chap 1

Question 1

process or means by which the sovereign
through its law making body imposes burdens upon subjects and objects within its jurisdiction for the purpose of raising revenues to carry out the legitimate objects of the government.

Answer 1

Taxation

Question 2

Three Inherent Powers of the State

Answer 2

Police Power
Power of Taxation
Power of Eminent Domain

Question 3

promoting public welfare by restraining
and regulating the use of liberty and property.

Answer 3

Police power

Question 4

the State raises revenue to defray
the necessary expenses of the government.

Answer 4

Power of Taxation

Question 5

power of the state to acquire private property for the public purpose upon payment of just compensation.

Answer 5

Power of Eminent Domain

Question 6

Similarities among the Three Inherent Powers of the State

True or False
- Inherent in the state

Answer 6

True

Question 7

Similarities among the Three Inherent Powers of the State

True or False
- Exist independently in the constitution

conditions for their exercise may be prescribed by the constitution

Answer 7

True

Question 8

T/F (similarities of the 3 powers)
State interferes with private rights and properties

Answer 8

T

Question 9

T/F (similarities of the 3 powers)
Legislative in nature and character

Answer 9

T

Question 10

T/F (similarities of the 3 powers)
Presuppose an equivalent compensation received, directly or indirectly, by the persons affected.

Answer 10

T

Question 11

Power to enforce contributions to raise
government funds.

Answer 11

Power of Taxation

Question 12

Authority: May be granted to public service/utility companies

Answer 12

Power of Eminent Domain

Question 13

Authorized by the government

Answer 13

Power of Taxation and Police Power

Question 14

The taking of private property for public
use.

Answer 14

Power of Eminent Domain

Question 15

ex. priest nagtayo ng church may tax ba yon?

Answer 15

no kasi for religious purposes

Question 16

ex. priest nag tayo ng sari sari store may tax ba?

Answer 16

oo kasi business naman na yon and ang goal ay to earn money

Question 17

ex. priest nag bebenta ng mga rosary, santo etc may tax ba yon?

Answer 17

oo kasi business naman na yon and ang goal ay to earn money

Question 18

ex. nagtayo ng commercial building sa lupa pero nirent lang sino magbabayad ng tax? yung nag rent o yung may ari ng lupa?

Answer 18

yung nag rent

Question 19

AFFECTED: Community or a class of individuals.
Applies to all persons, property and
exercises that may be subject thereto

Answer 19

Power of Taxation
Police Power

Question 20

AFFECTED: Property owner

Answer 20

Power of Eminent Domain

Question 21

Scope of Taxation
-it suggests that the government’s authority in imposing taxes is of the highest order and cannot be easily limited or challenged. It reflects the ultimate power of the government in the realm of taxation.

Answer 21

Supreme

Question 22

Scope of taxation
tax system is thorough and all-encompassing. It implies that the tax laws and regulations cover a wide array of subjects, leaving few, if any, significant areas untouched.

Answer 22

Comprehensive

Question 23

Scope of Taxation
-the government has broad and unrestricted powers to levy taxes across various types of income, transactions, properties, or activities.

Answer 23

Plenary

Question 23

Contribution becomes
part of public fund

Answer 23

Effect of Taxation

Question 24

No transfer or title. There may just be a restraint on the injurious use of property.

Answer 24

Effect of Police Power

Question 25

Imposition: No limit

Answer 25

Taxation

Question 26

Imposition: Sufficient to cover cost of the license and the necessary expenses of police surveillance and regulation

Answer 26

Police Power

Question 27

Imposition: The owner is paid equivalent to the fair value of his property.

Answer 27

Power of Eminent Domain

Question 28

purpose of taxation

Answer 28

primary: revenue secondary: regulatory

Question 29

theory of taxation

Answer 29

lifeblood necessity

Question 30

Government’s basic function

Answer 30

Lifeblood theory

Question 31

Preserve the state’s sovereignty To give protection and facilities

Answer 31

Necessity theory

Question 32

Scope of the Power of Taxation

Answer 32

Comprehensive Unlimited Plenary Supreme

Question 33

Nature/ Characteristics of the State’s Power to Tax

Answer 33

Inherent in sovereignty Legislative Exemptions of government entities, agencies and instrumentalities International Comity Limitation of Territorial Jurisdiction Strongest among the inherent powers

Question 34

Exceptions to Non-Delegation Rule

Answer 34

President Local government Administrative agencies Constitutional and inherent limitations

Question 35

Situs of Taxation

Answer 35

Place of taxation

Question 36

Factors in Determining Situs of Taxation

Answer 36

a. Subject matter ( person, property, or activity) b. Nature of tax c. Citizenship d. Residence of the taxpayer e. Source of Income f. Place of excise, business or occupation being taxed

Question 37

SUM OF MONEY FOR THE USE OF SOMETHING

Answer 37

TOLL

Question 38

A SANCTION IMPOSED AS A PUNISHMENT

Answer 38

PENALTY

Question 39

PROPORTIONAL CONTRIBUTION FROM OWNERS OF LANDS FOR SPECIAL BENEFITS

Answer 39

SPECIAL ASSSESSMENT

Question 40

all funds or income derived by the government

Answer 40

REVENUE

Question 41

pecuniary aid directly granted the government to an individual or private commercial enterprise

Answer 41

SUBSIDY

Question 42

charge imposed under the police power

Answer 42

PERMIT/LICENSE FEE

Question 43

taxes imposed exported from or imported into a country.

Answer 43

CUSTOMS DUTIES

Question 44

book of rates containing kinds of merchandise with corresponding duties to pay

Answer 44

TARIFF

Question 45

There is a burden of two or more impositions

Answer 45

Double Taxation DIRECT DOUBLE TAXATION means taxing twice: 1. By the same taxing authority, jurisdiction or taxing district 2. For the same purpose 3. In the same year or taxing period 4. Same subject or object 5. Same kind or character of the tax

Question 46

TRANSFER OF TAX BURDEN

Answer 46

SHIFTING

Question 47

producer pays the tax and endeavor to recoup himself by improving his process of production

Answer 47

TRANSFORMATION

Question 48

USE OF ILLEGAL MEANS

Answer 48

EVASION

Question 49

exploitation of legally permissible alternative

Answer 49

TAX AVOIDANCE

Question 50

grant of immunity

Answer 50

EXEMPTION

Question 51

reduction in the selling price

Answer 51

CAPITALIZATION

Question 52

are natural persons with income derived from within the territorial jurisdiction of taxing authority.

Answer 52

INDIVIDUAL TAXPAYERS

Question 53

CITIZEN OF PHILS

Answer 53

1. Born with father and/or mother as Filipino citizens 2. Born before Jan. 17,1973 of Filipino mother who elects Philippine citizenship upon reaching the age of maturity 3. Acquired Philippine citizenship after birth (naturalized) in accordance with Philippine Laws

Question 54

A Filipino citizen who permanently resides in the Philippines

Answer 54

RESIDENT CITIZEN

Question 55

A citizen of the Philippines who: Establishes to the satisfaction of the Commissioner the fact of his physical presence abroad with a definite intention to reside therein. Leaves the Philippines during the taxable year to reside abroad Works and derive income from abroad and his employment requires him to be physically present abroad most of the time (at least 183 days) during the taxable year Have been previously considered as non-resident citizen and who arrives in the Philippines at any time during taxable year to reside permanently

Answer 55

NON RESIDENT CI

Question 56

Individual whose residence is within the Philippines and who is not a citizen thereof.

Answer 56

RESIDENT ALIEN

Question 57

Individual whose residence is not within the Philippines and who is not a citizen thereof.

Answer 57

NON RESIDENT ALIEN

Question 58

Alien is carrying on a business in the Philippines Has stayed in the Philippines for more than 180 days

Answer 58

NON RESIDENT ALIEN ENGAGED IN TRADE OR BUSINESS

Question 59

has stayed in the Philippines for 180 days or less

Answer 59

NON RESIDENT ALIEN NOT ENGAGED IN TRADE OR BUSINESS

Question 60

refers to income such as compensation income, business income, and income from practice of profession

Answer 60

ORDINARY INCOME

Question 61

Subject to final withholding taxes are certain passive incomes from sources within the Philippines

Answer 61

PASSIVE INCOME

Question 62

- Capital gains from sale of shares of stocks of a domestic corporation - Capital gains from sale of real property in the Philippines

Answer 62

Capital gains subject to gains tax

Question 63

is defined as a sole proprietor or an independent contractor who reports income earned from self employment.

Answer 63

self employed

Question 64

is a “person formally certified by a professional body belonging to a specific profession

Answer 64

Professional

Question 65

Requisite to avail 8% preferential rate

Answer 65

The gross sales/receipt and other non-operating income does not exceed the vat threshold of 3,000,000. The SEP shall be non-vat registered The gross sales/receipts were not derived from vat-exempt sales and transactions. The SEP is not subject to percentage tax other than under section 116 of the tax code as amended; and The SEP signifies his/her intention to elect the 8% income tax.

Question 66

deriving income fom both from self-employment and compensation (arrising from employer-employee relationship).

Answer 66

mixed income earner

Question 67

include all the property held by the taxpayer (whether or not connected with his trade or business) not included in the definition of ordinary assets. Generally, assets not used or held for sale in the ordinary course of business are classified as capital assets.

Answer 67

Capital asset

Question 68

Ordinary Asset

Answer 68

Stock in trade of the taxpayer or other property of a kind which would properly be included in the inventory of the taxpayer if on hand at the close of taxable year. Property used in trade or business subject to depreciation Real property held by the taxpayer primarily for sale to customers in the ordinary course of trade or business. Real property used in trade or business of the taxpayer.

Question 69

capital gains

Answer 69

Subject to CAPITAL GAINS TAX (CGT) pertain to sale of: a. Shares of stock of a domestic corporation sold directly to a buyer = 15% of capital gain b. Sale of real properties located in the Philippines CGT = 6% of which is higher between GSP (gross selling price) and FMV (fair market value)

Question 70

the family home of the individual taxpayer which refers to his dwelling house including his family.

Answer 70

Principal residence

Question 71

tax exemption

Answer 71

1. The proceeds are fully utilized in acquiring or constructing a new principal residence within 18 calendar months from the date of disposition. 2. The historical cost or adjusted basis of the real property sold or disposed shall be carried over to the new principal residence built or acquired. 3. The BIR shall have been duly notified by the taxpayer within 30 days from the date of sale or disposition through a prescribed return of his intention to avail of the tax exemption. 4. The tax exemption can only be availed of once every 10 years.

Question 72

A method of collecting income tax in advance from the recipient of income through the payor thereof, which is constituted by lawas the withholding agent of government.

Answer 72

creditable withholding tax

Question 73

income tax due of married tax payers

Answer 73

Husband and wife shall compute separately their individual income tax based on their respective total taxable income provided that if any income cannot be definitely attributed to or identified as income exclusively earned or realized by either of the spouse, the same shall be divided equally between the spouses for the purpose of determining their respective taxable income.

Question 74

a worker in the private sector paid the statutory minimum wage. The rate is fixed by the Regional Tripartite Wage and Productivity Board as defined by the Bureau of Labor and Employment Statistics.

Answer 74

minimum wage earner

Question 75

filing of income tax return

Answer 75

BASIC TAX ➔ For Purely Compensation Income Earners On or before April 15 of the succeeding year ➔ For Business Income Earners The individual taxpayer is required to file a quarterly tax return ( May 15, Aug 15, Nov 15, and April 15)

Question 76

dates

Answer 76

FINAL WITHHOLDING TAX ON PASSIVE INCOME Prior to 2018 - January to November – 10th day of the month December – January 15 2018 – not later than the last day of the month CAPITAL GAINS TAX a. Share of Stock Ordinary Return – 30 days after each transaction Final Consolidated Return – on or before April 15 of the following year b. Real Property – 30 days following each sale or other disposition

Question 78

Manner of filing

Answer 78

a. Manual Filing b. Electronic Filing and Payment System (EFPS) c. eBIR Forms 1st installment: at the time of filing the annual ITR 2nd installment: on or before October 15 following the close of the calendar year

Question 79

Place of filing

Answer 79

1. Authorized Agent Banks 2. Revenue District Officer 3. Collection Agent 4. Duly Authorized City or Municipal Treasurer

Question 80

Persons required to file income tax return

Answer 80

1. Individuals engaged in business and/or practice of profession 2. Individuals deriving compensation from two or more employers concurrently at any time during the taxable year 3. Employees deriving compensation income, the income tax of which has not been withheld correctly 4. Individuals deriving other non-business, non-professional-related income in addition to compensation income not otherwise subject to final tax 5. Individuals receiving purely compensation income from a single employer 6. Non-resident alien engaged in trade or business in the Philippines deriving purely compensation income

Question 81

Persons not required to file itr

Answer 81

1. An individual earning purely compensation income whose taxable income does not exceed 250,000. 2. An individual whose income tax has been correctly withheld by his employer 3. An individual whose sole income has been subjected to final withholding tax 4. Minimum wage earners, the Certificate of Withholding filed by the respective employers, duly stamped “Received” by the Bureau of Internal Revenue

Question 82

Filipino citizens who are physically present in a foreign country as a consequence of their employment. Their salaries and wages are paid by an employer abroad.

Answer 82

OVERSEAS CONTRACT WORKER (OCW)/OVERSEAS FILIPINO WORKER (OFW)