Reference no: EM132884767

Questions -

Q1. A depository bank under Foreign Currency Deposit System has the following income from foreign currency transactions (Exchange Rate $1 = P45)

From Nonresidents $5,000

From residents $3,000

From Philippine National Bank $2,000

How much is the final withholding tax applicable on the above income?

a) P22,500

b) P9,000

c) P13,500

d) P45,000

Q2. Which of the following is included in the Gross Philippine Billings for income tax purposes of an international air carrier

I. Tickets sold outside the Philippines for passengers originating from outside the Philippines.

II. Tickets sold in the Philippines for passengers originating from the Philippines but are not actually flown.

III. Passage documents sold outside the Philippines for excess baggage originating from the Philippines.

IV. Passage documents sold in the Philippines for cargoes originating from outside the Philippines.

a) II only

b) I, I1, 1l and IV

c) II and IV only

d) III only

Q3. During the year, a branch office of a multinational corporation remitted the following income/revenues to its head office in Canada

Dividend income from domestic corporations, P500,000

Interests from money placements in the banks, P200,000

Royalty income, P300,000

Net income from operations, P2,000,000

The correct branch remittance tax is:

a) P375,000

b) P0

c) P300,000

d) P450,000

Q4. Offshore Banking Units (OBUs) are tax exempt on income derived from

I. Foreign currency transactions with local commercial banks.

II. Foreign currency transactions with branches of foreign banks authorized by BSP.

III. Interest income derived from foreign currency loans granted to residents.

a) II and III only

b) I and II only

c) I only

d) II only

Q5. A domestic proprietary educational institution improved its library facilities by adding a new wing to its old library building. The capital outlay on library improvement, for income tax purposes, may be:

a) Deducted at full at the time of completion of the improvement

b) Capitalized and depreciated over the estimated life of the improvement

c) Capitalized or expensed outright at the option of the Government

d) Capitalized or expensed outright at the option of the school Owners

Q6. Advance Learning Institute, an educational institution provided the following data for current taxable year

Income from tuition fees P3,500,000

School miscellaneous fees 1,500,000

Dividend income

Domestic corporation 2,000,000

Foreign corporation 2,000,000

Rent income (net of 5% withholding tax) 1,900,000

Operating expenses 4,000,000

The income tax payable of the school is:

a) P1,750,000

b) P1,650,000

c) P400,000

d) P500,000