Income Tax and Corporate Purpose Quiz

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What does the fact that a corporation is a mere holding company or an investment company indicate?

The corporation is planning to expand its business operations.

The corporation is focused on corporate social responsibility.

The corporation is aiming to increase its profits.

The corporation is likely avoiding tax on its shareholders or members. (correct)

How is the value-added tax imposed?

Only on the buyer of goods and services.

Only on the government for regulating sales.

Only on the seller of goods and services. (correct)

Only on foreign entities buying local goods.

What determines the purpose to avoid tax upon shareholders or members of a corporation according to the general rule mentioned?

The number of shareholders in the corporation.

The location of the corporation's headquarters.

The reasonableness of profits accumulated by the corporation. (correct)

The company's annual revenue.

Under what circumstances is a donor's tax imposed?

Upon the transfer of property by gift. Signup and view all the answers

What is the general tax rate for value-added tax as per the information provided?

12% Signup and view all the answers

What does 'act of liberality (animus donandi)' mentioned in relation to donor's tax refer to?

An intent to gift property without any financial gain. Signup and view all the answers

What is the time period within which a taxpayer must file a protest against an assessment?

30 days from receipt of the Final Letter of Decision (FLD) and Final Assessment Notice (FAN) Signup and view all the answers

What is the deadline for submitting supporting documents for a request for reinvestigation?

60 days from filing the request for reinvestigation Signup and view all the answers

If the Bureau of Internal Revenue (BIR) denies the protest, what is the next step for the taxpayer?

File an appeal with the Court of Tax Appeals (CTA) Division within 30 days Signup and view all the answers

What is the time period for appealing a decision of the CTA En Banc to the Supreme Court?

15 days from receipt of the decision Signup and view all the answers

What authorizes the immediate issuance and service of warrants of distraint and garnishment and/or levy upon the issuance of the final decision?

Revenue Memorandum Signup and view all the answers

What is the time period within which the BIR can assess a taxpayer?

3 years from the expiration of the period Signup and view all the answers

What is the maximum annual tax rate that cities and municipalities within the Metropolitan Manila Area can levy on real property?

2% Signup and view all the answers

What is the Special Education Fund (SEF)?

An annual tax on real property for educational purposes Signup and view all the answers

What does the SAVANT Framework refer to in the context of tax management?

A framework for effective tax planning and implementation Signup and view all the answers

What is internal financing?

A strategy where the company uses its retained earnings to finance its new venture Signup and view all the answers

What are the two forms of external financing mentioned in the text?

Debt financing and equity financing Signup and view all the answers

What is an advantage of internal financing compared to external financing?

Internal financing is not subject to payout and control restrictions Signup and view all the answers

What is the maximum amount of additional community tax that a corporation must pay annually, in addition to the basic community tax of Php 500?

Php 10,000 Signup and view all the answers

Where should a corporation pay its community tax?

In the place where its principal office is located Signup and view all the answers

What percentage of a corporation's sales recorded in its principal office is taxable by the LGU where the principal office is located?

30% Signup and view all the answers

How is the remaining 70% of a corporation's sales recorded in its principal office divided for taxation purposes?

60% to the LGU where the factory is located, 40% to the LGU where the plantation is located Signup and view all the answers

Within how many years must local business taxes, fees, or charges be assessed?

5 years Signup and view all the answers

When must corporations pay their annual business tax and other fees imposed by the LGU?

Within the first 20 days of January each year Signup and view all the answers

What is the minimum period over which deferred expenses must be ratably distributed?

60 months Signup and view all the answers

According to Republic Act No. 7459, for how many years are Filipino investors exempt from paying taxes on income derived from their inventions?

10 years Signup and view all the answers

Which of the following is NOT mentioned as an exemption for Filipino investors under Republic Act No. 7459?

Property taxes Signup and view all the answers

In a strategic analysis, what is an important consideration regarding a company's tax status?

Whether the company is in a net operating loss carryforward situation Signup and view all the answers

What should be anticipated in the planning process, according to the text?

All of the above Signup and view all the answers

What is mentioned as being important in the planning process, in addition to timing and time-value issues?

Tax rate and rule changes Signup and view all the answers