TOPIC INCOME TAX- CORPORATION

1. The maximum tax rate of individual taxpayer starting January 1, 2018 How much is the income tax payable? a. P3,540,000 c. 23,440,000 b. P3,530,000 d. P2.480,000 For Questions 15 and 19 7. PHL Corporation, a domestic corporation in its 3rd year of operation, has the following records of income and expenses during the year: Gross income, net of 1% withholding tax P1,435,500 Expenses 790,600 Rent income, net of 5% withholding tax 136,800 Dividend from domestic corporation 25,000 Royalty, gross of tax 80,000 Interest from bank deposit with PNB, net of 12,000 tax a 30% c. 34% b. 32% d. 35% 2. Improperly accumulated tax is being imposed in the nature a. Penalty to the corporation b. Penalty to the stockholders Incentive to both the corporation and stockholders d Encouragement to pay taxes 3. For purposes of income taxation, which of the following is not considered as a corporation? a. General partnership in trade b. General professional partnership 6 Mutual fund company d. Regional operating headquarters of multinational company 4. Which of the following is taxable based on income from all sources, within and without? a. Domestic Corporations b. Resident Foreign Corporations 6. Non-resident Foreign Corporations d. All of the choices 5. Which of the following does not have the benefit of claiming deductions in computing income tax? a Domestic Corporations b. Resident Foreign Corporations c. Non-resident Foreign Corporations d. All of the choices Unan Inc., a domestic corporation in its 2 year of operation, had the following data on income and expenses during the year 2015 Gross income, Philippines P10,000,000 Business expenses, Philippines 2,000,000 Gross income, China 5,000,000 Business expenses, China 1,500,000 Interest income, Metrobank, Philippines 300,000 Interest income, Shanghai Banking 100,000 Corporation, China Rent income, net of 5% withholding tax 190,000 The income tax payable is - a P241.020 c P260,020 b. P219,320 d. 2238,320 8. The total final taxes is a. P19,000 C. 233,250 b. P21,500 d. P3,000 9. A domestic corporation was registered with the BIR on November 1, 2008. What year would the first MCIT will be imposed on such corporation? a. 2009 c. 2011 b. 2010 d. 2012 10. If the taxpayer is a seller of services, which of the following shall not form part of its cost of services? a. Salaries and supplies b. Employee benefits Depreciation and rental expenses d. Interest expense b. P6,600 d. Zero 2020 P3,000,000 1,500,000 1,200,000 11. The following information were taken from the records of Adobon Mani Inc., a domestic corporation already in its fifth year of operation: Gross profit from sales P3.100.000 Capital gain on sale directly to a buyer 100,000 of shares in a domestic corporation Dividend from: Domestic corporation 20,000 Resident foreign corporation 10,000 Interest on: Bank deposit 20,000 Trade receivables 50,000 Business expenses 2,100,000 Income tax withheld 115,000 Quarterly income tax payments 160,000 Income tax payable prior year (10,000) The income tax payable at the end of the year: a. P318,000 C. P43,000 b. P63,200 d. P33,000 12. Short Time Services Inc., registered with BIR in 2009, has the following data for the year 2014: Gross revenue P1,150,000 Discounts 100,000 Allowances 150,000 Salaries of personnel directly involved 300,000 in rendering service Salaries of administrative personnel 100,000 Fees of consultants directly involved in 50,000 rendering service Rental of equipment used in rendering 70,000 service Rental of office space for use of 50,000 administrative personnel Other operating expenses 420,000 How much was the income tax due and payable? a. P27,000 c. P9,600 13. A domestic corporation, already in its 5th year of operation as of 2018, provided the following data: 2018 2019 Gross Sales P2,040,000 P2,800,000 Sales returns 40,000 100,000 Cost of goods sold 1,000,000 700,000 Business expenses 950,000 2,100,000 The income tax payable for taxable year 20120 was: a. P15,000 c. P60,000 b. P20,000 d. P55,000 14. One of the following is not a ground for exemption from MCIT: a. Prolonged labor dispute b. Force majeure problems 6. Legitimate business reverse d. Lawsuits filed by the company 15. If the gross income from unrelated activity exceeds 50% of the total gross income derived by any private educational institution, the rate shall be 30% based on the entire taxable income. This principle is known as a. Constructive receipt b. Tax benefit rule End result doctrine d. Predominance test 16. Which of the following corporations shall pay a tax equal to thirty percent (30%) of the gross income received during each taxable year from all sources within the Philippines? a. Domestic corporation b. Resident foreign corporation c. Nonresident foreign corporation d. None of the choices ds English (US) Copy to where? -- 17. Teri Yaki Corp, a Japanese Corp. having no business in the Philippines, is engage in ship building. It leases some of its newly constructed ships to Super Fairy Inc., a Philippine Carrier. What income tax rate will apply to the rental payments to the lessor? a. 30% Basic Income Tax b. 25% Final Withholding Tax c. 7.5% Final Withholding Tax d. 4.5% Final Withholding Tax 18. Which of the following income is subject to final tax if received by an individual taxpayer? 1. Share of a partner in the net income of a business partnership II. Cash dividend received by a stockholder from a domestic corporation. III. Winnings in lotto. N. Raffle prizes amounting to P6,000 aland c. lll and IV b. ill and IV d. I and IV 19. In the case of a proprietary educational institution, it shall be taxed as an ordinary domestie corporation if its gross income from unrelated educational activities exceeds a 50% of the entire gross income h 55% of the entire gross income c 55% of the entire net income d. 50% of the entire net income 20. Which of the following is subject to 10% Income tax? a. Taxable income in the Philippines of regional operating headquarters of multinationals; b. Gross income from the Philippines of non-resident owner of vessel chartered by Philippine nationals; c. Tax on branch profit remittances from the Philippines; d. Interest income of offshore banking units derived from currency loans in the Philippines granted to non-residents. 21. Effective in year 2008 and thereafter the application/computation of the minimum corporate income tax is made: a in all four quarters of the year b. In the 4 quarter of the year c. In the 1", 2003 quarters only d. No answer given 22. Which of the following statements regarding minimum corporate income tax (MCIT) is incorrect? a The MCIT is payable even if the corporation's operation resulted in a loss. b. The MCIT is 2% based on the gross income within and outside the Philippines in the case of domestic corporations c. The MCIT is imposed beginning on the fourth taxable year immediately following the year in which the corporation was registered with the BIR d. The Secretary of Finance is authorized to suspend the imposition of MCIT on any corporation for any reason he deems fit