Preferential Taxation (MC) PDF

lOMoARcPSD|43330865 Preferential- Taxation (MC) BS Accountancy (Polytechnic University of the Philippines) Scan to open on Studocu Studocu is not sponsored or endorsed by any college or university...

lOMoARcPSD|43330865 Preferential- Taxation (MC) BS Accountancy (Polytechnic University of the Philippines) Scan to open on Studocu Studocu is not sponsored or endorsed by any college or university Downloaded by Grace Parinal ([email protected])  lOMoARcPSD|43330865 PREFERENTIAL TAXATION: TEST BANK (Multiple choice questions) 1. Sale of goods and services to the following are subject to a discount of at least 20% and entitled to VAT exemption: a. Senior Citizens b. Persons with Disabilities c. Both a and b d. Neither a nor b 2. A senior citizen couple, German citizens, checked-in in Shangri-La The Fort where they celebrated the new year. Which of the following statements is correct? a. The couple is entitled to a 20% discount and VAT exemption on their hotel charges. b. The coupe is entitled to 20% discount but not to VAT exemption on their hotel charges. c. The couple is entitled to VAT exemption but not to the 20% discount on their hotel charges. d. The couple is not entitled to 20% discount as well as VAT exemption on their hotel charges. 3. The consumption of water, electricity, and telephone by a Senior Citizens Center and residential care/group homes that are run by the government or by a non-stock, nonprofit domestic corporation organized and operated primarily for the purpose of promoting the well-being of abandoned, neglected, unattached, homeless Senior Citizens is: a. Entitled to 50% discount and VAT exemption b. Entitled to 5% discount and VAT exemption c. Entitled to 50% discount but not to VAT exemption d. Entitled to 5% discount but not to VAT exemption 4. What rate of discount shall be granted to senior citizens on their purchase of basic necessities and prime commodities? a. 50% b. 10% c. 20% d. 5% 5. Based on the preceding item, suppose the buyer is a PWD, what is the applicable discount rate? a. 50% b. 10% c. 20% d. 5% 6. How much is the maximum amount of purchase per calendar week of basic and prime commodities entitled to discount? a. P1,300, in case there is an unutilized amount, the same can be carried over to the following week. Downloaded by Grace Parinal ([email protected])  lOMoARcPSD|43330865 b. P1,300, in case there is an unutilized amount, the same cannot be carried over to the following week. c. There is no maximum amount. d. None of the choices. 7. Five (5) people dined-in in a restaurant. They ordered a group meal with a total price, gross of VAT, amounting to P2,800.00. Two (2) of the group are senior citizens with proper identification to support such status. How much should the group pay to the restaurant? a. P2,800.00 b. P2,480.00 c. P2,240.00 d. P2,680.00 8. Medusa, 69 years old, took an air-conditioned Victory Liner Bus from Koronadal to Davao with a normal fare of P800.00. How much should be paid by Medusa to the conductor? a. P57.63 b. P160.00 c. P640.00 d. P800.00 9. Cardo, 69 years old, took an airplane from Davao Airport to NAIA and the fare was P1,680.00 (inclusive of taxes and gross of discounts). How much should be paid by Cardo? a. P1,200.00 b. P1,344.00 c. P1,500.00 d. P1,680.00 10. The CLEA Musa Corporation, a VAT registered taxpayer sold to Amando, a senior citizen, and to his wife, Amanda, a person with a disability, as follows: AMANDO AMANDA Grilled Tuna P 150.00 P 150.00 belly Crispy Pata 128.00 Korean Barbeque 134.00 Buttered Shrimp 100.00 100.00 Iced Tea 64.00 Leche flan 70.00 TOTAL P448.00 P448.00 Downloaded by Grace Parinal ([email protected])  lOMoARcPSD|43330865 The prices above are based on menu prices inclusive of VAT. The output tax due is: a. P38.40 b. P48.00 c. P96.00 d. Nil 11. The total amount to be paid by the spouses is: a. P640.00 b. P758.40 c. P800.00 d. P896.00 12. Board of Investment is otherwise known as a. Omnibus Investor Code of 1987 b. Omnibus Investment Code of 1987 c. Omnibus Investor Code of 1978 d. Omnibus Investment Code of 1987 13. Objectives of BOI includes the following except a. encourage investments in desirable areas of activities through the adoption of a cohesive and consolidated investments incentives law b. develop the country’s industries by establishing and promoting a competitive investment environment c. discourage monopolies d. none of the above 14. It is responsible for the development of investments here In the Philippines. a. Investment Priorities Plan b. National Economic and Development Authority c. Department of Trade and Industry d. Board of Investments 15. Incentives granted to registered enterprises includes the following except a. income tax holiday b. tax credits on manufactured goods c. additional deductions from taxable income for labor expense d. additional deductions from taxable income for necessary and major infrastructure works 16. Which of the following statements is correct? a. New registered firms under the Board of investments enjoys income tax holiday for 6 years from commercial operations for 6 years from commercial operations for pioneer firms and 4 years for non-pioneer firms b. The income tax holiday may be further extended not to exceed 8 years (maximum ITH) upon meeting certain conditions c. For PEZA-registered enterprises, the income tax holiday is same with BOI-registered companies in general Downloaded by Grace Parinal ([email protected])  lOMoARcPSD|43330865 d. All of the above 17. Statement 1: EO 226 otherwise known as the Omnibus Investment Code of 1987, is a relatively focused and systematic grant of incentives based on an investment Priorities Plan Statement 2: The IPP is an annual listing of activites considered critical to the attainment of the country’s overall economic growth and development a. Only statement 1 is correct b. Only statement 2 is correct c. Both statements are correct d. Both statements are incorrect 18. Income Tax Holiday (ITH) for BOI registered enterprises presupposes that it shall be exempt from the payment of income taxes reckoned from the scheduled start of commercial operations until the period given by the BOI has lapsed. Which of the following is ITH period is correct? i. Six years for new projects with pioneer status ii. Four years for new projects with non-pioneer status iii. Three years for expansion projects a. I and II only b. I only c. I and III only d. I, II, and III 19. Which of the following tax incentives is/are granted to BOI registered enterprises? i. Income Tax Holiday ii. Exemption from taxes and duties on imported spare parts iii. Exemption wharfage dues and export tax, duty, impost and fees iv. Tax exemption breeding stocks and genetic materials a. I and II only b. III and IV only c. I, II, and III only d. I, II, III, IV 20. Which of the following incentives, in addition to tax exemptions, is/are granted to BOI registered enterprises? i. Tax credit on tax and duty portion of domestic breeding stocks and genetic materials ii. Tax credit on raw materials and supplies iii. Additional deductions for labor and expense (ADLE) a. I only b. I and II only Downloaded by Grace Parinal ([email protected])  lOMoARcPSD|43330865 c. II and III only d. I, II, and III 21. Which of the following statements pertaining to Pioneer enterprises under EO 226 is correct? a. Pioneer enterprises are registered enterprises engaged in the manufacture, processing or production of commodities or raw materials that are not yet being produced in the Philippines on a commercial scale b. Pioneer enterprises also involves the use of a design, formula, method, process or system of production of transformation of any element, substance or raw material into another raw material or finished goods which is new and untried in the Philippines c. Pioneer enterprises are also engaged in the pursuit of agricultural, forestry and mining activities and/or services and energy sectors d. All of the above 22. ____ refers to the most recent list of the thirty poorest provinces of the Philippines at the time of application, as determined by the National Economic Development Authority (NEDA) a. Pioneer enterprises b. Special Economic Zones c. Non-pioneer enterprises d. Less Developed Areas 23. EO 226 provides incentives to i. Enterprises registered with BOI ii. Enterprises locating in Less Developed Areas iii. Enterprises locating in export processing zones a. I b. I and II c. I, II, III d. None of the above 24. Investment Priorities Plan includes and contains i. The specific activities and generic categories of economic activity wherein investments are to be encouraged and the corresponding products and commodities to be grown, processed or manufactured pursuant thereto for the domestic or export market; ii. Specific public utilities which can quality for incentives under this Code and which shall be supported by studies of existing and prospective regional demands for the services of such public utilities in the light of the level and structure of income, production, trade, prices and relevant economic and technical factors ofn the regions as well as the existing facilities to produce such services Downloaded by Grace Parinal ([email protected])  lOMoARcPSD|43330865 iii. Specific activities where the potential for utilization of indigenous no-petroleum based fuels or sources of energy can be best promote iv. Such other information, analyzes, data, guideline or criteria as the Board may deem appropriate a. I and III b. II and IV c. I, II, and II d. I, II, III, IV 25. Income tax exemption will be extended for another year in each following cases except a. The project meets the prescribed ratio of capital equipment to number of workers set by the Board b. Utilization of indigenous raw materials at rates set by the Board c. The net foreign exchange savings or earnings amount to at least US$500 000 annually during the first three years or operations d. The net foreign exchange savings or earnings amount to at least PHP500 000 annually during the first three years or operations 26. ____ refers to any of the credits against taxes and/or duties equal to those actually paid or would have been paid to evidence which tax credit certificate shall be issued by the Secretary of Finance or his representative, or the Board, if so delegated by the Secretary of Finance a. Tax exemption b. Tax credit c. Tax credit certificate d. Tax incentives 27. Which of the following statements is incorrect? a. BOI registered companies are subject to 5% gross income tax in lieu of national and local taxes b. After Income Tax Holiday period, BOI registered companies are treated as ordinary corporations c. BOI registered companies are subject to zero rated vat d. None of the above 28. Incentives to BOI Registered Enterprises include i. Tax exemptions ii. Tax credits iii. Additional deduction from Taxable Gross Income a. I only b. I and II only c. I and III only Downloaded by Grace Parinal ([email protected])  lOMoARcPSD|43330865 d. I, II, and III 29. The following incentives are in addition to those provided under Presidential Decree 66 and RA 7916 except a. Foreign merchandise, raw materials, equipment, spare parts, etc. brought into the zone shall not be subject to customs and internal revenue law and regulations nor to local tax ordinances b. BOI – registered enterprise incentives c. Additional deduction for necessary and major infrastructure works d. Exemption from local taxes and licenses except real estate tax 30. Tax exemptions provided to BOI registered enterprises includes the following except a. Income tax holiday b. Exemption from taxes and duties on exported spare parts c. Exemption from wharfage dues and export tax, duty, impost and fees d. Tax exemptions on breeding stocks and genetic material 31. Prior to the amendment of the TAX CODE UNDER CREATE ACT TAX INCENTIVES were granted to registered business enterprises by the different government agencies, except a. Philippine Economic Zone Authority (PEZA) b. Board of Investments (BOI) c. Income Tax Holiday (ITH) 32. The implementing Rules and Regulations of the Title XIII of the Tax Cide, as amended, provides that the IRR shall cover or apply to a. Government-owned and/or controlled corporations (GOCSs), government instrumentals (GIs), government commissaries, and state universities and colleges (SUCs) that were granted tax subsidies under the tax expenditure fund of the Annual General Appropriations Act b. Enhanced net operating loss carry-ever (NOLCO) c. Deduction for reinvestment allowance to manufacturing industry. 33. _________, as amended provides that the IPAs shall maintain their functions and powers as provided under the special laws governing them except to the extent modified by the provisions of this Code. a. Section 291 of the Tax Code b. Section 281 of the Tax Code c. Section 271 of the Tax Code 34. INVESTMENT PROMOTION AGENCIES (IPAs) _____________ of the Tax Code, as amended; a. (SECTION 293 (l) b. (SECTION 293 (h) c. (SECTION 293 (j) Downloaded by Grace Parinal ([email protected])  lOMoARcPSD|43330865 35. IPAs refer to government entities created by ______, executive order, decree or other, issuance, charge of promoting investments, granting and administering tax and non-tax incentives, and overseeing the operations of the different economic zones and Freeport in accordance with their respective special laws. a. Law b. Justice c. Order 36. Refers to any individual, partnership, corporation, Philippine branch of a foreign corporation, or other entity organized and existing under Philippine laws and registered with an investment promotion agency. a. REGISTERED BUSINESS ENTERPRISES (RBE) (SECTION 293(m) of the Tax Code, as amended) b. REGISTERED BUSINESS ENTERPRISES (RBE) (SECTION 283(m) of the Tax Code, as amended) c. REGISTERED BUSINESS ENTERPRISES (RBE) (SECTION 263(m) of the Tax Code, as amended) 37. SUMMARY OF TAX AND DUTY INCENTIVES AND PERIOD OF AVAILMENTS (Sec. 294 and 296, NIRC), Subject to the conditions and period of availment __________, respectively a. in Sections 259 and 269 b. in Sections 285 and 286 c. in Sections 295 and 296 38. (ITH) stands for INCOME TAX HOLIDAY a. True b. False c. Neither a nor b 39. It is one of the fiscal incentives given to Registered Business Enterprises (RBEs) that complies with the conditions required by law. a. Income Holiday Tax b. Income Tax Holiday c. Neither a nor b 40. After expiration of Income Tax Holiday, an Export Enterprise may avail a tax rate equivalent to ___________ effective July 1, 2020, based on the gross income earned, IN LIEU of all national and local taxes. a. 5% b. 10% c. 15% 41. ENHANCED DEDUCTIONS (ED), Registered business enterprises may be granted enhanced deductions in addition to the allowable ordinary and necessary deduction under ________ of the Tax Code, as amended. Downloaded by Grace Parinal ([email protected])  lOMoARcPSD|43330865 a. Section 24 b. Section 34 c. Section 44 42. In enhanced deductions, ______________ additional deduction on research and development expense incurred in the taxable year. a. 80% b. 90% c. 100% 43. For export enterprises governed by special laws which do not provide for allocation, the 5% SCIT based on the gross income shall be paid and remitted as follows: ___ to the National Government; and ___ which shall be directly remitted by a registered enterprise to the Treasurer’s office of the municipality or city where the enterprise is located. a. 3%, 2% respectively b. 2%, 3% respectively c. 5%, 5% respectively 44. Sales receipts and other income derived from non-registered project or activity shall be subject to appropriate taxes imposed under the Tax Code, as amended. a. TAXATION OF REGISTERED AND NON-REGISTERED PROJECT OR ACTIVITY b. TAXATION OF NON-REGISTERED PROJECT OR ACTIVITY c. TAXATION OF REGISTERED PROJECT OR ACTIVITY 45. The SIPP shall be submitted to the _________ for the Approval and shall be valid for three (3) years from its issuance. a. President b. Governor c. Vice-President 46. COMPOSITION OF FIRB (____________) a. Section 982 b. Section 298 c. Section 892 47. The power to grant tax incentives is a function of the FIRB. Where the investment capital is equal to _____________________ or below, the FIRB shall delegate the power to grant tax incentives to the concerned IPA. a. three billion pesos (P3,000,000,000.00) b. two billion pesos (P2,000,000,000.00) c. one billion pesos (P1,000,000,000.00) 48. CERTIFICATE OF ENTITLEMENT TO TAX INCENTIVES (CETI), RMC 28-2022 dated ______________ provides, that pursuant to the provisions of Section 3 under Rule 8 of the Implementing Rules and Regulations (IRR) of CREAT Law, all RBEs shall apply for a Certificate of Entitlement to Tax Incentives (CETI), formerly Certificate for Entitlement to Downloaded by Grace Parinal ([email protected])  lOMoARcPSD|43330865 Income Tax Holiday with their concerned IPA prior to the filing of Annual Income Tax Return (AITR). a. February 20, 2022 b. February 15, 2022 c. February 10, 2022 49. POWER OF THE PRESIDENT TO GRANT INCENTIVES (______________) a. SECTION 301 b. SECTION 401 c. SECTION 501 50. INVESTMENT PRIOR TO THE EFFECTIVITY OF CREATE LAW (_______________) a. SECTION 311 b. SECTION 312 c. SECTION 313 51. Bubbles Corporation employs both regular and senior employees and paid the following compensation: Regular Employees P800,000 Senior Citizen Employees 200,000 With Salary grade above poverty level 100,00 With Salary grade below poverty level The deductible compensation expense is: a. P1,100,000.00 b. P1,115,000.00 c. P1,120,000.00 d. P1,145,000.00 52. Using the above information, except that 20% of the regular employees are persons with disability receiving a total compensation of P160,000.00, the deductible compensation expense of the corporation is: a. P1,152,000.00 b. P1,155,000.00 c. P1,178,000.00 d. P1,192,000.00 Downloaded by Grace Parinal ([email protected])  lOMoARcPSD|43330865 53. A senior citizen, who is also a PWD stayed in a hotel to unwind. The hotel is offering a promotional discount of 30% on the day the elderly checked in. What is the discount rate that will be enjoyed by the senior citizen/PWD? a. 50% b. 20% c. 40% d. 30% 54. Statement 1: Persons with disability shall be entitled to claim at least twenty percent (20%) discount from the purchase of certain goods or services for their exclusive use or enjoyment as provided for under RA2277/RR-1-2009 as amended. Statement 2: Persons with disability, like senior citizens, shall likewise be entitled to vat exemption. a. Only statement 1 is correct b. Only statement 2 is correct c. Both statements are correct d. Both statements are incorrect 55. PWDs/Senior Citizens may avail the 20% discount and VAT exemption from the purchases of certain goods/services upon submission of the following proofs of entitlement thereto: a. Identification card issued by the city/municipal mayor, or barangay captain of the place where the PWD resides or the Senior Citizen’s ID card (for senior citizens) b. Passport c. Transportation discount fare identification card issued by the National Council for the Welfare of Disabled Persons (NCWDP) d. Any of the above 56. What is considered idle land? I. Agricultural lands more than one hectare in area, half of which remains cultivated except agricultural land with perennial crops with at least 50 trees and those used for grazing; II. Land in the city or municipality more than one thousand square meters in are, one half of which remains unutilized or unimproved by the owner. a. True; True b. True; False c. False; True d. False; False Downloaded by Grace Parinal ([email protected])  lOMoARcPSD|43330865 57. Installation of additional facilities and/or equipment that will result in the increase of production capacity. It may include modernization and rehabilitation. a. Rehabilitation b. Modernization c. Extension d. Expansion 58. A registered enterprise a. Pioneer Enterprise b. Non-pioneer Enterprise c. Pioneer Status d. Non-pioneer Status 59. Include all registered producer enterprises other than pioneer enterprises. a. Pioneer Enterprise b. Non-pioneer Enterprise c. Pioneer Status d. Non-pioneer Status 60. An area of activity shall be accorded non-pioneer status if it may be determined categorically as falling in such classification using the Investment Priorities Plan (IPP). a. Pioneer Enterprise b. Non-pioneer Enterprise c. Pioneer Status d. Non-pioneer Status 61. As a general policy, the basis for determining whether an area of economic activity may be considered pioneer or non-pioneer shall be Investment Priorities Plan prepared yearly by the Board of Investments. In absence thereof, the applicable criteria shall be formulated by PEZA Downloaded by Grace Parinal ([email protected])  lOMoARcPSD|43330865 a. ECOZONE Plan b. Non-pioneer Plan c. Investment Priorities Plan d. Investment Plan 62. May be extended to an ECOZONE Export or Free Trade Enterprise only after the evaluation of their application for such status. a. Pioneer Enterprise b. Non-pioneer Enterprise c. Pioneer Status d. Non-pioneer Status 63. Any income from unregistered operations are subject to the provisions of the Tax Code, as amended, such as; I. Regular corporate income tax (RCIT) II. Minimum corporate income tax (MCIT) III. Final income tax on active income IV. 10% Capital gains tax on shares of stock of a domestic corporation V. 6/10 of 1% stock transaction tax. a. I, II, V only b. I, II, III, V only c. I, II, V only d. All of the above 64. Which of the following is/are incorrect about the exclusion in national taxes referring to internal revenue taxes: a. Withholding taxes on salaries of employees b. Import chargers under the Tariff and Customs Code Downloaded by Grace Parinal ([email protected])  lOMoARcPSD|43330865 c. Withholding taxes on income payments to persons other than a registered ECOZONE enterprise, subject to withholding tax at source under Section 50 (b) of the Tax Code, as amended. d. None of these 65. Which of the following statements are correct? Statement 1: PEZA registered companies are exempt from creditable withholding tax, except for unregistered operations. However, PEZA registered companies are not exempted from being a withholding agent. Statement 2: There may be deficiency withholding tax to be assessed by BIR, if there will be a failure to withhold (e.g. Fringe Benefit Tax, Withholding Tax on Wages, Expanded Withholding Tax from local suppliers) on the part of PEZA registered enterprise. a. Only Statement 1 is correct b. Only Statement 2 is correct c. Both Statements are correct d. Neither Statement 1 nor Statement 2 is correct 66. Which is not correct in Refund/Credit of Erroneously Paid 5% GIT? a. In the case of the 3% tax share of the National Government – shall be refunded by the BIR b. In case of the 2% tax share of the city/ municipality – shall be refunded by the city/municipality c. In case of the 3% tax share of the city/ municipality – shall be refunded by the city/municipality d. All of these are incorrect 67. This was derived from business activity within the ecozone, net of sales discounts, sales returns and allowances minus cost of sales or direct costs but before any deduction is made for administrative, marketing, selling and/or operating expenses or incidental losses during a given taxable period. a. Net Sales Downloaded by Grace Parinal ([email protected])  lOMoARcPSD|43330865 b. Gross Income c. Gross Domestic Product d. Net Income 68. Which of the following statements are the Exemption of PEZA Reg. Enterprises from LGU Permits and Local Taxes, Licenses and Fees? Statement 1: Majority of PEZA registered ecozone locator enterprises, which are entitled to any or all 3 fiscal incentives (ITH, 5% GIT in lieu of national and local taxes except real property tax owned by developers, and/or tax and duty-free importation of machinery and equipment, raw materials, supplies, spare parts and other production inputs), including Logistics Facilities Enterprises, are exempted from having to secure all LGU permits. Statement 2: PEZA registered enterprises, availing of ITH incentive are exempted from payment of all local taxes, licenses, imposts and fees, except real estate taxes, provided that these enterprises shall also be exempted from payment of real property taxes on machineries and equipment they acquire for use in their production operations during the first 3 years of use of such machinery and equipment. PEZA registered enterprises, availing of the 5% GIT incentive are exempted from payment of all national and local taxes, except real property tax owned by developers. a. Statement 1 and 2 b. Statement 2 c. Statement 1 d. None of the above 69. Where does local tax authority emanate from? a. Legislature b. Executive c. Sanggunian d. Supreme Court 70. Which of the following is not a fundamental principle of local taxation? a. It shall be uniform in each local sub-unit Downloaded by Grace Parinal ([email protected])  lOMoARcPSD|43330865 b. It shall evolve a progressive system of taxation c. The revenues collected under the Local Government Code shall inure solely to the benefit of and subject to disposition by the LGU levying the tax or other imposition (autonomy) d. Collection of local taxes can be delegated to any private person 71. When may a Local Government Unit adjust local taxes? a. Every 5 years b. Every 2 years c. Every year d. Anytime sanggunian deems it fit 72. Where the National government elects to tax a particular area, it impliedly withholds from the local government the delegated power to tax the same field. This doctrine is known as? a. Preemption b. Separateness of Department of Government c. Exclusive prerogative doctrine d. Tax Jurisdiction 73. Which is not a characteristic of the real property tax? a. Direct tax b. Ad Valorem c. Progressive d. Invisible 74. The presentation of a community tax certificate is necessary in the following situation, except; a. To received private funds b. To receive any license or permit or certificate from public authority c. To take oath of office in the government d. To acknowledge execution of document before a notary public 75. Zion Shoe’s head office is located in Ortigas, Pasig City. However, its manufacturing plant is in Taytay, Rizal. As the company accountant you were asked by Zion where to pay the 2% Local Business Tax. Zion’s gross receipt is P10,000,000. a. Pay P200,000 at Taytay, Rizal b. Pay P200,000 at Ortigas, Pasig City c. Pay P60,000 at Ortigas, Pasig City and P140,000 at Taytay, Rizal Downloaded by Grace Parinal ([email protected])  lOMoARcPSD|43330865 d. Pay P140,000 at Ortigas, Pasig City and P60,000 at Taytay, Rizal 76. Section 3 of PEZA Act provides the following purpose, intent and objectives of the law, except a. To vast the special economic zones on certain areas thereof with the status of a separate customs territory within the framework of the Constitution and the national sovereignty and territorial integrity of the Philippines b. To stimulate the repatriation of Filipino capital by providing attractive climate and incentives for business activity c. To transform all areas in the country into highly developed agro-industrial, industrial, commercial, tourist, banking, investment, and financial centers, where highly trained workers and efficient services will be available to commercial enterprises d. To establish the legal framework and mechanisms for the integration, coordination, planning and monitoring of special economic zones, industrial estates/parks, export processing zonesand other economic zones 77. The ______ shall administer itself on economic relations with other entities within the country, or, subject to the administrative guidance of the Department of Foreign Affairs and/or the Department of Trade and Industry, with foreign entities or enterprises. a. PEZA Law b. Ecozone c. Decentralized Ecozone d. Export Processing Zone 78. It contains establishments that cater both local and foreign investors to the Ecozones. Such businesses include hotels, resorts, apartments, and sports facilities. a. Domestic Market Enterprises b. Facilities Enterprise c. Tourism Enterprise d. Tourist and Recreation Centers 79. Tracts of land developed for the use of industries. a. Industrial Estates Downloaded by Grace Parinal ([email protected])  lOMoARcPSD|43330865 b. Export Processing Zones c. Free Trade Zones d. Tourist and Recreation Centers 80. The PEZA Board shall composed of thirteen members and the ______ as Chairman. a. Undersecretaries of Environmental and Natural Resources b. Secretary of the Department of Trade and Industry c. Deputy Director General of the NEDA d. Director General of the Philippine Economic Zone Authority 81. The CREATE LAW introduced a new title in the Tax Code, TITLE XIII, entitled a. TAX INCENTIVES b. TAX DEFFERED c. INCOME TAX 82. _________________, projects or activities currently registered with IPAs and enjoying incentives prior to the effectiveness of the Act. a. Non- Registered enterprises b. Registered enterprises c. Not Registered enterprises 83. The Fiscal Incentives Review Board (FIRB) of the IPA under a delegated authority from the FIRB, shall grant the appropriate tax incentives provided in this title to be granted to registered business enterprises only to the extent of their approved registered project or activity under the strategic investment priority plan (SIPP). a. EXTENT OF AUTHORITY TO GRANT TAX INCENTIVES b. TAX AND DUTY INCENTIVES AND PERIOD OF AVAILMENTS c. SPECIAL CORPORATE INCOME TAX 84. After expiration of Income Tax Holiday, an Export Enterprise may avail a tax rate equivalent to ____ percent effective July 1, 2020, based on the gross income earned, in lieu of all national and local taxes. a. 4% b. 5% c. 6% 85. Registered business enterprises may be granted enhanced deductions in addition to the allowable ordinary and necessary deduction under __________ of the Tax Code, as amended. a. Section 32 b. Section 33 c. Section 34 Downloaded by Grace Parinal ([email protected])  lOMoARcPSD|43330865 86. In enhanced deductions, Depreciation allowance of the assets acquired for the entity’s production of goods and services (qualified capital expenditure) additional ______________ for buildings; and additional ______________ for machineries and equipment. a. 30% and 60 % respectively b. 20% and 40 % respectively c. 10% and 20 % respectively 87. For export enterprises governed by special laws which do not provide for allocation, the 5% SCIT based on the gross income shall be paid and remitted as follows: __% to the National Government; and __% which shall be directly remitted by a registered enterprise to the Treasurer’s office of the municipality or city where the enterprise is located. a. 2% and 2% respectively b. 3% and 2% respectively c. 4% and 2% respectively 88. Sales receipts and other income derived from ____________ project or activity shall be subject to appropriate taxes imposed under the Tax Code, as amended. a. Non- registered b. Not Registered c. Registered 89. The SIPP shall contain Exports of at least __________ of products and services. a. 60% b. 70% c. 80% 90. STATEMENT 1: The power to grant tax incentives is a function of the FIRB. Where the investment capital is equal to one billion pesos (P1,000,000,000.00) or below, the FIRB shall delegate the power to grant tax incentives to the concerned IPA. STATEMENT 2: Splitting of the total amount of investment capital by breaking up the projects or activities into smaller projects or activities, for the purpose of evading or circumventing the jurisdiction of the FIRB to approve, shall not be allowed. a. Statement 1 is True; Statement 2 is True. b. Statement 1 is False; Statement 2 is True. c. Statement 1 is True; Statement 2 is False. 91. PEZA registered enterprise shall be exempt from the payment of income taxes reckoned from the scheduled start of commercial operations, as follows: I. New projects with a pioneer status for six (6) years; II. New projects with a non-pioneer status for four (4) years; and III. PD 66 or the law creating the Export Processing Zone Authority; and IV. Expanding firms for three (3) years a. I and II b. II only c. I, II, and III Downloaded by Grace Parinal ([email protected])  lOMoARcPSD|43330865 d. I, II, and IV 93. The Tax incentives shall apply to registered operations of ____________ during period of registration with PEZA. a. Registered Enterprises b. Non-Registered Enterprises c. ECOZONE Enterprises d. Fiscal Enterprises 94. PEZA registered enterprises are subject to what percent of Special Tax on Gross Income? a. 5% b. 10% c. 15% d. 20% 95. Refers to Gross sales/revenues derived from business activity within the ecozone, net of sales discounts, sales returns and allowances minus cost of sales or direct costs but before any deduction is made for administrative, marketing, selling and/or operating expenses or incidental losses during a given taxable period. a. Income Tax b. Net Income c. Gross Income d. Gross Income Tax 96. Statement 1: Subject to conditions and requirements set by law, the ITH incentive for Ecozone Export or Free Trade Enterprises may be extended for an extra year but in no case to exceed a total period of eight (8) years for pioneer-registered enterprises. Statement 2: PEZA-registered enterprises are required to secure their Certificate of Income Tax Holiday and Certificate of Incentives, respectively, for attachment to their Annual Income Tax Return with the BIR as proof of their entitlement to their tax incentives. a. Both Statements are incorrect. b. Both Statements are correct. c. Only Statement 1 is correct. d. Only Statement 2 is correct. 97. The following are included in the declared policies of the state except a. Extend to projects which will significantly contribute to the attainment of these objectives, fiscal incentives without which said projects may not be established in the locales, number and/or pace required for optimum national economic development b. Encourage private Filipino and foreign investments in industry, agriculture, forestry, mining, tourism and other sectors of the economy c. Fiscal incentives shall be extended to stimulate the establishment and assist initial operations of the enterprise, and shall terminate after a period of not more than 15 years from registration pr start-up of operating unless a specific period is otherwise stated d. Ensure the holistic development by safeguarding the well-being of the social, cultural and ecological life of the people Downloaded by Grace Parinal ([email protected])  lOMoARcPSD|43330865 98. EO 226 provides incentives to the following except a. Enterprises registered with the BOI b. Enterprises not locating in Less Developed Areas (LDAs) c. Multinational companies (MNCs) establishing their regional or area headquarters (RHQs) or regional operating headquarters(ROHQs) in the Philippines d. MNCs establishing their regional warehouses in the Philippines for purpose of supplying spare parts or manufactured components and raw materials to the Asia-Pacific Region and other foreign markets Enterprises locating in export processing zones 99. The following incentives are in addition to those provided under Presidential Decree 66 and RA 7916 except a. Foreign merchandise, raw materials, equipment, spare parts, etc. brought into the zone shall not be subject to customs and internal revenue law and regulations nor to local tax ordinances b. Additional deduction for necessary and major infrastructure works c. BOI – registered enterprise incentives d. Exemption from local taxes and licenses except real estate tax 100. Income tax exemption will be extended for another year in each following cases except a. The project meets the prescribed ratio of capital equipment to number of workers set by the Board. b. Utilization of indigenous raw materials at rates set by the Board c. The net foreign exchange savings or earnings amount to at least US $500 000 annually during the first three years or operations d. The average cost of indigenous raw materials used in the manufacture of the registered product is less than 50% of the total cost of raw materials for the preceding years prior to the extension unless the Board prescribed a higher percentage 101. Incentives to BOI registered enterprises exclude the following except a. Additional deduction from taxable gross income b. Additional deduction for necessary and major infrastructure works c. Six years ITH for projects located in a LDA d. Exemption from local taxes and licenses except real estate taxes 102. Which of the following statements is correct? a. New registered firms under the Board of investments enjoys income tax holiday for 8 years from commercial operations for 8 years from commercial operations for pioneer firms and 6 years for non-pioneer firms b. The income tax holiday may be further extended not to exceed 8 years (maximum ITH) upon meeting certain conditions c. For PEZA-registered enterprises, the income tax holiday is not the same with BOI-registered companies in general Downloaded by Grace Parinal ([email protected])  lOMoARcPSD|43330865 d. All of the above 103. Which of the following statements is incorrect? a. BOI registered companies are not subject to 5% gross income tax in lieu of national and local taxes b. After Income Tax Holiday period, BOI registered companies are treated as ordinary corporations c. BOI registered companies are subject to zero rated vat d. None of the above 104. Upon the effectivity of the plan or portions thereof, the President shall a. Proclaim the whole or part of such plan as in effect; or b. Return the whole or part of the plan to the BOI for revision. c. Issue all necessary directives to all departments, bureaus, agencies or instrumentalities of the government to ensure the implementation of the plan by the agencies concerned in a synchronized and integrated manner d. Adopt any policy or take any course of action contrary or inconsistent with the plan 105. Subject to publication requirements and the criteria for investment priority determination, the BOI may, at any time, except a. Impair whatever rights may have already been legally vested in qualified enterprises which shall continue to enjoy such rights to the extent allowed under this Code b. Add additional areas in the plan c. Alter any of the terms of the declaration of an investment area or the designation of measured capacities d. Terminate the status of preference Downloaded by Grace Parinal ([email protected])