theories of taxation philippines

(B) Twenty-five percent (25%). (D) All costs of production of finished goods. (D) Reappraised value of the property. A net operating loss which had not previously been deducted from gross income shall be carried over as deduction only the next year immediately following the year of such loss. 15. TAXATION IN THE PHILIPPINES. (A) Straight-line method. (B) Interest expense on money borrowed to finance petroleum operations. (C) Ten percent (10%). (A) Banks and other non-bank financial intermediaries. All foreign corporations are taxable only for income earned within the Philippines. When we take the revenue obtained by taxation, how ought the burden to be distributed? (A) Resident citizen. (D) None of the above. %) of gross income from all sources within the Philippines. 35. (D) None of the above. 11. (D) Accumulated profits of any year distributed to a shareholder of a corporation shall be considered dividend subject to final tax on the distributee in the year received. 60. (A) Statement 1 only. 10. Statement 2. (B) Be subject to 15% final tax. Research and development costs may be outright deduction or deferred expense. the process … (C) Multinational corporation. theory of taxation philippines (C) Both statements. (B) January 1, 1999. (C) Domestic corporation. The MCIT shall be imposed upon a domestic corporation or a resident foreign corporation when the amount of minimum corporation income tax is greater that the normal income tax due from such corporation. can send it to you via email. All joint ventures regardless of the purpose these are created are exempt from income taxation. (D) None of the above. Statement 1. (D) None of the above. Statement 2. (A) Joint venture. 70. 32. The term applies to a foreign corporation engaged in trade or business within the Philippines. Chapter 4 will examine current changes in Ukrainian tax legislation and analyze (D) Joint accounts. (C) Adjusted basis for computing the loss on the sale of property. Which of the following is exempt from income tax? 1. Which of the following statement is most correct? As a result, taxation... Keynesian Taxation Theory. A good tax system should be efficient in that it should be able to waste as little money and resources as possible. Such considerations as these have led men to think of a progressive or graduated form of distribution, in which the rate of taxation levied increases with the size of the income. Vertical Equity: A tax system should distribute the burden of paying taxes fairly across people with different abilities to pay. (B) Income from a taxable partnership is constructively received by a partner in the same taxable year that the partnership determined its net income after tax. Chapter 3 examines the costs of taxation according to welfare and optimal taxation theory and discuss how this analysis can be applied to Ukraine. All earnings are taxable with income tax. An individual on the cash basis of accounting shall deduct interest paid in advance in the year that the principal is paid. Special Assessment: levied only on land based wholly on benefit accruing theories as a result of improvements or public works undertaken by … 13. (C) Both ordinary and capital gains. (A) Statement 1 only. (D) Includes the net capital gain. 7. 68. (C) Interest from Philippine currency bank. (B) Seven and one-half percent (7 ? Statement 2. Without taxes, the government would be paralyzed for lack of the motive power to activate and operate it (CIR v. (D) None of the above. PURPOSES OF TAXATION. (B) Nonresident foreign corporation. All joint ventures regardless of the purpose these are created are exempt from income taxation. Statement 1. Statement 2. (A) Capital gains and losses of corporations are always considered at 100%, regardless of the length of the holding period of the asset. (D) None of the above. Working 24/7, 100% Purchase SAMPLE. (B) Statement 2 only. (B) A corporation or association organized exclusively for holding title to property, collecting income therefrom, and turning the entire amount thereof, less expenses, to an organization which itself is exempt from income tax. Statement 1. (B) Statement 2 only. (C) Creditable withholding tax of 10%. (D) Nonresident corporation. 21. (A) Statement 1 only. This principle implies two things: Horizontal Equity: People in equal positions should be made to pay the same amount of taxes. 5. %) of gross rentals, lease or charter fees from leases. (D) Tax under Section 24 (A). Statement 1. The term applies to a foreign corporation not engaged in trade or business within the Philippines. 46. The right of the chief authority to collect taxes, and the general policy which determines who is to be taxed, how much the tax shall be, and for what purposes it shall be levied has always been a controversial issue. (D) Two and one-half (2? (B) Sum of money and the fair market value of the property received. Statement 1. Which is not a creditable withholding income tax? (C) Both statements are correct. (A) Business partnerships. (C) Both statements are correct. There may be an ordinary loss of a capital asset. Which of the following statements is not a requisite for deduction of bad debts? Deductible business expenses must be ordinary and necessary. (A) Statement 1 only. (A) Interest expense on money borrowed to buy government bonds. (B) Cost of goods sold shall include all business expenses whether directly or not directly incurred to produce the merchandise to bring them to their present location and use. (C) Associations. (C) Improperly accumulated earnings tax. (D) None of the above. (B) Statement 2 only. Which of the following methods of depreciation shall be allowed for income tax purposes? (A) There must be an existing indebtedness to the taxpayer and this must be valid and legally demandable. 16. Listed below are the ways in which governments can use taxation in a modern economy:- Revenue generation: – Taxation is used by the government to raise revenues for its operations, infrastructure, … 23. The requirement that everybody share an equal amount of revenue is equally absurd. 3. Statement 1. (A) Statement 1 only. (C) Both statements. An accumulation of earnings or profits (including undistributed earnings or profits of prior years) is unreasonable if it is not necessary of for the purpose of the business, considering all the circumstances of the case. 26. 80. The share of a partner in the partnership’s distributable net income of a year, even if not actually received, will be considered constructively received by the partner in the same year that the net income of the partnership is determined, and will be subject to a final withholding tax of 10%, as if dividend. However, (B) Resident foreign corporation. The term “domestic”, when applied to corporation, means created or organized in the Philippines or under the laws of a foreign country as long as it maintains a Philippine Branch. Which of the following statement is most correct? (C) Improperly accumulated earnings tax. Expenditures of private educational institutions for expansion of school facilities may be outright deductions, or capitalized. Salaries received by a partner from a general professional partnership is not considered gross compensation income but as part of his share in the distributable net income of the partnership. (D) None of the above. This is, of course, the way in which our present income tax works, which allows "a personal allowance " of 135, or 225 " in the case of an individual whose wife is living with him/her to be free of income tax. (A) Statement 1 only. (B) The corporations’ income and expenses for the fiscal shall be deemed to have been earned and spent equally for each month of the period. Which of the following corporations shall pay a tax equal to thirty-five percent (35%), now thirty percent (30%), of the gross income received during the each taxable year from all sources within the Philippines? (B) Optional corporate income tax. 42. Which of the following can not avail of the Net Operating Loss Carry-Over (NOLCO)? (B) 10%. (B) Statement 2 only. All joint ventures regardless of the purpose these are created are exempt from income taxation. A number of theories have been put forward by different economists explaining how justice in taxation can be achieved among which the following are important theories of taxation and are discussed as follows : 24. (D) Contributions of canned goods to student organizations during the Christmas season for distribution to Baguio City Jail inmates are deductible from gross income. (A) 15%. 78. (B) Donation made to employees. (D) None of the above. (D) Capital gains tax. Statement 1. (D) Capital gains tax. None of the above. 81. (C) Both statements are correct. The strongest argument against this graduated form of taxation seems to be that it checks saving. The first is the pure proportional form; taking income as the standard, it is laid down that the criterion of ability to pay would be attained by taxpayers paying in proportion to their income proportion being considered in the strict mathematical sense of the word. If taxation is to be levied solely to obtain revenue, then equality may be a very desirable ideal at which to aim. (B) Statement 2 only. 33. Provided that the sole aim in imposing taxation is to obtain revenue, then a reasonable distribution of taxation could surely be based upon the citizens' ‘abilities to pay’. Moreover, the extension of the powers of governments and the creation of modern greater states has necessitated larger revenue for the administration of states. 2.3.1 The taxation of cross-border income under domestic corporate income tax laws It is commonly accepted that there are two aspects to a state’s sovereignty: the power over a territory (“enforcement jurisdiction”) and the power over a particular set of … Statement 1. According to the theory, taxes should be based upon the amount of money people earn. 49. (A) The tax imposed by law on corporations is not imposed only upon such corporations as are organized and operated for profit. (B) Final withholding tax of 10%. How to Get Taxpayer Identification Number (TIN). As the major principles of taxation in any system, it is worth taking an in-depth look at “efficiency” and “equity (fairness)”. (A) Resident foreign corporation. (B) Statement 2 only. This video features and discusses the general principles of taxation in the Philippines. (C) Both statements are correct. Which of the following statements is most correct? (B) Statement 2 only. (B) Statement 2 only. (B) Capital gains only. Statement 2. (A) The option to be taxed based on gross income shall be available only to firms whose ratio of cost of sales to gross sales or receipts from all sources does not exceed fifty-five percent. (C) Both statements are correct. Statement 2. (A) Statement 1 only. They include all organizations with substantially all the salient features of a corporation and are taxable as a “corporation”. Taxation has a key role in a modern economy. Is it to the advantage of the common that this should be done? Which of the following statements is not correct? (C) Losses incurred on transaction with related party. General Theories and Principles of Taxation, Written by  Taxation Rishabh Sharma. (C) Fair market value of the property received. 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