Final Exam

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Final Exam: VAT and Taxation Essentials

Test your knowledge on vital aspects of VAT and taxation with our comprehensive quiz! This quiz is designed for students, educators, and professionals looking to deepen their understanding of tax regulations and exemptions.

What you'll find in this quiz:

42 thoughtfully crafted questions
Multiple-choice format to challenge your knowledge
Instant feedback on your answers

42 Questions10 MinutesCreated by CalculatingEagle47

A feature of a zero-rated VAT transaction is:

Input VAT may be creditable

The transaction is no longer recorded since it’s zero-rated

It results to an output tax

Input VAT may not be creditable

Persons liable for VAT:

In the course of trade or business would have gross annual receipts/sales of more than 3M Pesos

In the course of trade or business would have gross annual receipts/sales of at least 3M Pesos

Any person engaged in trade or business of selling goods or services outside the country

In the course of trade or business would have net annual receipts/sales of 3M Pesos

Vat exempt transactions:

Does not generate both input and output VAT

Do not allow any tax credit of VAT nor are subjected to output VAT

Do not allow for the credit of input VAT but allows recognition of an output VAT

Generates an output VAT but no input VAT

Characteristics of a Tax Assessment from the BIR, except:

Written

Contains the legal basis and the corresponding regulation violated, if any

Contains the factual basis of the assessment

Does not serve as a basis for the application of surcharges and fees

Common examples of taxable passive income, except:

Royalty Income

Dividend Income of Resident Foreign Corporations from Domestic Corporations

Dividend Income of Non-Resident Citizen from Domestic Corporations

Interest income on bank deposits

An example of a VAT exempt transaction:

Export Sale of goods by a VAT-Exporter Entity

Sale of specialty feeds for cock fighting

Sale of adobong manok by Antok’s Chicken

Services rendered by an employee for an employer

Injunctions are generally not allowed but may be granted by the Court of Appeals

True

False

Steps in Taxpayer’s Remedies, except:

Filing of a Return

Filing of a Protest after the receipts of a Final Assessment Notice

Appeal to the Court of Appeals en banc

Filing of a Reply from receipt of a Preliminary Assessment Notice

A taxpayer may apply for the non-payment of the tax due through a valid compromise

True

False

Shifting of the tax liability is the main component of indirect taxes.

True

False

Rentals for commercial use are subject to VAT regardless of the amount of monthly rental fees

True

False

Theoretical Justice requires the application of the rules of the court in mediating tax disputes

True

False

With MCIT, Optional Standard Deduction of 40% of Gross Income is no longer considered

True

False

Fiscal Adequacy refers to the capacity of the State to cover its expenses through funds from investors

True

False

The amount of MCIT credit is equal to the difference between the MCIT and the NCIT in years MCIT is payable

True

False

Value Added Tax is a percentage tax, indirect tax, a tax on consumption, and a privilege tax

True

False

If a return is filed before its deadline, the number of days filed in advanced are considered creditable days

True

False

The amount of MCIT credits may be used to reduce the amount of the supposed NCIT payable to zero

True

False

If the monthly rental of residential units are more than 15,000, these shall be considered VAT transactions

True

False

A return filed after the due date shall earn interest but may be reduced by the number of creditable advanced-submission days

True

False

Under the law, only the Commissioner has the capacity to conduct the examination of a taxpayer’s records

True

False

The acts of the government and its authorized agents cannot be presumed to be correct

True

False

Assessments by the State can be made even before the filing of the tax return

True

False

The MCIT is applicable starting on the fourth taxable year of the corporation’s existence

True

False

When in doubt, tax exemptions are generally construed in favor of the taxpayer.

True

False

A preliminary assessment notice is not required in cases of mathematical errors

True

False

The power of Taxation, Eminent Domain, and Police Power all rest upon necessity because there can be no effective government without them

True

False

Value Added Tax is a percentage tax, indirect tax, a tax on consumption, and a privilege tax

True

False

If the monthly rental of residential units are more than 15,000, these shall be considered VAT transactions

True

False

Remedies given to the Government, except:

Levy

Reinvestigation

Distraint

Forfeiture

For regular returns, the Government has three years to assess the taxpayer and five years to collect, from the the time of filing the return

True

False

The Commissioner may delegate its authority on the following, except:

Issue Rulings

Compromise/Abate Taxes

Assign/re-assign officers

Issue Revenue Regulations

Not involved in dispute resolution of tax remedies:

Court of Appeals

Trial Court

Supreme Court

Court of Tax Appeals

Which is not an attribute of taxation?

Levied on persons or property

Enforced contribution

Payable in money or assets

Proportionate in character

________ means that the system of tax should consider the taxpayer's ability to pay.

For Fraudulent Returns, the government has 10 years from the time of discovery within which to conduct a formal assessment of a taxpayer.

True

False

Which is not a principle of a sound tax system?

Fiscal Adequacy

Equality and Uniformity

Administrative Feasibility

Theoretical Justice

_______ means that the system of tax should make sure that the Government will always get enough funds to pay for its expenses

The Commissioner of Internal Revenue, with all 7 Deputies and respective field officers, such as RO's and RDO's comprise the basic structure of the BIR

True

False

For Fraudulent Returns, the government has 10 years from the time of___________to conduct a formal assessment of a taxpayer.

Tax matters that can be compromised, except:

Delinquencies

Civil Tax Cases

Pending FAN

Criminal Tax Fraud

Causes of Willful Neglect, except:

False or Fraudulent returns

Willful neglect to file ITR

30% under-declaration of income

Fails to pay the full amount of tax

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Final Exam: VAT and Taxation Essentials

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