lOMoARcPSD|36507141

Donor's Tax
1.Which of the following constitutes a taxable gift? Creditor's gratuitous
discharge of a debtor's obligation
One day rent free use of another's company
A gratuitous transfer by an incompetent
An agreement to make a future transfer which is not supported by a consideration

2.Which of the following donation is required to be in a public document?

Donation of personal property worth more than P 5,000
Donation of personal property
Donation of real property
Donations required to be in writing

3.For the donation to be valid, acceptance of the donation must be made

During the lifetime of the donor only
During the lifetime of the donee
During the lifetime of the donor and the donee None of the
above

4.The reciprocity clause in the donor's tax law applies to:

Juan dela Cruz, a non-resident citizen
Chrispa, a Korean citizen residing in the Philippines
Mrs. Pedro, a Filipino citizen residing in Malaysia Mr. GI Joe, a
non-resident American

5.When the donee is a stranger, the tax payable by the donor for donation in
2018 shall be: 6% of net gift in excess of P 250,000
30% of net gifts
6% based on net gift
6% based on total gift in excess of 250,000

6.All of the following are subject to donor's tax in case there is a transfer for less
than the adequate and full consideration,except:
Real property classified as capital asset
Personal property
Intangible property
Tangible property

7.When a property is donated, the basis of the donor's tax is the cost of acquisition if
acquired by purchase or the fair market value at acquisition date, whichever is higher the agreed
value by the donor and the donee
The fair market value at the time of donation
Any of the above
8.On June 1, 2018, Pedro, a resident citizen, donated a parcel of land to a relative in
Makati and a real property located in Canada to a friend. In taking a credit for the foreign
donor's tax paid, the credit shall be against the Philippine donor's tax on the
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Donation to a friend
Donation to a relative
Donation to the relative and to a friend None of the
above

9.Which of the following is not a deduction from the gross gift?

Unpaid mortgage on the donated property assumed by the donee
Unpaid real estate tax on donated property assumed by the donee Diminution on the property
donated specifically provided by the donor Unpaid donor's tax on the property assumed by the
donee.

10.When a husband and wife make a donation to their legitimate child on account of
marriage during 2018 taxable year, which of the
following statement is correct?
Each of them is entitled for dowry as a deduction from the gross gift
There can only be deduction for dowry if the donation was made before or one year after the
celebration of marriage
Either of them can waive his/her right to claim dowry as deduction in favor of the other donor such
that one of them may claim a total deduction of P 20,000 None of the above

11.As a general rule, all persons who may contract to dispose of their property may
donate. True False
12.Donor's tax is imposed to all natural and artificial persons True False

13.A donation on which the donor's tax is not paid is a valid donation. True False

14.Minors can be a donor or a donee True False

15.Donation between person guilty of adultery or concubinage are voidable.

True False
16.On February 2018, Mr. and Mrs. Giver donated a conjugal parcel of land to their son
who was getting married within six (6) months after the date of donation. The fair
market value of the property at the time of donation was P 5,000,000. Its fair market
value at the time of marriage was P 5,500,000. The donated property was subject to P
1M mortgage which was not assumed by the donee. How much is the net taxable gift
of Mr. Giver?
P 2,740,000 P 2,500,000
P 2,250,000 P 2,490,000
Solution: 5,000,000/2 = 2,500,000 – 250,000 = 2,250,000

17.In 2018, Mr. Lester made the following donations:

June 1, 2018: To his best friend, Mr. Matin - P 1,500,000 on account of marriage
celebrated on May 1, 2017.
July 10, 2018: To Mr. Barrera, his mentor - a parcel of land worth P 1,800,000 subject
to the condition that Mr. Barrera would assume the mortgage indebtedness of Lester
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in the amount of P 40,000. Sept. 30, 2018: P 1,500,000 dowry to his daughter on
account of her scheduled marriage on December 25, 2018; and another wedding gift
worth P 200,000 on Dec. 31, 2018.
How much is the total net taxable gift for the year?
P 4,710,000 P 4,960,000
P 4,750,000 P 4,790,000
Solution: 1,500,000 + 1,800,000 – 40,000 + 1,500,000 + 200,000 = 4,710,000

18.On February 14, 2018, Clifford donated a property located in Manila and cash as
follows:
a. Land with a FMV of P 680,000: to a legitimate daughter on account of marriage, subject
to a mortgage of P 80,000 assumed by the daughter. b. Cash of P 150,000: To a legitimate
son, on account of marriage.
What is the correct amount of net gifts made?
P 700,000 P 740,000
P 730,000 P 750,000
Solution: 680,000 – 80,000 + 150,000 = 750,000

19.Professor X, a renowed Filipino scientist made the following donations during 2018:
Feb. 29: cash of P 500,000 to Brgy. Malanday
April 1: Car to his brother on account of marriage. The car has a FMV of P 1,000,000 and
is subject to mortgage of P 500,000 to be assumed by his brother. May 31: A land worth P
5,000,000 located in Belgium to his
son.
How much is the donor's tax payable on April 1?
P0 P 300,000
P 15,000 P 315,000
Solution: 1,000 – 500,000 – 250,000 = 250,000 x 6% = 15,000
20.Professor X, a renowed Filipino scientist made the following donations during 2018:
Feb. 29: cash of P 500,000 to Brgy. Malanday
April 1: Car to his brother on account of marriage. The car has a FMV of P 1,000,000 and
is subject to mortgage of P 500,000 to be assumed by his brother. May 31: A land worth
P 5,000,000 located in Belgium to his son.
How much is the donor's tax payable on May 31?
P 300,000 Solution:
P 330,000 April 1, net gift 500,000
May 31, net gift 5,000,000
P 450,000 Total 5,500,000
P 464,000 Exemption (250,000)
Taxable net gift 5,250,000
Donor’s tax 315,000
Tax paid (15,000)
Still due 300,000
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21.ABC Corporation donated P 100,000 to the barangay for the purpose of cementing a
barangay road where its factory is located.
Statement 1: The donation is exempt from donor's tax
Statement 2: The corporation may claim full deduction for income tax purposes.
Statement 1 and 2 are false Statement 1 is false and statement 2 is true Statement 1 is true and statement 2 is
false Statements 1 and 2 are true

22.A person making a donation is required to file a tax return to BIR at the residence of the
donee within 30 days from the date of the donation
The residence of the donor within 30 days from the date of donation
The residence of the donor at the end of the year
The residence of the donee at the end of the month when the donation is made

23.Since a donation to a charitable institution has a deduction without any ceiling. Statement 1: The
net gift will be zero, so that in computing the donor's tax, the donation may be omitted in gross gifts
as it is likewise omitted in the
deductions.
Statement 2: The gross gifts should be reported, and the de duction shall be claimed.
Statement 1 and 2 are false Statement 1 is true and statement 2 is false
Statement 1 is false and statement 2 is true Statements 1 and 2 are true
24.A donor gave the following donation during 2018:
Jan. 24 - Land located in the Philippines valued at P 2M to her uncle subject to the
condition that the latter will pay the donor's tax due and unpaid mortgage amounting
to P 500,000.
Nov. 30 - Building in US valued at P 4,500,000 to her sister. Donor's tax paid in US was P
400,000.
The donor's tax payable on the Jan. 24 donation shall be:
P0 P 90,000
P 75,000 P 120,000
Solution: 2,000,000 - 500,000 = 1,500,000 -250,000 = 1,250,000 x 6% = 75,000

25.Based on the preceding number, donor's tax payable on the Nov. 30 donation
shall be:
P0 P 248,750
Solution:
Prior net gift 1,500,000
Present net gift 4,500,000
Total net gift 6,000,000
Exemption (250,000)
Taxable net gift 5,750,000
Donor’s tax 345,000
Tax paid (75,000)
Tax credit (258,750)
Still due 11,250
P 11,250 P 345,000
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26.For questions 26 - 28:

Limitation:
4,500,000/6,000,000 x 345,000 = 258,750
Mr. and Mrs. de Guzman, resident citizens, made the following donations out of their
conjugal properties:
Date Amount Donee
Mar. 1, 2018 P 500,000 Adel, legitimate daughter
May 1, 2018 P 400,000 Belle, legitimate daughter, on account of
marriage on 6/1/18
July 1, P 200,000 Cindy, legitimate daughter

How much is the donor's tax payable of Mr. de Guzman on his first donation?
P 0 P 30,000 Solution: 500,000/2 – 250,000 = 0 P 15,000 P 60,000

27.How much is the donor's tax of Mrs. de Guzman from the second donation?
P0 P 24,000
P 12,000 P 27,000
Solution: 200,000 + 250,000 = 450,000 – 250,000 = 200,000 x 6% = 12,000
28.How much was the total donor's tax of Mr. and Mrs. de Guzman on all donations
P 36,000 P 65,400
P 33,000 P 66,000
Solution: 1,100,000/2 = 550,000 – 250,000 = 300,000 x 6% = 18,000 x 2 = 36,000

29.Statement 1: When the donee is tax exempt, the donation of a taxable individual is also tax
exempt.
Statement 2: Donor's tax shall be paid within 30 days after the donation is made.
Statement 1 and 2 are false Statement 1 is true and statement 2 is false
Statement 1 is false and statement 2 is true Statement 1 and 2 are true

30.A donation of husband to his wife during the marriage shall be governed by
Donation mortis causa Donation by reason of marriage Donation inter vivos
None of the choices

31.Chris made the following donation during 2020: April:

• To his son Reden who is living in Singapore, a land located also in Singapore valued
at P 500,000 on account of marriage on Feb. 4, 2020.
• To Princess, his daughter, a farm located in Batangas valued at P600,000 with
unpaid mortgage of P 100,000 which Princess assumed.
October:
• To his son Reden, also on account of marriage, shares of stock of a nonresident
foreign corporation valued at P 400,000.
• To City of Makati, of land located in Makati valued at P 1,000,000. Theland will be
used for school site.
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All properties donated come from the exclusive properties of Chris.

How much is the tax due on April donation?
P 51,000 P 45,000 P
66,000 P 60,000
Solution: 500,000 + 600,000 – 100,000 = 1,000,000 – 250,000 = 750,000 x 6% = 45,000
How much is the donor’s tax payable on October donation?
P 75,000 P 9,000
P 24,000 P 15,000
Solution: 400,000 + 1,000,000 = 1,400,000 – 250,000 = 1,150,000 x 6% = 69,000 – 45,000 = 24,000

33.Chris donated his rest house in Pangasinan worth P 1,500,000 to his wife during the marriage. The
said property has unpaid mortgage of P100,000. How much
is the donor’s tax to be paid by Chris?
P 75,000 P0
P 90,000 P 84,000
Donation between husband and wife during the marriage shall be governed by testamentary
succession.
34.Chris sold his vacant lot located in Bulacan to his friend on Feb. 5, 2020. The selling
price of the property is P 3,000,000 with FMV at the time of sale of P 3,200,000 and P
3,500,000 at the time of death of Chris. Chris acquired the property 5 years ago
amounted to P 1,500,000. How much is the donor’s tax of Chris?
P 15,000 P 192,000 P
195,000 Zero
No donor’s tax because this is subject to CGT.

35.Chris sold his vacant lot located in Bulacan to his friend on Feb. 5, 2020. The selling
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price of the property is P 3,000,000 with FMV at the time of sale of P 3,200,000 and P
3,500,000 at the time of death of Chris. Chris acquired the property 5 years ago
amounted to P 1,500,000. How much is the applicable tax of Chris?
P 15,000 P 192,000
P 195,000 Zero
Solution: 3,200,000 x 6% = 192,000

36.Chris and Christina, husband and wife agreed to donate land located in Japan to
their beloved son who graduated cumlaude from Harvard University on March 20,
2020, with value of 5,000,000. The
Deed of donation (signed and accepted by the son) was executed on Feb. 25,2020 with
a value of P 5,500,000. How much is the donor’s tax of Mr. Chris?
P 135,000 P 150,000 P
315,000 P 285,000
Solution: 5,500,000/2 = 2,750,000 – 250,000 = 2,500,000 x 6% = 150,000

37.Chris had a lot of properties but no family to lean on. He felt lonely and sad, so he
decided to donate almost of his properties to all his close friends and relatives. One
night, Chris was drunk and while driving he met an accident. In the hospital, he met a
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person who introduced himself as his son from a woman he met somewhere in
Batangas. Can the property donated by Chris be returned to him? Which of the
following statement is false?
Chris can revoke the property within 4 years from the time he discovered that he has son.
Chris cannot donate when no properties left for his living.
Chris cannot revoke the donation because it was already donated.
No answer in the choices.
38.Chris donated the following properties:
Land, located in US P 1,500,000, tax paid in US P 90,000 Land, located in
the Philippines P 3,500,000
The land in the Philippines, part of it was donated to government for public
purposes. The amount of donation is P 500,000. How much is the donor’s tax
payable of Chris?
P 199,500 P 165,000
P 170,000 P 200,000
Land, US 1,500,000
Land Philippines 3,000,000
Exemption (250,000)
Taxable net gift 4,250,000
Donor’s tax 255,000
Tax credit 85,000
Still due 170,000
Limitation: 1.5M/4.5M x 255,000 = 85,000

39.Mr. Chris donated his land worth P 1M to his best friend through private
instrument. What is the status of donation?
Valid Void
Voidable Unenforceable

40.On February 5, 2020, Chris wrote a letter to Manuel donating his laptop worth P 75,000. The
letter was received by Manuel on February 10, 2020 who
immediately accepted the donation. The letter of acceptance was received by Chris on February
14, 2020. The donor’s tax was paid until February 25, 2020. The donation was perfected on:
February 5 February 14
February 10 February 25
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1. Which of the following donors is taxable only on c. Exemptions and deductions cannot be
gifts of property within the Philippines? claimed where the 30% tax rate on stranger
a. Resident citizen donor is applicable
b. Non-resident citizen donor d. None of the foregoing
c. Resident alien donor 10. Which of the following statements in relation
d. Non-resident alien donor to donor’s tax is correct?
2. The reciprocity rule in donor’s tax is applicable a. Spouses who donate their common property
only to nonresident alien donors who donate: shall file only one donor’s tax return for the said
a. Tangible personal property within the donation.
Philippines b. The unpaid mortgage on the property
b. Intangible personal property within the donated that is to be assumed by the
Philippines donee is deductible from the fair market
c. Tangible real property within the Philippines value of the gift at the time of the
d. All of the foregoing donation.
3. Which of the following transactions is deemed a c. In the sale of real property classified as a
taxable gift? capital asset for less than an adequate and
a. Condonation or remission of a debt full consideration, the deficiency shall be deemed
b. Sale of residential house and lot for less than a gift subject to donor’s tax.
an adequate and full consideration in money d. A wedding gift that is given to a
or money’s “stranger” can avail of the P10,000
worth exemption of gifts given on account of
c. Both (a) and (b) marriage.
d. Neither (a) nor (b)
4. Determine which of the following gifts given by a 11. Which of the following transfers is subject to
parent to hischild is entitled to the P10,000 donor’s tax?
exemption? a. Residential lot with market value of
a. Gift given on account of the child’s 18th P1,000,000 was sold for only P600,000
birthday b. Listed shares of stock with market value of
b. Gift given on account of the child’s college P500,000 were sold for only P250,000
graduation c. Company vehicle with book value of P700,000
c. Gift given on account of the child’s was sold by way of bona fide sale for only
successful recovery from cancer P600,000
d. None of the foregoing d. None of the foregoing.

5. One of the following gifts given on account of 12. X donated a motorbike valued at P100,000 to Y,
marriage is not entitled to the P10,000 son of X’s first cousin. What is the tax
exemption: consequence of the foregoing donation?
a. Gift given before the celebration of the a. X is liable to pay donor’s tax in the amount of
marriage P30,000
b. Gift given exactly one year after the b. X is liable to pay donor’s tax in the amount of
celebration of the marriage P2,000 per the graduated donor’s tax rates
c. Gift given to an adulterous child c. X is liable to pay capital gains tax in the
d. Gift given to a naturally adopted child amount of P6,000
6. Who among the following donors is not entitled to d. X is not liable to pay any tax on the transfer
claim the P10,000 exemption on account of
marriage:
13. S sold his residential house and lot to his best
a. Resident alien donor
friend for P4,000,000. At the time of the sale, the
b. Non-resident alien donor
property had a fair market value of P5,000,000.
c. Both (a) and (b)
What is the tax consequence of this foregoing sale
d. Neither (a) nor (b) for insufficient consideration?
7. Determine which of the following exempt gifts a. S shall be liable to pay donor’s tax in the
shall be included as part of the gross gifts in the amount of
donor’s tax return:
P300,000
a. Gift given on account of a child’s marriage
b. S shall be liable to pay donor’s tax in the
b. Gift given to the government amount of
c. Gift given to educational, religious, cultural P1,500,000
or social welfare institutions
c. S shall be liable to pay capital gains tax in the
d. All of the foregoing amount of
8. Which of the following items may be deducted P240,000
from the gross gifts? d. S shall be liable to pay capital gains tax in the
a. amount of mortgage assumed by the donee amount of P300,000
b. gifts declared as exempt by law
c. Both (a) and (b) 14. Gifts are to be computed on a cumulative basis
d. Neither (a) nor (b) provided the said gifts are given during the same:
9. Which of the following statements relative to a. calendar year
donor’s tax is false? b. fiscal year
a. The spouses shall file separate donor’s tax c. calendar quarter
returns where the thing donated is common d. calendar month
property
b. Each parent shall be entitled to the P10,000 15. In applying the graduated donor’s tax rates, no
exemption on account of marriage of a child donor’s tax liability shall arise where the taxable
net gifts amount to:
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a. P100,000 marriage of X and Y. What is the legal

b. P200,000 consequence of for purposes of donor’s
c. Both (a) and (b) tax?
d. Neither (a) nor (b) a. H and W shall each report one-half (1/2) of the
value of the ring as gross gift, and claim
16. X (unmarried) made the following donations to his P10,000 exemption each on account of
spurious son on account of the latter’s marriage marriage.
on December 1, 200A: b. H shall report the entire value of the ring as
on July 20, 200A P50,000 on December 1, gross gift, and claim P10,000 exemption on
200A 50,000 account of marriage.
on January 2, 200B 50,000 c. W shall report the entire value of the ring as
Which of the following statements is correct? gross gift, and claim P10,000 exemption on
a. No gift tax is payable on the 3 gifts. account of marriage.
b. Gift taxes are payable on the 3 gifts. d. None of the foregoing.
c. Gift taxes are payable on the 2nd and 3rd gifts. 22. Assume the same facts above, except that the
d. Gift tax is payable on the 3rd gift. diamond ring was donated to H by a wealthy
17. X (unmarried) made the following donations to his relative at a time when H and W were not yet
legally adopted son on account of the latter’s married. What is the legal consequence of the
marriage on June 1, 200A: on January 10, 200A donation for purposes of donor’s tax?
P50,000 on June 1, 200A 60,000 on a. H and W shall each report one-half (1/2) of the
December 0 1, 200A 50,000 value of the ring as gross gift, and claim
P10,000 exemption each on account of
Which gifts or gifts shall be liable to pay donor’s marriage.
tax? b. H shall report the entire value of the ring as
a. All the gross gift, and claim P10,000 exemption on
3 gifts B. account of marriage.
2nd gift c. W shall report the entire value of the ring as
c. 3rd gift gross gift, and claim P10,000 exemption on
d. None of the gifts account of marriage.
d. None of the foregoing.
18. A gift that is given to one of the following donees
23 Husband (H) and wife (W) gave a lot as wedding
shall be subject to the 30% gift tax rate on gift to X (widowed mother of H). This lot was donated
strangers: to W when she bore her first child with H a year after
a. Grandchild their marriage. The current market value of the lot
b. Aunt when it was donated to X was P500,000. Which of
c. Sister-in-law the following statements is correct?
d. Brother a. W shall be liable for gift tax based on the 30%
19. A gift that is given to one of the following donees tax rate on stranger on her net gift of
shall be subject to the graduated donor’s tax P500,000.
rates? b. W shall be liable for gift tax based on the
a. Naturally adopted child graduated donor’s tax rates on her net gift of
b. Child with a mistress P500,000.
c. Sister-in-law c. H shall be liable for gift tax based on the
d. Child of “first cousin” graduated donor’s tax rates on his net gift of
P500,000.
20. Husband (H) and wife (W) gave a used car as d. H shall be liable for gift tax based on the
birthday gift to X,a legitimate child of W from her graduated donor’s tax rates on his net gift of
former marriage to Z who is now deceased. This P250,000, and W shall be liable for gift tax
vehicle, valued at P100,000, was inherited by W based on the 30% tax rate on stranger on her
from her parents during her marriage to Z. Who net gift of P250,000.
shall be liable to pay donor’s tax on the foregoing
gift? 24. The donor’s tax return, as well as the donor’s
a. H and W tax due thereon, shall be filed and paid not later
than:
b. H
a. 1 month from the date of the gift
c. W
b. 30 days from the date of the gift
d. Neither H nor W
by judicial c. 3 months from the date of the gift
d. 90 days from the date of the gift
21. Husband (H) and wife (W) are recently separated
arded by the 25. X is a Chinese national who is residing in
decree. Custody of their 15-year old child, X, was aw China. He donated his Philippine shares of stock to
ed Y. H his Chinese friend, Y, who is residing in the
and W Philippines. Assume Chinese tax law imposes gift tax
court to W. When X turned 18 years of age, she marri on all real and personal properties donated by
present. Chinese citizens, whether located in China or
gave the newly-wed couple a diamond ring as elsewhere, but does not allow any tax credit for gift
wedding taxes paid in foreign countries. X paid gift taxes to
bration of both the Chinese and Philippine governments. Which
the of the following statements is correct?
This ring was purchased by H a week before the cele a. X may claim a tax credit for the China gift tax
the because he also paid Philippine donor’s tax.
donation b. X may claim a tax credit for the China gift tax
because of the burdensome effect of
 lOMoARcPSD|36507141

“international double taxation” on the same

property.
c. X cannot claim a tax credit for the China gift
tax because of the absence of reciprocity.
d. X cannot claim a tax credit for the China gift
tax because a non-resident alien is not allowed
to claim a tax credit for foreign gift taxes
under Philippine tax law.
 lOMoARcPSD|36507141

1. Excise tax shall apply to certain goods intended for

Domestic Consumption Foreign Consumption
a. Yes Yes
b. Yes No
c. No Yes
d. No No

2. Excise tax shall apply to certain goods that are

Locally Produced Imported
a. Yes Yes
b. Yes No
c. No Yes
d. No No

3. Excise that are imposed based on weight or volume capacity or other physical unit of
measurement
a. Specific tax
b. Ad Valorem tax
c. Quantitative tax
d. Metrical tax

4. The excise tax on certain excisable goods is a tax on

a. Person – the owner or producer of certain goods
b. Property – the goods produced or manufactured
c. Privilege – the right to enter into a business of producing or importing certain
articles
d. Privilege – the right to transport certain goods

5. Taxes imposed on substance known to harm health

a. Sin tax
b. Sumptuary tax
c. Green tax
d. Vanity tax

6. Taxes imposed to restrain luxury

a. Sin tax
b. Sumptuary tax
c. Green tax
d. Vanity tax

7. Which could not be considered a green tax?

a. Tax imposed upon mineral products.
b. Tax imposed upon petroleum products.
c. Tax imposed upon jewelry.
d. Tax imposed upon quarry materials.

8. Which could not be considered a vanity tax.

a. Tax imposed upon jewelry
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b. Tax imposed upon champagne.

c. Tax imposed upon automobiles.
d. Tax imposed upon cosmetic surgery.
9. Sin taxes is not imposed on
a. Wines
b. Cigars
c. Cosmetic surgery
d. Sweetened beverages

10. The excise tax on certain goods or services is not a

a. Direct tax
b. National tax
c. Indirect tax
d. Tax on domestic consumption

11. Which of the following does not properly describe excise tax on certain goods or
services?
a. Sin tax
b. Vanity tax
c. Environmental tax
d. Thumb tax

12. Excise tax on locally produced excisable goods shall be paid

a. Within 15 days from the removal of the goods
b. Upon removal of the goods
c. Before the removal of the goods
d. Upon sales of the goods

13. The tax due on non-metallic mineral or mineral products or quarry resources, shall be
due and payable
a. Within 15 days from the removal of the goods
b. Upon removal of the goods
c. Before the removal of the goods
d. Upon sale of the goods

14. The excise tax on locally produced or extracted metallic mineral or mineral products,
a. Within 15 days from the removal of the goods
b. Upon removal of the goods
c. Before the removal of the goods
d. Upon the sale of the goods

15. Whether metallic or non-metallic mineral or mineral products, the excise tax on
imported goods shall be paid
a. Within 15 days from importation
b. Within 15 days after removal of the goods from Customs
c. Before the removal of the goods from Customs
d. Upon the sale of the goods from Customs territory
16. Filing of an excess tax bond is required on
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a. Excise tax on non-metallic minerals and mineral products

b. Excise tax on metallic minerals and mineral products
c. Excise tax on mineral products
d. The person who is in possession of the same

17. In the case of indigenous, petroleum natural gas or liquified natural gas, the excise
thereon shall be paid by the a. Seller of the goods
b. First buyer of the goods
c. Producer of the goods
d. The person who is in possession of the same

18. When domestic products that are removed from their place of production without
payment of the excise tax, the tax shall be paid by the a. Last seller
b. Owner having possession thereof
c. Buyer and seller equally
d. Producer of the goods

19. Who is required to pay the excise tax on excisable goods?

a. Producer
b. Possessor of excisable goods with unpaid excise tax
c. Importer
d. Any of these

20. Which is the basis in goods subject to ad valorem tax?

a. Gross selling price at the point of production
b. Gross selling price of the resellers of the goods
c. Production cost plus a minimum of 10% margin
d. Gross selling price at the place of production or in other places if sold by th eowner
in other places

1. Who is the taxpayer on locally produced excisable goods?

a. Importer
b. Producer
c. Wholesaler
d. Consumer

2. Which statement is correct?

a. Excise tax normally don’t have a deadline of payment
b. Excise tax is payable on top of value added tax but not of percentage tax.
c. Business for subsistence are exempt from excise tax.
d. Excise tax are imposed at the point of consumption.
3. Which is not subject to excise tax?
a. Quarry resources
b. Precious metals
c. Prostitution
d. Sweetened beverages
4. Which of the following is not considered a taxable sin products?
a. Liquors
 lOMoARcPSD|36507141

b. Marijuana
c. Tobacco leaves
d. Sweetened beverages

5. Statement 1: Excise tax rates are relatively more burdensome compared to other
business taxes?
Statement 2: Excise tax rates covers a small range products or services. Which is true?
a. Both statements are correct
b. Both statements are false
c. Only statement 1
d. Only statement 2

6. Statement 1: Excise tax, customs duties and the VAT on importation is similarly
collectible at the point of importation.
Statement 2: Excise tax and the VAT on importation are similarly imposed upon landed
costs? Which is false?
a. Neither statements
b. Both statements
c. Statement 1
d. Statement 2
7. Statement 1: The regulatory aspect of specific taxes on certain sin products will best
preserved when their tax rates adjust for inflation.
Statement 2: There is no need to adjust ad valorem taxes since they ride with inflation.
Which is true?
a. Statement 1
b. Statement 2
c. Both statement
d. Neither statement

8. Which is subject to purely specific tax?

a. Cigar
b. Distilled spirits
c. Cigarettes
d. Yacht

9. Which statement is false?

a. Cigarettes are subject to specific tax
b. All excisable petroleum products are subject to specific taxes
c. All excisable jewelries are subject to ad valorem tax
d. All excisable automobiles are subject to specific tax

10. Which of the following mineral products is subject to specific tax?

a. Coal and coke
b. Copper and gold
c. Indigenous minerals
d. Granite
11. HKG, Inc. produced and withdrawn 1,000,000 units of excisable goods X which is
subject to P1/unit excise tax. HKG, Inc. uses goods X to manufacture Product Y which is
 lOMoARcPSD|36507141

sold domestically and abroad, 50,000 units of Product Y was produced out of which
30,000 units were exported. Which is incorrect?
a. Excise tax is payable only on the 400,000 units of goods X.
b. HKG, Inc. shall pay P1,000,000 in excise tax
c. HKG, Inc shall claim tax credit or refund for P600,000
d. None of these
12. No excise tax credit or refund is allowed to the export of which of the following
commodities?
a. Mineral products
b. Coal
c. Coke
d. Petroleum products
13. Which of the following requires a payment of bond?
a. Removal of wines and distilled spirits for tobacco leaf treatment
b. Removal of spirits for rectification
c. Removal of fermented liquor to bonded warehouses
d. All of these

14. The excise tax on excisable goods exported is claimable by refund or tax credit. Which
is an exception to this rule? a. Sin products
b. Non-essential goods
c. Mineral products
d. Petroleum products

15. Who is ultimately liable for the rectification of spirits?

a. Distiller
b. Rectifier
c. Both distiller and rectifier
d. Transporter
16. Which is subject to payment of excise taxes?
a. Removal of damaged liquor
b. Removal of tobacco products entirely unfit for chewing or smoking
c. Removal of petroleum coke to be sued as fuels of power plants
d. Removal of bunker fuel for the production of excisable products
17. Who will pay excise taxes?
a. Manufacturer of denatured alcohol
b. Manufacturer of vinegar
c. Manufacturer of plastic
d. Hospital performing cosmetic surgery

18. What is the threshold alcohol content that when exceeded shall reclassify wines into
distilled spirits?
a. 10%
b. 14%
c. 25%
d. 30%
 lOMoARcPSD|36507141

19. The excise tax on locally produced or manufactured products that are exported shall
be claimed by the producer as a. Tax refund
b. Tax credit
c. Expense
d. A and B

20. The tax refund or credit on exported products shall not be allowed on
a. All metallic products
b. All mineral products
c. Cole and coke
d. B and C

21. A manufactured cigarette and sold the same to B. B exported the goods abroad toa
foreign retailer, C. Who is entitled to claim refund for the excise tax?
a. A
b. B
c. C
d. None of these

22. Which is not a sin product?

a. Chewing tobacco
b. Distilled spirits
c. Cigarettes
d. Jewelry

23. Which of the following products is subject to both ad valorem and specific tax?a.
Distilled spirits
b. Cigars and cigarettes
c. Automobiles
d. Both A and B

24. Which of the following agricultural products is subject to excise tax?

a. Tobacco rolls
b. Ground coffee
c. Refined sugar
d. All of the above
25. The excise tax on minerals does not apply to?
a. Diamond and sapphire
b. Gold, chromite, copper, silver or iron
c. Natural gas
d. Indigenous petroleum

26. Indigenous petroleum does not include.

a. Mineral oil and gas
b. Hydrocarbon gas
c. Bitumen or crude asphalt
d. Coal, peat and bituminous shale or stratified deposits
27. The term quarry resources does not include?
 lOMoARcPSD|36507141

a. Marble and volcanic cinders

b. Granite and basalt
c. Rock phosphate
d. Metallic rocks or mineralized rocks

28. These refers to things produced and prepared in marketable state by simple treatment
processes of washing or drying without undergoing any chemical change or process or
manufacturing by the lessee, concessionaire or owner a. Minerals
b. Mineral products
c. Quarry resources
d. Metallic minerals

29. Which statement is false?

a. Manufacturers and importers are subject to ad valorem tax on their net selling
price, net of excise tax and ad valorem tax
b. To be considered hybrid vehicles, the vehicle must be able to run using solely
electric motor
c. Automobiles used exclusively within Freeport zone shall be exempt from excise tax
d. Buses, trucks, cargo vans, and jeepneys shall be considered as automobiles for
purposes of the excise tax

30. Which is false?

a. The tax on non-essential goods is 20% of wholesale value for manufacturers
b. The tax on non-essential goods is 20% of landed cost on importers
c. The 20% tax on jewelry applies to genuine precious metal jewelry including
imitations such as platings and alloys of such metals.
d. Only vessels intended for pleasure such as yacht are subject to tax to the exclusion
of cargo or passenger vessels.

31. Which is subject to the 20% jewelry tax?

a. Dental gold alloys or gold tooth fillings
b. Silver plated wares
c. Gold plated frames or mountings for eyeglasses
d. Pearls

32. Which of the following services is subject to excise tax?

a. Dermal fillers
b. Invasive cosmetic procedures and surgeries
c. Acupuncture rejuvenation therapy
d. Collage induction therapy

33. Petroleum products sold to the following shall be subject to excise tax.
a. Government agencies and GOCCs
b. Economic zones
c. International carriers
d. Asian Development Bank
34. Mosquada Company has three cigar processing plants located in Bauang, La Union,
Baguio City and Dagupan City, Pangasinan. Mosquada’s head office is in Baguio City.
Which is true with respect to filing of excise tax?
 lOMoARcPSD|36507141

a. Only one consolidated return needs to be filed in Baguio City

b. One return shall be filed for each factory or place of production
c. Mosquada can choose to file the return at any of the RDOs having location of the
plants.
d. Mosquada shall file the return where it warehouses its production.

1. _______ is issued if after review and evaluation by the Commissioner or his duly
authorized representative, as the case may be, it is determined that there exists
sufficient basis to assess the taxpayer for any deficiency tax or taxes
A. Preliminary assessment notice (PAN) B. Final assessment notice (FAN)
C. Final letter of demand (FLD)
D. Final decision on a disputed assessment (FDDA)

2. A written notice and demand by the BIR on the taxpayer for the settlement of a due tax
liability that is there definitely set and fixed
A. Audit engagement letter
B. Forfeiture
C. Assessment
D. Institution of criminal action

3. Which court has jurisdiction to determine if the warrant of distraint and levy issued by
the BIR is valid and rule if the waiver of Statute of Limitations was validly affected? A.
City Courts
B. Regional Trial Court
C. Court of Tax Appeals D. Court of Appeals
4. Preliminary assessment notice is not required in the following cases, except: A. Tax
deficiency is due to mathematical error B. Tax deficiency is due to unpaid VAT
C. Tax deficiency is due to unpaid excise taxes D.
Tax deficiency is due to withholding tax
5. Dory seasonably filed a protest and submitted supporting documents with the BIR.
Within how many days shall the former await the decision of latter before she
assumes that the protest has been indirectly denied?
A. 90 days B. 60 days
C. 180 days
D. 200 days

6. France Corp. received a notice of assessment and a letter from the BIR demanding
the payment of P3 million pesos in deficiency income taxes for the taxable 2018. The
financial statements of the company show that it has been suffering financial
reverses. Its asset position shows that it could pay only P500,000.00 which it offered
as a compromise to the BIR. Which among the following may the BIR require to
enable it to enter into a compromise with Frances?
A. Frances must show it has faithfully paid taxes before.
B. Frances must promise to pay its delinquency when financially able.
C. Frances must waive its right to the secrecy of its bank deposits. D. Frances must
immediately deposit the P500,000 with the BIR.
 lOMoARcPSD|36507141

7. All criminal violations may be compromised except:

I. Those already file in court; II.
Those involving fraud

A. Only statement 1 is correct

B. Only statement 2 is
correct
C. Both statements are correct
D. Both statements are incorrect

8. Minimum amounts to Compromise:

Statement 1: For cases of financial incapacity, a minimum compromise rate equivalent to
ten percent of the basic assessed tax.
Statement 2: For other cases, a minimum compromise rate equivalent to forty percent of
the basic assessed tax.
A. Only statement 1 is correct
B. Only statement 2 is
correct
C. Both statements are correct
D. Both statements are incorrect

9. Bianca received a final assessment notice (FAN) from the BIR on October 30, 2019.
She submitted his protest and the supporting documents within the time prescribed
by the Law. After 180 days, the subsequent step/s available to her shall be: I.
Elevate the case on appeal to the CTA, alleging inaction of the CIR, within 30 days
from the 180th day since she submitted the supporting documents on her protest. II.
Wait for the decision of the Commissioner of Internal Revenue (CIR) and if adverse,
appeal the case before the CTA within thirty days.
A. I only B. II only
C. I and II D.
I or II

10. Nelinda filed her 2018 Income Tax Return (ITR) on April 10, 2019. On June 20,2019,
she filed an amended return which is substantially different from the original
return. The last day to release, mail or send an assessment is
A. April 10, 2022 B. April 18,
2022
C. June 20, 2022
D. June 20, 2024
11. A contract whereby the taxpayer and the government by reciprocal concessions
avoid a litigation or put an end to one already commenced.
A. Confiscation B. Compromise
C. Suspension
D. Distraint

12. A civil penalty of 50% of the basic tax is imposed in case of:
 lOMoARcPSD|36507141

A. Failure to file the return on

time
B. Filing the return with
unauthorized revenue officer
C. Willful neglect to file the
return on time
D. Failure to pay the deficiency
tax within the time
prescribed for payment

13. The last day for the taxpayer to claim refund if the tax was paid in installment is A.
Two (2) years from the date of first installment payment B. Two (2) years from the
date of final payment
C. Five (5) years from the date of first installment payment
D. Five (5) years from the date of second installment payment

14. From the date of payment, claim for refund of taxes erroneously or illegally received
or penalties imposed without authority must be filed within:
A. 2 years B. 3 years
C. 5 years
D. 7 years

15. Where any national internal revenue tax alleged to have been erroneously or
illegallycollected by the BIR, the taxpayer should first:
A. File a claim for refund or
credit with the CIR B. File an
action for refund with the
Mayor
C. File an action for refund with the CTA
D. File a claim for refund or credit with the Supreme Court

16. Which of the following is correct?

A. The taxpayer should file a protest, otherwise, the assessment becomes final and
can no longer be questioned in court.
B. The taxpayer may file a protest anytime before the BIR collects the tax. C. The
assessment should be made by the BIR within five years from the filing of the return
D. The assessment shall include only the tax proper.

17. The power to decide disputed assessment, refunds of internal revenue taxes, fees
orother charges, penalties imposed in relation thereto, or other matters arising under
the
Tax Code or other laws administered by the BIR is vested with
A. The Secretary of Finance
B. The Court of Tax Appeals
C. The Commissioner of the BIR
D. The Regular Courts
 lOMoARcPSD|36507141

18. It is the official action of an administrative officer in determining the amount of tax due
from a taxpayer, or it may be a notice of the effect that the amount stated therein is
due from the taxpayer with a demand for payment of the tax or deficiency stated
therein. A. Tax investigation
B. Tax assessment
C. Tax audit
D. Tax mapping

19. Which of the following is not a remedy of the government in tax collection?
A. Protest
B. Compromise
C. Tax lien
D. Forfeiture

20. Date assessment was received March 8, 2022 Date petition for reinvestigation was
filed with the BIR March 28, 2022 Date of filing of documents to support the petition
May 8, 2022 No decision on the protest is received as of October 30, 2022 The last
day to appeal to the CTA is?
A. April 4, 2022
B. December 4, 2022
C. April 8, 2022
D. December 8, 2022

21. The seizure by the government of personal property to enforce payment of taxes
followed by a public sale, if taxes were not voluntarily paid is called
A. Distraint
B. Levy
C. Forfeiture D. Lien

22. A warrant of distraint may be issued against the taxpayer owing delinquent taxes on
his
A. Real Property
B. Personal Property
C. Bank Deposits
D. Property under custodia legis

23. The following are coercive means in the collection of taxes by the BIR, except one A.
Distraint and levy
B. Seizure of goods on which government has claim for unpaid taxes
C. Enforcement of tax lien
D. Compromise
24. The following are remedies available to the government to collect taxes, except? A.
Distraint and levy
B. Inquiring into bank deposits accounts of taxpayers
C. Entering into compromise of tax cases
D. Enforce forfeiture of property
 lOMoARcPSD|36507141

25. A warrant of garnishment may be issued against the taxpayer owing delinquent
taxeson his
A. Real Property
B. Personal Property
C. Bank Deposits
D. Property under custodia legis

26. Which statement is wrong? The surcharge of 25% is imposedif A. A tax return was
not filed within the time prescribed by law B. A tax was not paid within the time
prescribed by law
C. A tax return was not filed within the time prescribed by law and at the same time
the tax was not paid within the time prescribed by law
D. None of these

27. The following are administrative remedies available to a taxpayer in connection with
collection of taxes, except one
A. Filing of claim for tax refund or credit
B. Filing of petition for reconsideration or reinvestigation
C. Filing for criminal complaints against erring BIR officials or employees
D. Entering into compromise

28. As a rule, within what period must a taxpayer elevate to the Court of Tax Appeals a
denial of his application for refund of income tax overpayment?
A. Within 30 days from receipt of the Commissioner's denial of his application for
refund.
B. Within 30 days of receipt of the denial which must not exceed 2 years from payment
of income tax.
C. Within 2 years from payment of the income taxes sought to be refunded.
D. Within 30 days from receipt of the denial or within two years from payment.

29. Which among the following circumstances negates the prima facie presumption
ofcorrectness of a BIR assessment?
A. The BIR assessment was seasonably protested within 30 days from receipt. B. No preliminary
assessment notice was issued prior to the assessment notice. C.
Proof that the assessment is utterly without foundation, arbitrary, and capricious. D.
The BIR did not include a formal letter of demand to pay the alleged deficiency.
 lOMoARcPSD|36507141

30. What is the effect on the tax liability of a taxpayer who does not protest
anassessment for deficiency taxes?
A. The taxpayer may appeal his liability to the CTA since the assessment is a
final decision of the Commissioner on the matter
B. The BIR could already enforce the collection of the taxpayer's liability if it could
secure authority from the CTA.
C. The taxpayer's liability becomes fixed and subject to collection as the
assessment becomes final and collectible.
D. The taxpayer's liability remains suspended for 180 days from the expiration of
the period to protest