasi pag Final Tax, di na dapat kasama sa GI nya

Question 18

The full and final payment of income tax due

Answer 18

Final Withholding Tax (FWT)

Question 19

Explain Income Tax Due vs. Payable

Answer 19

Tax Due xx
Less: Withholding Tax xx
Creditable Tax xx
=Tax Payable (Refundable)

Question 20

If a taxpayer intends to dispute the validity of a local tax ordinance the correct remedy is to appeal it with the?

a. Secretary of Justice
b. Court of Tax Appeals
c. Local Board of Assessment Appeals
d. Regional Trial Court

Answer 20

Secretary of Justice

Question 21

TorF?

In determining the situs of taxation, the subject matter of the tax is not to be considered at all.

In a gratuitous transfer of property, situs is the taxpayers residence, citizenship or location of the property

Answer 21

False, True

Question 22

Note:

The separation, due to the economic situation, is one which is beyond the employees’ control, hence excluded from gross income and not subject to income taxation. The age of the employee, and his years of service does not matter

Answer 22

From ICPA

Question 23

A suit filed by a taxpayer questioning the constitutional of a law on the theory that the expenditure of public funds of the government for the purpose of administering an unconstitutional law constitutes a misapplication of such funds

Answer 23

derivative or representative suit

Question 24

TorF?

The basis of or rationale for taxation explains the reason why a State may impose taxes.

The theory of taxation explains why there is a need to impose taxes

Answer 24

True
True

Question 25

TorF?
There is no constitutional limitation if Congress will pass a law subjecting the AFP to taxation.

Answer 25

True

Question 26

A person may be imprisoned for

non-payment of VAT
failure to pay the community tax
non-payment of capital tax
failure to pay a debt

Answer 26

non-payment of VAT

Question 27

The 30% income tax is increased to 35% by the Congress for the purpose of raising revenue to be used for national road expansion project near Sabong Corporation, a private corporation. Is the exercised of the taxing power unconstitutional?

Answer 27

No, because it is exercised directly for public purpose and the benefit to a private entity is only incidental