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CORRECT ANSWERS:

1.D

2.D

3.B

4.C

5.D

1.A Malaysian, occupying a managerial position in an Offshore Banking Unit located in Taguig had the following data for the taxable year 2018

Salaries receivedP120,000

Other emoluments50,000

De minimis benefits5,000

Interest income from deposit substitutes 20,000

Interest income from long-term Philippine Bank Deposit10,000

Dividend income from a domestic corporation150,000

Gain from sale of shares of stock of a domestic corporation

Held as investment sold outside of the local stock exchange 175,000

The total income tax expense of the taxpayer is:

a)P73,000c) P57,000

b)P70,500d) P83,000

2.Which of the following shall not be subject to the 20% final tax? (EXPLAIN THE CORRECT ANSWER..SHORT EXPLANATION ONLY)

a)Amount of interest from any currency bank deposit and yield or any other monetary benefit from deposit substitutes and from trust funds and similar arrangements

b)Winnings other than Philippine Charity Sweepstakes and Lotto winnings, regardless of amount

c)Philippine Charity Sweepstakes and Lotto winnings exceeding P10,000

d)Prizes amounting to ten thousand pesos (P10,000) or less

3.A taxpayer received during the taxable year the following passive income derived from within the Philippines:

Interest on bank deposit under FCDU (net)P231,250

Royalty on a software application (gross)95,000

Dividend income RFC (gross)150,000

If taxpayer is a non-resident alien engaged in business, the final tax on the above passive income would amount to

a)P52,750c) P28,250

b)P19,000d) P37,750

EXPLAIN THE CORRECT ANSWER (short explanation only)

4.Statement 1: Any income of nonresident individual taxpayers from transactions with depository banks under the expanded foreign currency deposit system shall be exempt from income tax

Statement 2: Any income of nonresident individual taxpayers from transactions with offshore banking units shall be exempt from income tax

a)Only statement 1 is correct

b)Only statement 2 is correct

c)Both statements are correct

d)Both statements are incorrect

5.If the amount of PCSO/Philippine lotto winnings received by a resident citizen in 2020 did not exceed P10,000, what type of income tax will apply?

a)Final withholding tax on passive income

b)Capital gains tax

c)Basic income tax

d)Exempt