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146 views38 pagesChapter 10 & 11
Uploaded by
Aices Jasmin Melgar BongaoCopyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
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/ 38
| Chapter 7O
Excise Taxes
In addition to VAT, excis
. et ise taxes apply to goods manufactured or
produced in the Philippines for domestic sales or Consumption, or for any
Se teas arieeaeat imported and certain services provided by the
i a ; nded. The goods manufactured or imported under this
category are classified as either “sin products” (such as wines and
cigarettes) or “non-essential goods” (such il i
Soe ETE COeS g ( as automobile and minerals)
. The Train law levies a new excise tax on gross receipts derived
derived from performance of services on invasive cosmetic procedures,
surgeries and body enhancements directed solely towards improving,
altering, or enhancing the patient's appearance.
Types Excise Tax:
1) Specific taxes- Excise taxes based on the weight, volume,
capacity or any other physical unit of measurement of the
goods.
2) Ad valorem taxes - Excise taxes based on the selling price or
other specified value of the goods.
Taxpayers Liable to Excise Taxes
14) Manufacturers; and ;
2) Importers of any of the of the following categories of goods or
article: ;
= Distilled spirits such as liquors
= Wines
. ted liquors: (i.e. beer) .
u Ble products, cigars and cigarettes
= Automobiles
423
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Excise Teaes |
+ Manufactured oils and other fuels (ie., gasoline bunker fue!
oil) fe
it ilver); ant
Mineral products (i.e., gold, si
Non-essential goods (|e, Jowelrys perfumes)
Fireworks ry
it ic films
acts ard other vessels intended for pleasure or sports
Mineral products and quarry resources
surgeries and body enhancements
altering, or enhancing the
Invasive cosmetic procedures,
directed solely towards improving,
patient's appearance.
3)
Purposes of imposing excise taxes
4. To curtail consumption of certain commodities which are
dividual or to the community.
considered as harmful to the in A, .
To protect domestic industries from competition posed by similar
imported products. 7
3. To distribute the tax burden in proportion to benefit derived from a
particular government service.
“Importer”
Refer persons bringing goods into the Philippines, whether or not
made in the course of trade or business. Importation is not a sale of
goods, or sometimes not even a business activity, yet is subject to vat.
This is because vat is a consumption tax levied on sales to be borne
by consumers with sellers acting simply as tax collectors. Since the
origin of importation is from a foreign seller which is outside Philippine
jurisdiction, vat is instead paid directly by the importer.
TITLE VI OF THE TAX CODE —
EXCISE TAXES ON CERTAIN GOODS AND SERVICES CHAPTER |
Section 129 of the Tax Code, as amended, provides:
Excise taxes apply to goods manufactures i
Philippines for domestic sales or coneliinton Se any ober
disposition and to things imported as well as services performed in
the Philippines, The excise tax imposed herein shall be in addition
io the valie-added tax imposed under Title IV of the Tax Code, as
424 i
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ise Tax is also
Excl known as tax on the production, sale or consumption of
elapse mannose luding certain services, It is imposed on:
sale of consumption of food I the Philippines for domestic
* Goods imported: and” S°Y other disposition;
* Certain services
Invasive Cosmetic Proven the TRAIN Law, specifically
TYPES OF EXCISE TAX:
4. Specific Tax - refers to th
weight Or volume capacity canna tak mpowed which ia based on
or any other physical unit of measurement.
. Ad Valorem Tax — refers to the exci ir
. excise tax imposed which is based on
selling price or other specified value of the goodsfaricles.
MANNER OF COMPUTATION:
* Specific Tax = No. of Units/other measurements x Specific Tax Rate
* Ad Valorem Tax = No. of Units/other measurements x Selling Price of
any specific value per unit x Ad Valorem Tax Rate
MAJOR CLASSIFICATION OF EXCISABLE ARTICLES AND RELATED
CODAL SECTION:
4. Alcohol Products (Sections 141-143)
a. Distilled Spirits (Section 141)
b. Wines (Section 142)
c. Fermented Liquors (Section 143)
2. Tobacco Products (Sections 144-146)
a. Tobacco Products (Section 144)
b. Cigars & Cigarettes (Section 145)
c, Inspection Fee (Section 146)
3. Petroleum Products (Section 148)
4. Miscellaneous Articles (Section 149-150)
a. Automobiles (Section 149)
4 tial Goods (Section 150)
b. Non-essenit service (Section 180-A) - RA 10963 [TRAIN
Lam) yened Beverages (Section 150-B)(RA 10963 [TRAIN
Law])
425
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Sweetened
8. Swoetened emetic surgery (TRAIN la)
PERSONS LIABLE TO EXCISE TAX:
4. IN GENERAL:
a) On Domestic or Local Articles
* Manufacturer
: ererer person having possession of articles removed from
the place of production without the payment of the tax
b) On Imported Articles
+ Importer
= Owner : ;
= Person who is found in possession of articles which are
‘exempt from excise taxes other than those legally entitled to
exemption
2. OTHERS:
On Indigenous Petroleum
* Local Sale, Barter or Transfer
© First buyer, purchaser or transferee
= Exportation
° oe ler, lessee, concessionaire or operator of the mining
laim
TIME OF PAYMENT
= On domestic products -
cae pr is before removal from the place of
* Onimported products -
one Products - before release from the customs’
426
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DISTILLED SPIRITS, AD VALOREM & SPECIFIC TAX
Fira VALOREM TAK RATE - Based on the Net Reta
Pe (NAP) per root (excusing Be excise and VN) 15%
Scan
Php270.40 | _Php261.22 | _Pnp292.47
Php757.12 Php787.40 | _Pnp8is.s0_|
2) Stil wines and carbonated wines containing 14% of) Php30.00 Php31.20 Php32.45 Php33.75 \ Php3S.10 |x rate shall be increased by
1 4% every year thereafter
Php67.50 | Pnp70.20
3) Still wines and carbonated wines containing more!
14% (of alco by volume) but nt mare 25% of| "760-00 Pro62.40 | Prp64.90
Taxed as distilled spirits
427 FERMENTED LIQUORS , per liter of volume cay
) If the NRP (excluding excise and VAT) per liter of
[Effective 1/1/2018, the specific.
capacity is: | tax rate shall be Increased by
Php 50.60 and below Phpis.00 Phpi7.00__| Phpi9.00_| _Php2i.00 ‘Php23.50 "4% every year thereafter
More than Php 50.60, hp20.00 Php2i.oo | _Php22.00__|__Php23.00 Php23.50 a
Tf brewed and sold at microbreweries or small Effective 1/1/2014, the specific
Dabishments, such 25 pubs end’ restourenis|_Php28.00 Php29.12 | Php30.28 | — Php31.50 Php32.76 | tax rate shall be Increased by
‘4% every year thereafter
FAX RATES
|CASE OF FERMENTED LIQUORS AFFECTED BY THE "NO DOWNWARD RECLASSIFICATION " PROVISION, THE 4% INCREASE SHALL APPLY TO THEIR RESPECTIVE APPLICABLE|
'B. TOBACCO PRODUCTS
PARTICULARS
NEW TAX RATES based on Republic Act No. 10351,
Remarks 2018 onwards —
2013 | 2014 | 2015 2016 2017
‘TOBACCO PRODUCTS, per kilogram —
|. Tobacco Products ~ Z
(a) Tobacco twisted by hand or reduced into a condition to be| T a=
in any manner other than the ordinary mode of drying] Phpl.75. | Phpl.2 Pnpl.89 | Php1.97 Php2.05
curing 1 _ —
) Tobacco prepared or partially prepared with or without the i | | [Pffective 2/1/2014, the specific
‘of any machine or instrument or without being pressed or| PMP!75 | Phpl.62 | Phpl.89 | Php1.97 Php2.05 | tax rate shall be increased by
and | | | 4% every year thereafter
| | |
io) Fne-cut shorts and refuse, scraps, clippings, cuttings, stems,| Phpl.75 | Phpl.82 | -Php1.g9 | |
he iS . . | Prpt.s9 | Php1.97 | Php2.05
tobacco unsuitable for use in any other manner _| PRPL-SO | Phpl.S6 | Phpl.6z | Php1.68 | Php1.75
428
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429
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Scan INSPECTION FEE
P 0.50 per thousand pieces or fraction thereof
P 0.10 per thousand sticks or fraction thereof
P 0.02 per kilogram or fraction thereof
P 0.03 per kilogram or fraction thereof
EFFECTIVITY (RA 10963-TRAIN Law)
January 1, 2018 January 1, 2019 | January 1, 2020
hp9.00 Php10.00
Php8.00
(ONaphtha, regular gasoline, pyrolysis gasoline and other similar
rods of dtilato, por War ot vols oresinns oe Sm 99.00 pt0.00
430
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Php7.00
(n)Kerosene, per lter of volume capacity
Php3.00
Php4.00
Php5.00
(Aviation turbo jt fuel aviation gas, per IRer of volume capacty
[()Kerosene when used as aviation fuel, per ter of volume capacity
Php4.00
Php4.00
Php4.00
[(k)Diesel fuel ol, and on similar fuel ols having more or less the
same generating power, per liter of volume capacity
()Liquified petroleum gas used for motive power, per kilogram
(m)Bunker fuel ol, and on similar oils having more or less the same
]generating power, per liter of volume capacity
(n)Petroleum coke, per metric ton
Php2.50
Php4.50
Php6.00
(0)Liquitied petroleum gas, per kilogram
Phpt.00
Php2.00
Php3.00
(P)Naphtha and pyrolysis gasoline, when used as raw material in
petroleum products, or as replacement fuel for natural-gas-fired-
Jcombined cycle power pant, in lieu of lacally-extracted natural gas
[during the non-availability thereof, per Iter of volume capacity
[(q)Liquified petroleum gas, when used as raw material in the
Production of petrochemical products, per kilogram
(Petroleum coke when used as feedstock to any power generati
acity, per metric ton copay
Php0.00
431
Php0.00
Phpo.00
Scanned with CamScanner D. MINERALS AND MINERAL PRODUCTS:
PRODUCT TYPE
‘TAX RATES (RA 10963-TRAIN Law)
[Coal and coke (Domestic and Imported)
January 1, 2018 - Php50.00
January 1, 2019 - Php100.00
January 1, 2020 - Php150.00
and onwards
[Nonmetallic Minerals and Quarry Resources (Locally extracted or
produced)
ene ‘Minerals and Quarry Resources (Imported)
| Locally-extracted natural gas and liquefied natural gas
All Metallic Minerals (locally extracted or produced copper, gold, chromite
{and other metallic minerals)
Four percent (4%) based on the actual market value of the gross output thereof at the time of
removal
Four percent (4%) based on the value used by the Bureau of Customs (BOC) in determining tariff
‘and customs duties, net of excise tax and value-added tax
Exempt
Four percent (4%) based on the actual market value of the gross output thereof at the time of
removal
Imported copper, gold, chromite and other metallic minerals
[On indigenous petroleum
Four percent (4%) based on the value used by BOC in determining tariff and customs duties, net
of excise tax and value added tax
Six percent (6%) of the fair international market price thereof, on the first taxable sale, barter,
/exchange or such similar transaction, such tax to be paid by the buyer or purchaser before removal
from the place of production. The phrase "first taxable sales, barter, exchange or similar
transaction” means the transfer of indigenous petroleum in its original, state to a first taxable
‘transferee. The fair international market price shall be determined in consultation with appropriate
‘government agency,
For the purpose of this Subsection, “indigenous petroleum” shall include locally-extracted
mineral oll, hydrocarbon gas, bitumen, crude asphalt. mineral gas and all other similar or naturally
associated substances with the exception of coal, peat, bituminous shale and/or stratified mineral
deposits."
432
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NET MANUFACTURER'S PRICE/IMPORTER'S SELLING PRICE TAX RATES (RA 10963 (TRAIN Law)
‘OVER T UPTO _ RATE
0 | Php600,000 4%
‘Phip600,000 | 'Php1,000,000 10%
hpl,100,000 | Php4,000,000 20%
E hip4,000,000 I over i 50%
433
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‘© Twenty percent (2096) based on the wholesale price or the value of importation used by the Bureau of Customs in determining Tariff and Customs
Duties, net of Excise and Value-Added taxes
G. SWEETENED BEVERAGES (RA 10963-TRAIN Law)
‘PRODUCT
TAX RATE
Per Liter of Volume Capacity
ing purely caloric sweeteners, and purely nor Php6.00,
‘sweeteners, or a mix of caloric and non-|
sweeteners
purely high fructose com syrup or in| Phpi2.00
bination with any caloric or non-caloric|
Bengt
H. INVASIVE COSMETIC PROCEDURES - (RA 10963-TRAIN Law)
Performance of Services on Invasive Cosmetic Procedures
434
5%
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| Tax Remedies
A. TAX REMEDIES, DEFINED
1 crate art of the government, these are courses of action provided by or
2) On the part aay? plement the tax laws or enforce tax collection;
or ane Fart of the taxpayer, these are legal actions which a taxpayer can aval
seek relief from the undue burden or oppressive effect of tax laws, or as a
ea to check possible excesses by revenue officers in the performance of their
B, ASSESSMENT PROCESS
TAX AUDIT OR INVESTIGATION
The BIR conducts an audit by issuing Letter of Authority (LOA).
Letter of Authority ~ is an official document that empowers a Revenue Officer to
examine and scrutinize a taxpayer's books of accounts and other accounting records,
in order to determine the taxpayer's correct internal revenue tax liabilities. In the
absence of such an authority, the assessment or examination is a nullity. (CIR vs. Sony
Phils., Inc., 635 SCRA 234).
In the case of Medicard vs. CIR, G.R. No. 222743 dated April 5, 2017, the SC ruled that
“No assessments can be issued or no assessment functions or proceedings can be done
without prior approval and authorization of the Commissioner of the BIR or his duly
authorized representative through an LoA. The concept of an LoA is therefore clear
‘and unequivocal. Any tax assessment issued without an LOA is a violation of the
taxpayer's right to due process and is therefore "inescapably void”.
INS AUTHORIZED TO ISSUE LOA
TAXPAYER PERSON AUTHORIZED
Under the jurisdiction ofthe National Office Commissioner of Internal Revenue (CIR)
Under the jurisdiction ofthe regional ofices __ Regional Director
NEED NOT BE COVERED BY ANT ch fall \der the jurisdiction of th
hilo criminal tax fraud which fall under the jurisdiction of the
1) Gases involing “ation Division (NID) under the Enforcement and Advocacy
i f the BIR; and i
2) Bieeites ‘audit by the special teams in the National Office.
435
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EFFECT OF THE ISSUANCE OF LOA may be modified, changed or
tion filed by a taxpayer
A tax return, statement or declaration Hee © ering,
amended within three (3) years
,, statement or declaration
it vation of such tax return,
However, wen a | on or axe suctendment shall no longer be allowed,
The SC ruled in its decision in the case of Medicard vs. CIR, ae. es Ne dated
Tees Jon stat Letter Notice (LN) I entirely afferent and serves 0 Tee Potpose
Ban A LOA. Tels not found in the NIRC (Tax Code) and Is not 2 Aon ph-rsnd
an audit oF examination of the taxpayer leading to the issuance © Eistsy
assessments, Due process demands that after an, LN has eee a eat the
Fevenue oficer should have property secured an LOA before Proceeding hid
examination and assessment of taxpayer (RMC 75-2018).
ISSUANCE OF NOTICE OF DISCREPANCY (NOD)
RR 22-2020 dated Sept. 16, 2020
NOD replaces Notice of Informal Conference (NIC). Prior to NOD, the taxpayer shall
be informed, in writing, by the Revenue District Office or by the Special Investigation
nue Regional Offices) or by the Chief
Division, as the case may be (in the case of Reve Ir
of Division concerned (in the case of the BIR National Office) of the discrepancy or
discrepancies in the taxpayer’s payment of his internal revenue taxes for the purpose
of Informal Conference as required under RR 7-2018, in order to afford the taxpayer
with an opportunity to present his side of the case. NIC was replaced by NOD under
RR 22-2022 issued on September 15, 2020.
NOTICE OF DISCREPANCY (NOD)
Under RR 22-2020, if a taxpayer is found to be liable for deficiency tax or taxes in the
course of investigation conducted by a Revenue Officer, the taxpayer shall be informed
through a Notice of Discrepancy (NOD). The Notice of Discrepancy aims to fully afford
the taxpayer with fair opportunity to present and explain his side on the discrepancies
found. :
The Revenue officer who audited the taxpayer's records shali, among others, state in
the initial report of investigation his findings of discrepancies.
The NOD allows the taxpayer to present and explain his side on the discrepancies found
within five (5) days from receipt of the NOD (Basis: Annex A of RR 22-2020), Should
the taxpayer need more time to present other documents in response to the NOD, the
submission of documents may be extended for a period not exceeding thirty (30) days
from receipt of the NOD.
Failure on the part of the taxpayer to reconcile and present valid documentary support
against the noted discrepancies will result in the issuance of a deficiency tax assessment
through Preliminary Assessment Notice (PAN) covering the deficiency tax assessment.
ISSUANCE OF PRELIMINARY ASSESSMENT NOTICE (PAN)
PRELIMINARY ASSESSMENT NOTICE (PAN)
If after review and evaluation by the Commissioner or his duly authorized
representative, as the case may be, it is determined that there exists sufficient basis to
assess the taxpayer for any deficiency tax or taxes, the said Office shall issue to the
436
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show in detal the favee sessment
Notice (p,
the fay °AN) for the pr . Ml
the proposed assessment is pace” VES and regulations, or furispraconce on which
A PAN Is a communicatio
cat
‘Commissioner or hi n jssued by th
audited of the finding a, tuthorized represe Regional Assessment Division or by the
; 95 ofthe revenue ornee atve Informing a taxpayer who has been
The PAN shall be in writ
ti ing and shall
regulations or jurisprudence on whieh a {n detail the facts and the law, rules and
the assessment Is void, 'é proposed assessment is based, otherwise,
Asa general Fule, issua
the absence of which Tendon Prior to FAN is part of the “due process requirement”,
‘ugatory any assessment made by the tax authorities,
+ When the findin i Sec. :
cinputation ot hal any deficiency tax is the result of mathematical error in the
+ When a discrepaee 4S ‘pearing on the face ofthe return; or
amount actually rentttes pees, cetermined between the tax withheld and the
+ When a taxparercmtted by the withholding agen; or
withholding tare for (ceed t® claim a refund or tax credit of excess creditable
automaticaly app a taxable period was determined to have carried over and
for the taxable red the same amount claimed against the estimated tax liablities
when gatale quarter oF quarters ofthe succeeding taxable year; of
fen the excise tax due on excisable articles has not been paid; or
= When an article locally purchased or imported by an exempt person, such as, but
Not limited to, vehicles, capital equipment, machineries and spate parts, has been
sold, traded or transferred to non-exempt persons.
REMEDY OF THE TAXPAYER
‘The taxpayer has 15 days to reply contesting the finding in the PAN.
EFFECT OF FAILURE TO REPLY
The taxpayer is considered in default and the BIR will then issue a Final Letter of
Demand (FLD) and a Final Assessment Notice (FAN) calling for payment of the
taxpayer's deficiency fax liability, inclusive of the applicable penalties (RR 18-2013).
ISSUANCE OF FORMAL LETTER OF DEMAND (FLD) and FINAL ASSESSMENT
NOTICE (FAN)
the Commissioner or his duly authorized representative,
The FLD/FAN calling for payment of the taxpayer's deficiency tax or taxes shall state
the facts, the law, rules and regulations, or jurisprudence on which the assessment is
based; otherwise, the assessment shall be void (RR 18-2013).
The FLD/FAN shall be issued by
WHEN ISSUED? 7
ae to respond to the PAN; or
1) The taxpayer failed
3 The reply ‘o the PAN was found to be without merit.
Scanned with CamScanner Three (3) years from:
a acl filing of return; or
b. Deadline for filing
Return filed is not fraudulent Dende Ee
filed is FRAUDULENT; or
3 orem was filed “Ten (10) years from discovery.
REMEDY OF THE TAXPAYER
1) File a protest to the CIR or his authorized representative within 30 days from
TYPES OF PROTEST (RR 18-2013)
Request for Reconsideration . 4
Refer to a plea of re-evaluation of an assessment on the basis of existing records
without need of additional evidence. It may involve both a question of fact or of
law or both.
Request for Reinvestigation
Refer to a plea of re-evaluation of an assessment on the basis of newly discovered
or additional evidence that a taxpayer intends to present in the reinvestigation. It
may also involve a question of fact or of law or both. The taxpayer shall state in
his protest
a. The nature of protest whether reconsideration or reinvestigation, specifying
newly discovered or additional evidence he intends to present if it is a request
for reinvestigation;
b. Date of the assessment notice; and
©. The applicable law, rules and regulations, or jurisprudence on which his
protest is based, otherwise, his protest shall be considered void and without
force and effect.
from fili rest (in
2013
2) Submit all supporting
st for reinvestic
under RR.
FINAL DECISION ON A DISPUTED ASSESSMENT (FDDA)
If the BIR do not agree with the protest, then a Final Decision on Disputed Assessment
(FDDA) will be issued, where the taxpayer has the right to elevate the case to the CTA.
The decision of the Commissioner or his duly authorized representati 3
oe coscon ive shall state the:
a. Facts, the applicable law, rules and regulations, or jurispruden ich
suich decision is based, otherwise, the decision shal be wads ami ro
b. That the same is his final decision, '
DENIAL OF PROTEST
WAYS TO DENY PROTEST
1) Direct denial of protest
2) Indirect denial of protest ~ Ifthe CIR or his duly authorized representative falls to
act on the taxpayer's protest within 180 days f i
acton the tay pote YS from date of submission, the protest
438
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DIRECT DENIAL | Fieanc
ppeal
Cour
if
ject denia oF Tax Appeals (CTA) Dron win devs Ram ean
pea with te CTA Dhan win
‘Await the final dec: 30-day from the lapse of the 180 day period,
fal deco c the CIA CIR ris cy ured repeserave and appeal sich
{RR18-2013), ‘within 30 days after the receipt of a copy of such decision
DENIAL OF APP!
APPEAL BY THE CTA and Sc
INDIRECT
DENIAL
If the appeal to the CTA Divisi
days from receipt of the decision 's Aenied, file an appeal to the CTA en banc within 15
Section 222 of the Tax Code, as amended ~ EXCEPTIONS
, = AS TO PERIOD OF
LIMITATION OF ASSESSMENT AND COLLECTION OF TAXES.
Section 222(a). In the case of a false or fraudulent return with intent to evade tax or
of failure to file a return, the tax may be assessed, or a proceeding in court for the
collection of such tax may be filed without assessment, at any time within ten (10)
years after the discovery of the falsity, fraud or omission: Provided, That in a fraud
assessment which has become final and executory, the fact of fraud shall be judicially
taken cognizance of in the civil or criminal action for the collection thereof.
Section 222(c). Any internal revenue tax which has been assessed within the period of
limitation as prescribed in paragraph (a) hereof may be collected by distraint or levy or
by a proceeding in court within five (5) years following the assessment of the tax.
PRESCRIPTIVE PERIOD (Section 222 of the Tax Code)
In General Within 5 years from issuance of FAN.
Return filed is Fraudulent or Ten (10) years from discovery
No return was filed
NN ‘
The Biv can cle Selnquent internal revenue taxes through the following means:
1) Distraint- the seizure by the government of personal property, tangible or
eee ment of taxes.
intangible to enforce oe aarconal property Is physically seized by the BIR and
a. Actual a Me at public auction. The property is sold to the highest bidder
ee cae ‘eds of the sale are applied to the payment of the tax due.
an
Garnishment- Is the distraint of bank accounts.
— the person in| possession of personal property is
b. Constructive Distratnt - dertaking that he will preserve the property and
made ose 2 property without the express authority of Bureau of
will not dispose
Internal Revenue (BIR)-
439
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led of in the following cases:
Constructive dstralnt may or any business subject to tax
"He removes therefrom.
eres cen ‘obstruct the proceeding for collecting the
tax due or which may be due from him.
PERSON AUTHORIZED TO COMMENCE DISTRAINT. PROCEEDINGS
~PeRSOR AUTHORIZED
AMOUNT INVOLVE.
000 CIR,
a aE ee Revenue District Officcer
=
i
s
z
3
z
z
3
a
? i charges (ta
ime prior to the consummation of the sale, all proper charges (taxes,
eae aes) re pal to te oficer conducting the sale, the goods or
effects distrained shall be restored to the owner.
2) Lewy the seizure by the government of real properties and interest in or rights to
‘such properties in order to enforce the payment of taxes.
RIGHT OF REDEMPTION
For period of one (1) year from the date of sale, the property may be redeemed
by the taxpayer. During this period, the taxpayer is not deprived of the possession
and fruits from the property. If the taxpayer falls to redeem the property, a final
deed of sale is executed in favor of the buyer.
RIGHTS OF THE OWNER DURING THE ONE (1) - YEAR PERIOD OF REDEMPTION
During the one (1) year period of redemption, the owner shall not be deprived of
the possession of the said property and shall be entitled to the rents and other
income thereof until the expiration of the time allowed for its redemption.
3) it
a. Filing of civil case for collection
b. File a criminal case (Tax Evasion)
. COMPROMISE
GROUNDS
y ; gn doubt as to the validity of the claim against the taxpayer exists; or
re financial position of the taxpayer demonstrates a clear inability to le
assessed tax, —
Al criminal violations may be compromised except:
1) Those already filed in court; or :
2) Those involving fraud.
1) For cases of financial Incar
pacity, a minimum
percent (10%) of the basic assessed pei “Ompromse rate aque fof
2) For other cases,
the basic pedal eae Compromise rate equivalent to forty percent (40%) of
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1) Where the base me
2) Where the settee wo
ot VALUATION REQUIRED
tered ee ne million pesos (P1,000,000); or
's less than the prescribed minimum rates.
1) CIR
2) Four (4) Deputy Commissioners
GROUNDS
1) The tax or any portion thereof
2) The administration a
amount due,
appears to be unjustly or excessively assessed; or
lection costs involved do not justify the collection of the
The prescriptive MING OF STATUTE OF MMITATE
ma euEke ees esacomant and the beginning of distraint or levy or @
pee court lon of any tax deficiency may be suspended under the
a Tee request for reinvestigation was granted;
at Cannot be located in the address given in the return;
}) No property of the taxpayer can be located; or
4) The taxpayer is out of the country, :
NOTE: The suspension shall be for the duration of the situation plus 60 days thereafter.
In addition to the basic tax assessed on the ta the following civil penalties will
eet sxpayer, the following civil penalties wil
1) Surcharge
2) Interest
SURCHARGE
‘A 25% surcharge shall be collected in any of the following cases:
1) Failure to file any return and pay the tax due on time.
2) Fling a return with an intemal revenue officer other than those with whom the
return is required to be filed, unless authorized by the Commissioner of Internal
Revenue.
3) Failure to pay the deficiency tax within the time prescribed for its payment in the
notice of assessment.
4) Failure to pay the full or part of the amount of fay shown on any return, or the full
Count of tax due for which no return fs required to be filed
A shall be collected in any of the following cases:
1) Wilful neglect to file the return on time.
2) There is willful neglect if the taxpayer fil
the BIR.
les only after prior notice in writing from
‘There is simple neglect (25% surcharge) if the taxpayer voluntarily files the return after
the deadline without notice from the BIR-
441
Scanned with CamScanner Renedies i
Jent return:
ictions.
han 30%) Ce xable sales, recelpts or
than
dub
prima facie evidence of false or frau
1) Substantial overstatement (more tt
2) Substantial under deck
income.
terest the
mn wt an Increment on. any unpaid amount of tax, assessed from the date
prescribed for payment unt the amount 's fully pale,
sper to TRAIN Law - twenty percent (2078) Te
2 Upon effectivity ofthe TRAIN Law - @elve Pe
pet annum.
nt (12%) per annum.
eT deficiency tax due, which interest
1) Deficiency interest ~ Interest imposed on 2 u
’ shall pe assessed ‘and collected from the date prescribed for its payment until
(whichever comes fit
Full payment thereof; :
. Upon suance fs notice and demand by the Commissioner or his authorized
representative: ,
2) Delinquency interest ~ refers to interest imposed on the failure of the taxpayer
to pay the following:
a. The amount of tax
b. The amount of the tax
cA deficiency tax, or any surcharge or interest thereon on the due date
‘appearing in the notice and demand of the CIR or his authorized
representative until the amount is fully paid, which interest shall form part of
the tax.
due on any return required to be filed;
‘due for which no return is required; or
DOUBLE IMPOSITION of Interest
* Upon the effectivity of the TRAIN Law, in no case shall the deficiency and
delinquency interest be imposed simultaneously.
‘TAX DEFICIENCY VS. TAX DELINQUENCY.
‘TAX DEFICIENCY ‘TAX DELINQUENCY
The amount still due and | Failure of the tax
payer to pay the tax due on the date
Collectible from a taxpayer | fixed by law or indicated in the assessment notice
upon audit or investigation. | (FAN) or letter of demand.
1. REFUND OF TAXES
REQUISITES:
» Ata na erroneous or ilegally collected by the BIR;
Should file a written claim for refund or tax credit with the CIR
WITHIN
aay HIN TWO (2) YEARS from the DATE OF PAYMENT of the tax or penalty;
3) Ifthe claim for refur
ind is denied by th
3. Within 30 days trom oe I tea 7 petition for refund with the CTA:
b, Within,
‘we (2) years from the date of payment ofthe tax or penalty
442
Scanned with CamScanner The rules on Reme
Fecove,
1 ae ar COME while the APU VA can bef
Megi aN be found uns o” ecovery of und under Section
Section 2: Under Section 279," '™* erroneously or
revenue tax ayaa Fovides that in case of eo
of any penalty claimed to hace seOMEOUSYY oF legal” cr anY national internal
alleged to have been ererv® ben collected witiean assess or collected, or
taxpayer must fle a cain see OF In any manner quent, oF of any sum
payment of the tax or pen ith the CIR within two veers aay, collected, the
alt regardless of any spores (TOM the date of the
ing cause,
For-a claim based on
by the Supreme Court provides eroneois Payment of tax, various cases decided
a written claim filled by th r.
categorically demand for rei
of payment of the tax, Tursement; and (3) the taxpayer must show proof
Rules on the commencement of the 2-year period:
a. First, when the 7
aa ua dial hn ‘Sought to be refunded is ilegally or erroneously collected, it commences
tax was paid (Commissioner of intemal Revenue vs. Vieorias Miling, GR.
No. L-24108, Jan. 31, 1968). i shoe
Second, when the taxis paid only in instalments or only in par it
, nly in par, it commences from the date
the last or final instalment of payment was made, because for tax purposes, there is no
payment until the whole or entire tax Kai is fuly paid (Collector of Internal Revenue vs.
Prieto, G.R. No. L 11976, 29 Aug. 29,1964) :
c. Third, in case the taxpayer merely made a deposit, itis counted from the conversion of the
deposit to payment (Union Garment vs. Collector of Internal Revenue, CTA Case No. 416, 17
Nov. 17, 1958).
d. And lastly, in the instance that tax has been withheld from source, itis counted from the date
‘the withholding tax falls due at the end of the taxable year (Gibbs vs. Commissioner of Internal
Revenue, G.R. No. L-17406, Nov. 29, 1965).
REFUND OF INPUT VAT ON ZERO RATED (0%) SALE (Sec. 122 NIRC)
‘A vat registered person whose sales of goods, properties or services are
zero-rated or effectively zero-rated may apply for the issuance of a tax refund of
input vat attributable on such sales. The input vat that may be subject of the
vim shall exclude the portion of the input vat that has been applied against the
Satput vat. ‘The application should be fled within two (2) years aftr the close of
the taxable quarter when such sales were made (RR 13-2018).
rated sales under Secs. 106(AY(2)(a)(1) and (3), Secs.
soa«ey(a) 2nd 2 of evox code, the payments for the sales must have been
205(8)(1) and 2 rpeigncumency Gul accounted fr In acordance wth BSP
rules and regulations.
engaged in both zero-rated or effectively zero-
jag sales subject to final withholding vat) or
rated) sales ott) tara (Oe 7 crvices, and the amount of creditable input
exempt sales of g00ds, PE "rectly or entirely attributed to any one of the
vat due or pald cant nate share of input vat allocated to zero-ated or
transactions, only the POPS be claimed for refund or Ssuance of a tax credit
effectively zero ral
certificate (TCC).
‘Where the taxpayer Is
443
Scanned with CamScanner of, passenger and cargo by
ns}
In case of person ngage eon cE, the input vat shal be
air or sea vessels from the PhIIDPI aes and non-zero rated sales (sales
allocated rataby bere rpject to final vat withholding, and vat exempt sajes),
subject to regular rate, sul
ropriate Bureau of Internal
Claim for refunds shall be made with PRET OTE nue District Office
evenue Office Te vers Service (LTS)],
(R00) Ea rsditon ver the pincal place of business of the taxpayer,
Giaims for input vat refund of direct exporters shall be exclusively filed with the
laims for inj
VAT Credit Audit Division (VCAD).
i hall grant
1+ cases, the Commissioner of Internal Revenue s|
refund foreedtabe Input vat within ninety (90) days as ended une RA No,
10963-TRAIN Law, from the date of submission of the official er bat Fa ae
and other documents in support of the application filed. Provided, that should the
‘Commissioner find that the grant of refund is not proper, the Commissioner must
state in writing the legal and factual basis of the denial.
jinety (90) day period under the TRAIN Law to process and decide,
pending the eaabigiment @f the enhanced VAT Refund System shall only be up
to the date of approval of the Recommendation Report on such application for VAT
refund by the Commissioner or his duly authorized representative; Provided; that
all claims for refund/tax credit certificate filed prior to January 1, 2018 will be
governed by the one-hundred (120)-day processing period.
In case of full or partial denial of the claim for tax refund, the taxpayer
affected, may, within thirty (30) days from receipt of the decision denying the
claim, appeal the decision of the Court of Tax Appeals; Provided, however, that
failure on the part of any official, agent or employee of the BIR to act on the
application with the 90-day period shall be punishable under Section 269 of the
Tax Code, as amended,
Refunds shall be made upon warrants drawn by the CIR or by his
authorized representative without the necessity of being countersigned by the
Chairman, Commission on Audit (COA), the provision of the Revised Administrative
Code to the contrary, notwithstanding; Provided, that refunds under these
Paragraph shall be subject to post audit by the COA,
NOTE:
Due to the effect of Covidi9 pandemic, several revenue issuances were issued
by the BIR to suspend or extend the application of the 90. i
processing application for vat refund, TET
Scanned with CamScanner ‘Choose the letter of the correct answer,
1.
__is i
cries 9 too yor tocument that empowers a Revenue Officer to examine and
determine the taxpayers ped iat and other accounting records, in order to
a Lotter of Authorty (Loa internal revenue tax liabilities,
b. Letter Notice (LN)
¢. Preliminary assessment Notice (PAN)
d. Final assessment notice (FAN)
Pale ‘ A Bureau Of Internal Revenue (BIR) must issue an LOA prior to issuing a
Statement 2: Absence of a Letter o
thus, void.
a. Only statement 1 is correct
b. Only statement 2 is correct
c. Both statements are correct
d. Both statements are incorrect
f Authority makes the assessment unauthorized and
is issued if after review and evaluation by the Commissioner or his duly
authorized representative, as the case may be, it is determined that there exists sufficient
basis to assess the taxpayer for any deficiency tax or taxes.
a. Preliminary assessment notice (PAN)
b. Final assessment notice (FAN)
c. Final letter of demand (FLD)
d. Final decision on a disputed assessment (FDDA)
As arule, PAN is issued to a taxpayer as the first step in assessment. It serves as notice
that the taxpayer stil has some taxes due. PAN is issued when:
2. The taxpayer fails to file a return
b. The taxpayer files a retum but fails to pay the tax
c. Tax taxpayer pays the tax but the same is insufficient
d. Allofthe above
Preliminary assessment notice is not required in the following cases, except:
a. Tax deficiency is due to mathematical error
b. Tax deficiency is due to unpaid VAT
©. Tax deficiency is due 0 unpaid excise taxos
d. Tax deficiency is due to withholding tax
445
Scanned with CamScanner 6.
Kemedies
lement of a due
Aiton rotce and demand by the BIR onthe taxpayer fr the set tax
liability that is there definitely set and fixed-
a. Assessment
b. Forfeiture
c. Audit engagement letter ;
d. Institution of criminal action
re-asses tice is required
; ‘ ‘iar cinropate bas Dae determined between the amount of sales declared ang
the seller’s customers. ;
b. redeploy bd determined between the tax withheld and the amount
ly remitted by the withholding agent.
c tien " article iealy purchased or imported by an exempt person has been sold,
traded or transferred to non-exempt persons. | '
d. When the deficiency tax is the result of mathematical errors in the computations
‘appearing on the face of the return.
‘Statement 1: The formal letter of demand (FLD)/final assessment notice (FAN) shall be
issued by the Commissioner or his duly authorized representative,
Statement 2; The FLOIFAN calling for payment of the taxpayer's deficiency tax or taxes
shall state the facts, the law, rules and regulations, or jurisprudence on which the
assessment is based; otherwise, the assessment shall be void.
a. Only statement 1 is correct
b. Only statement 2 is corect
©. Both statements are correct
d. Both statements are incorrect
Which of the following statements is not true?
3. Ifa taxpayer is aoquited in a criminal violation of the Tax Code, this acquittal does
Not exonerate him from his civil liability to pay the taxes,
. A conviction for tax evasion isnot a bar for collection of unpaid taxes,
G. A tax assessment is necessary to a criminal prosecution for wilful attempt to defeat
and evade payment of taxes.
4. Criminal proceedings under the Tax Code is now a mode of collection of intemal
revenue taxes, fees or charges.
Where a tetum was fled, as a general ule, the prescriptive period for assessment ater
the date the return was due or was filed, whichever is later, is within
a Theeyears Five years
b. Ten years d. Answer not given
446,
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oil . Based on the preceding nu
|. Mr. Aseasonably filed a
tare
a. October 15, 2026 tensions to file due to the Covid-19 pandemic)?
b. October 15, 2024 d baie ih ted
.. Donor's tax return for a donation made or
Last day for BIR to assess ig ny ooo” MUAY 15, 2020 was fled on January 31,2020,
a Fouay 28, 2023 ©. February 14, 2023
b. January 31, 2023 4. January 15, 2023
mee but assume the return fled was fraudulent and was
. The last day for BIR to assess is on?
©, February 14, 2030
d. March 31, 2030
discovered on March 31, 2¢
a, February 28, 2030
b. January 31, 2030
protest and submitted supporting documents with the BIR. Within
how many days shall the former await the decisi t
protest has been indirectly donne le decision of latter before he assumes that the
a. 180 days ¢. 60 days
b. 90 days ’ d. 30 days
. Ifthe taxpayer did not file a return, what is the Prescriptive period for the issuance of Final
Assessment Notice?
a. Three (3) years counted from the time of filing or deadline whichever is earlier
b. Three (3) years counted from the time of filing or deadline whichever is later
c. Ten (10) years counted from the time of filing or deadline for fing whichever is
later
d. Ten (10) years counted from the daté of discovery by the Bureau of Internal
Revenue that no return was filed.
. Omega Corporation received a notice of assessment and a letter from the BIR demanding
the payment of P3 million pesos in deficiency income taxes for the taxable year 2018. The
financial statements of the company show that it has been suffering financial reverses. Its
asset position shows that it could pay only 500,000.00 which it offered as a compromise
to the BIR. Which among the following may the BIR require to enable it to enter into a
ise with Omega?
a omega must show ithas faithfully paid taxes before,
b. Omega must promise to pay its deficiency when financially able,
© Omega must waive its right to the secrecy of its bank deposits,
Omega must immediately epost the P500,000 with the BIR
‘e-evaluation of an assessment on the basis of existing
of re
records Aiotnoatel Pina ‘evidence. It may involve a question of fact or of law or
both,
a. Formal letter of demand
b. Preliminary assessment notice
c Request for reconsideration
d. Request for re-investigation
447
Scanned with CamScanner Remedi 5
refers to a plea of re-evaluation ofan sees ea
” “eeovered or edliona evidence that a taxpayer intends 0 pre ;
itmay invlve a question of factor of ew oF both.
a, Formallettr of demand.
b. Preliminary assessment notioe
€. Motion for reconsideration
. Motion for einvestgation
in his protest: ; ;
a bsp eeblpesrel vate reoonsideration or investigation, specifying ty
* Giscovered or additional evidence he intends to present if it Is @ request for
reinvestgation,
. Date of the assessment notice : ae
c. The applicable law, rules and regulations, or jurisprudence, on which ‘his protest is
based,
4. Allofthe above
. As a rule, within what period must a taxpayer elevate to the Court of Tax Appeals a denial
of his application for refund of income tax overpayment? =
Within 30 days from receipt of the Commissioner's denial of his application for refund,
. Within 30 days from receipt ofthe denial which must not exceed 2 years from payment
of income tx.
. Within 2 years from payment ofthe income taxes sought to be refunded.
4. Within 30 days from receipt ofthe denial or within two years from payment.
What i the effect on the tax liability ofa taxpayer who does not protest an assessment for
deficiency taxes?
a. The taxpayer may appeal his liability to the CTA since the assessment is a final
decision ofthe Commissioner on the matter.
b. The BIR could already enforce the collection of the taxpayer's liability fit could secure
authority from the CTA.
©. The taxpayer’ lability becomes fixed and subject to collection as the assessment
becomes final and collectible.
4. The taxpayer’ lability remains suspended for 180 day ira
mite pe YS from the expiration ofthe
. The taxpayer ‘seasonably filed his protest together with all the suy tir
ipporting documents. Itis
ateady Uy 31, 2021, of 180 days from submission of the prove but te BIR
Commissioner has not yet decided his protest. Desirous of an early resolution of his
te ‘
lped assessment, the taxpayer should file his appeal tothe Court of Tax ‘Appeals not
a. August 31, 2021
b. August 30, 2021
©. August 15, 2021
August 1, 2021
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23. Mr. Alvarez is engaged in the retail busi
from the BIR containis business. He received a defc nt
wihout any explanation of he eoputton Of the decency aoe oa the penales,
aseessment al? « I and legal bases for the assessment. Is the
a asses is lid:
bo theakenane ea Alvarez has to Know i the amount ofthe tax.
wi the assessment is based. Tequires a statement of the facts and the law upon
c. . The assessment is valid . .
d. The assessment is Fant He. Alvarez can sil contest
computation is eroneeee® Pe2U8e Mr. Alvarez has no way to detemine if the
24, Which among the following ci oe :
correctness of a BIR aoe negates the prima facie presumption of
a. The BIR assessment was seasonabl ithit i
- ly protested within 30 days from receipt.
b. No preliminary assessment notice was issued prior to the assessment notice.
c. Proof that the assessment is utterly wit ion, arbit 4
: 8 ly without foundation, arbitrary, and capricious.
4, The BIR did not include a formal letter of demand to pay the alleged deficiency.
25. Whatis the effect on the tax liability of a taxpayer who does not protest an assessment for
deficiency taxes?
a. The taxpayer may appeal his liability to the CTA since the assessment is a final
decision of the Commissioner on the matter.
b. The BIR could already enforce the collection of the taxpayer's liability ifit could secure
authority from the CTA. .
c. The taxpayers liability becomes fixed and subject to collection as the assessment
becomes final and collectible.
d. The taxpayer's liability remains suspended for 180 days from the expiration of the
period to protest.
26. Statement 1: A tax due from the taxpayer whose amount does not justify the expenses to
be incurred in collecting it may be compromised.
.s¢ of false or fraudulent return with intent to evade the tax, assessment
maybe ly made ‘onthe 10° year from discovery thereof and collection may be effected
within five (5) years thereafter.
a, Both statements are correct
b, Both statements are not correct
¢. Only the first statement is correct
d. Only the second statement is correct
, ‘withheld as shown on the tax return and the actual tax remitted
a. Simoni Wie Ee to the Bureau of Inferal Revenue (BIR) do not match, a final
y the wil .gsment (FAN) may be issued without need of a pre-assessment notice.
notice of asses=T xpayer who fled a protest case has 180 days from the fling of the
Statement 2: The tigation to elevte an appeal to he Cou of Tax Appeals (CTA)
writen enue ler of neal Revene (CRs acon he potest
‘a Both statements are cored!
449 <
Scanned with CamScanner 28. Albert received a final assessment n
30.
3.
Remedies
is correct
¢. Only the first statement is core
d. Only the second statement is correct
" IR on October 30, 2019, He
tice (FAN) from the BIR :
submitted his protest and the supporting documents a ele? prescribed by the Law,
‘After 180 days, the subsequent slepis availabe to him shall De:
ing inaction of the CIR, within 30 days
n appeal to the CTA, alleging ina 5
Rain cay areas ‘submitted the supporting documents on his protest,
Il, Wait for the decision of the Commissioner ‘of Internal Revenue(CIR) and if adverse,
appeal the case befor the CTA within thy days.
a. lonly b.llonly c.land ll d.lorll
The taxpayer seasonably filed his protest together with all the supporting documents, Itis
1480 days from submission of the protest but the BIR
aes nea "ye decided fis protest. Desious of an early resolution of his
protested assessment, the taxpayer should fil his appeal to the Court of Tax Appeals not
later than:
a. August 31, 2021
b. August 30, 2021
c. August 15, 2021
d. August 1, 2021
Spanflex Int! Inc. received a notice of assessment from the BIR. It seasonably filed a
protest with all the necessary supporting documents but the BIR failed to act on the protest.
Thirty days from the lapse of 180 days from the fling of its protest, Spantlex stil has not
elevated the matter to the CTA. What remedy, if any, can Spanflex take? (2011 Bar
Question)
2. _Itmay fle a motion to admit appeal if it could prove that is failure to appeal was due
to the negligence of counsel,
b. _ltmay no longer appeal since there is no BIR decision from which it could appeal
c. It may wait for the final decision of the BIR on his protest and Hit TA
within 30 days rom receipt of such decison, 7 SPPRAIit To the C
d. None. Its right to apipeal to the CTA has Prescribed.
The running of the prescriptive period for assessment is suspend:
led, except:
a. When the taxpayer requests for a teinvestionin’ one
Commissioner oneal Revenue," ™=st9a¥0n which fs granted by he
b. When fe lnayeris ut ofthe Philippines;
©. When the warrant of ‘
babs etek listraint has been duly served pon the taxpayer and no property
4. Ifthe taxpayer informs the Commissioner of any change in address,
Scanned with CamScanner 37.
. Which of the following prescript
Remedies
im,
by y the taxpayer. Statement or declaration filed by a taxpayer may be modified
nt 2: Wh
deckaraon hasbeen cee sate or invesigaton of axretum sateen ot
no longer be allowed. ved upon the taxpayer, amendment of such return shall
a ments 1 and 2 are false :
e eure yok bul statement 2s fale
st
Statements and 2 ara tac et 8
.. Statement 1: A tax retur
. wi of the following statements is incorrect?
The prescriptis i
a cue fast itd Period of three (3) years commences to run after the date the return
b. Ifthe retum A hedteehe, {4 ong or fle, wchever comes ter,
ony om such est day, \¢ last day for filing, the prescriptive period begins to run
c. Ifthe return is filed after the last d i
the day he reumisfied due date, the period shall be counted from
4. i a retum was amended substantially, the period stars from the due date of the
Zenaida filed her 2020 Income Tax Retum (ITR) on Apsll 10, 2024 (ignore several
extension dates due to the Covid-19 pandemic). On June 20, 2021, she filed an amended
return which is substantially different from the original return. The last day to telease, mail
or send an assessment is-
a. April 10, 2024 c, June 20, 2024
b. April 15, 2024 d. June 20, 2026
|. Which of the following rules governs the prescription for violation of the Tax Code?
4s Rule: Prescription starts from the day the law is violated and if the same is not known,
prescription starts from the discovery of violation thereof.
‘2rd Rule: All violations of any provision of the Tax Code shall prescribe after 10 yrs.
a. Both rules are correct
b. t#rule wrong, 2” rule correct
c. both rules are wrong
d. tsrule correct, 2r¢ rule wrong
ive period for the BIR to conduct a tax audit is correct?
a. Ten (10) years when no return is fled
b. Ten ta a when return filed is false or fraudulent :
c. Three (3) years from actual filing of return or from the deadline for filing if the return
filed is not fraudulent.
d. Allofthe above
; ‘ax Retum and paid the tax due thereon on April 1,-2021
Herein fled er 2020 none 4-19 pandemic), The last day forthe Bureau
M ‘4 to the Covi
(ignore several extension dates: Sera is
an ai
of Internal Revenue to ser 2 ar 15, 2024
il 1, 2024 . Apri
b net 5, 2008 . April 15, 2031
451
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2020 on May 2, 2021. After an
Prclent. The last day for the BIR ty
38. Apolonio fled his Income Tax Retum (ITR) fr taxable
Ivestgaton, kas
send an assessment:
5
a. April 15, 2024 . May 2, 202
b. way, ae d. April 15, 2025
discovered that the tax paid was del
ree
xpayer following informal
: Mar. 28, 2019
Date of fling the Income Tax Retum: oe
Date assessment was received:
Request for reinvestigation was filed: July 4, 2021
39. The last day for the taxpayer to submit relevant supporting documents is
2. September 4, 2021 ., September 2, 2021
b. July 20, 2021 d. April 15, 2022
i it ting his motion on August 26,
40. Assuming that the taxpayer submitted the documents suppor
2021. The Bureau of Intemal Revenue should act on the protest not later than
a. September 26, 2021 c. February 26, 2021
b. April 15, 2022 d, February 22, 2022
41. Based on the preceding number and assuming that the BIR did not act on the protest, the
last day forthe taxpayer to appeal to the Court of Tax Appeals (in case he opted to elevate
the case to the CTA after indirect denial) is
2. March 22,2014, March 23, 2014
b. March 24,2015 d. April 15, 2016
42. A taxpayer received an assessment notice on January 5, 2021. He files a motion for
‘reconsideration with the BIR on January 15, 2021. Whenis the last day for the submission
of complete documents to support his motion for Teconsideration?
a. February 4, 2021 ¢. January 15, 2021
b. March 16, 2021 4. Not required to submit
43, Statement 1: In the event the taxpayer fails to submit within 60 days the relevant
Supporting documents for a request for, ‘einvestigation, the assessment shall become final
and executory.
Statement 2: All decisions on Protest to the FAN, whether th ta is
accepted or denied partially or wholly, shall be Pannneeie the Boca tan he
Issuance of a Final Decision on Disputed Assessment (FDDA).
@. Only statement 1 is correct
b. Only statement 2is correct
©. Both statements are correct
d. Both statements are incorrect
452
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44, Statement 1: All Protests shall
‘oar be considered 7 i lose said
protest clearly indicates that the request is for fot DB rneeionn unless
‘Statement 2: pet:
After the scenes UP envestigaton shall be available in a protest fo FAN/FLD only,
the taxpayer as a remedy A, request for reinvestigation shall no longer be available to
a. Only statement 4 is correct
b. Only statement 2 is correct
¢. Both statements are correct
d.- Both statements are incorrect
45. A taxpayer disclosed the following information:
Date of filing 2018 ITR May 12, 2019
Received assessment of deficiency income tax ‘October 10, 2020
Protest was filed October 30, 2020
Submission of supporting documents December 5, 2020
Received denial of protest April 20, 2024
The last day to appeal the decision of the BIR to the Court of Tax Appeals is
a. June 4, 2021 c. May 19, 2021
b. May 20, 2021 d. June 20, 2021
46. The term “the assessment shall become final” shall mean:
‘a. The taxpayer is barred from disputing the correctness of the issued
assessment by introduction of newly discovered or additional evidence.
b. No request for reconsideration or reinvestigation shall be grated on
assessment that has become final, executory and demandable.
c. Both ‘a’ and *b”
d. Neither “a” nor “b"
47, Mang Ben filed an income tax return for the calendar year 2020 on March 10, 2021. The
BIR issued a Formal Letter of Demand/Final Assessment Notice on April 10, 2024 which
has become final, executory and demandable. When is the last day for the BIR to collect?
a. April 10, 2028 c. April 15, 2024
b. April 15, 2022 d. March 10, 2022
48. Which of the statements regarding collection of tax assessment is /ncorrect?
|. Within five (5) years from assessment
II, Within ten (10) years in case there is no assessment and in case of false or
fraudulent returns with intent to evade the tax.
a. lonly b, Both | and Il
c. Honly d. Neither | nor II
49, The property ofa delinquent taxpayer shall nat be placed under constructive distraint by
the Commissioner of intemal Revenue if in his opinion the taxpayer is,
a. Retiring from any business subject to tax;
b. intending Toloave the county orto remove his propery therefrom;
453
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56,
°
a.
Acar dealer could not pay his tane® Or tof the taxes. Whi
Renee
the assess the tax due,
1 possible egal means to dispute the ASME ry
Ruin al ne ng obs be proces ‘
The dealer delivered several units of the
on sales, ich of the following
cat to the Bureau of Intemal Reven
statements is correct?
b.
©
a.
A contract whereby the taxpayer at
is isa valid payment ofthe tax.
THis fc eaectns of th tax by distant.
This isa valid forfeiture of property.
Tris no a valid procedure for collection of @t2X-
nd the government by reciprocal concessions avoid a
tigation or put an end to one already commenced
a
b
2. One of the following violations cannot be subject
a
b
e
a.
Confiscation c. Distraint
Compromise <, Suspension
to compromise?
Fale to keeppreserve books of accounts and accounting records.
ir i lish.
Failure to books of acoounts or records in a native language or Engl
Failure to Nee books of accounts audited and have financial statements attached to
income tax retum certified by independent CPA
Keeping two sets of books of accounts or records.
Statement 1. The Commissioner of Internal Revenue is authorized to inquire into the bank
deposit ofa taxpayer who has filed an application for compromise of his tax lability by
reason of financial incapacity to pay.
Statement 2. A compromise for a tax lability on the ground of financial incapacity to pay
shall still involve a payment of tax from the taxpayer at a minimum compromise rate of 10%
of the basic assessed tax.
a
b.
©
4.
First statement is true while second statement is false.
First statement is false while second statement is true,
Both statements are true.
Both statements are false.
Fortuna Hotel Inc, using calendar year accounting period, overpaid its 2020 second
{uarter income tax andi failed to correct the said overpayment on the computation ofits
‘Annual Income Tax. How shall the taxpayer recover the excess tax paid?
a. File a claim for refund with the BIR within three (3) years from August 29, 202
. File a claim fr rfund withthe BIR within three & Years fom Apt 15,2024 7
6. Flea clei for refund wit the BIR within two (2) years from August 29, 2020.
4. File claim or refund wi the BIR within to (2) years fom Apa 15, 2021
Where any national intemal revenue taxis all
coleced by the BR, he axpayer shoud : ee to have been erroneously or illegally
aes
File a claim for refund or credit with the CIR
File an action for refund with the RTC
File an action for réfund with the CTA
‘Answer not given
454
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6.
Remedies
From the date of pa
YyMent, claim for
penalties imposed refund of e a
a. 2years thou ane must be fed cane eee ce
years years .
ee 4.7 years
The last day for the tay
a. Two (2) years om edn
b, Two (2) years from the date f final payment.
é ive (5) years from the date of frst instalment payment
d. Five (5) years from the date of second installment, payment
Fefund i the tax was paid in installment is
rst installment payment.
. As a general rule, within what period must a taxpayer elevate to the Court of Tax Appeals
a denial of his application for refund of i
income tax overpayment?
fF Mid sens om receipt of the Commissioner's denial of his application for refund.
witha tas rom receipt of the denial which must not exceed 2 years from payment
c. Within 2 years from payment of the income taxe:
it " s sought to be refunded.
d. Within 30 days from receipt of the denial or within two years from payment.
._ In-case of full or partial denial of the written claim for refund or excess input tax directly
attributable to zero-rated sales, or the failure on the part of the Commissioner to act on the
application within 120 days from the date of submission of complete documents, an appeal
must be filed with the CTA:
a. Within thirty (30) days after filing the administrative claim with the BIR;
b. Within sixty (60) days after filing the administrative claim with the BIR;
c. Within one hundred twenty (120) days after filing the administrative claim with ‘the
BIR;
d. Within thirty (30) days from the receipt of the decision denying the claim or after the
expiration of the 90-day period under the TRAIN Law.
|. Statement 1: The filing of quarterly income tax returns and payment of quarterly income
tax by corporations are mere installments and therefore, not the basis in computing the
two-year prescriptive period for refund.
Statement 2: If the tax has been withheld from source (withholding on wages), the
prescriptive period for refund is counted from the date it falls due at the end of the taxable
ear.
f First statement is true while second statement is false.
b. First statement is false while second statement is true.
. Both statements are true.
d. Both statements are false.
‘Amount of tax per ITR 30,000
Withholding tax 20,000
1 installment payment March 28, 2020
2» installment July 1, 2020
455
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@. March 28, 2022 ¢, July 1; 2022
b. Apri 15, 2020 d. July 4, 2025 -
662. The following information was disclosed to you: :
Erroneous payment of tax April 15, 2020
Claim for refund was fled Feb. 18, 2021
Receipt of BIR decision denying claim for refund July 5, 2024
The last day to appeal to the Court of Tax Appeals is -
a. August , 2021 . August 6, 2021
b. August 4, 2021 dd. April 15, 2022
63. Which statement is correct?: In case of a tax erroneously collected. ;
@. A.case for refund may be filed with the court simultaneously with the fling of a claim
for refund with the Bureau of Intemal Revenue.
b. A case for refund may be filed with the court even without fling a claim for refund
with the Bureau of Intemal Revenue,
© A claim for refund must first be filed with the Bureau of Intemal Revenue and a
decision of the Bureau must, under any circumstance, be awaited before a case for
refund may be filed with the cour.
4d. A-claim for refund must frst be filed with the Bureau of Intemal Revenue and, in a
given situation, a case for refund may be fled with the court without awaiting the
decision of the Bureau.
64. Statement 1, The Commissioner may refund a tax even without a claim for refund from
the taxpayer where on the face of the return upon which the payment was made, such
payment clearly appears to have been erroneously made.
Statement 2. No sult or proceeding shall be brought for refund of tax after two years from
the date of payment, regardiess of any supervening cause that may arise after payment,
@. Both statements are correct. :
b. Both statements are wrong. :
©. Fist statement is correct while second statement is wrong,
d. First statement is wrong while second statement is correct.
CIVIL PENALTIES - 25%; 50% Surcharge
65. In addition to the basic tax assessed on the taxpayer, the following civil penalties will also
be collected:
1. Surcharge
Hl. Interest
a. lonly . Both land Il -
b. llonly d. Neither | nor I
66. In which of the following shall a 25% surcharge be collected?
|. Failure to file and pay the tax due on time
| Willful neglect to file the return on time
UL. Filing of tax return after prior notice in writing from the BIR
a. lonly ¢. Vand Ill only
b. Land Il only . I, and il
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70.
Tr
Tl:
3, In which of the fol
a.
Remedies
In which of the followi shi
* all a 5(
i ine ng ofl rae be collected?
‘ X retur gad
II Failure to file 1 Prior notice in writing f
a. Land Il only and pay the tax due on time. 2 ote BR
b. Land Il only gil ei
eh Mar
Fn alum war afe 2 Shap bo cole
an fit ‘evenue officer other than those with whom the retum
* eng ee by the Commissioner of internal Revenue.
' tax within the time prescribed for its Payment in the notice
c. Failure to pay the full
OF part of the amount of tax sho the full
amount of tax di i m of tax shown on any return, or the ful
4. Alofthe above” Heh no retumis equed tobe ed
is required to be filed,
b. Failure to pay the def
of assessment,
|. Statement 1: There is sit
imple negh i
deadline without noice ll fa : = if the taxpayer voluntarily files the return after the
Statement 2: The applicable surcharge in state 4
a. Only statement 1 is correct atleieaaincil aie
b. Only statement 2 is correct
¢, Both statements are correct
d. Both statements are incorrect
Statement 1: Overstatement of more than 30% of allowable deductions is a prima facie
evidence of false or fraudulent return.
Statement 2: The applicable surcharge in statement 1 shall be 50%.
a. Only statement 1 is correct
b. Only statement 2 is correct
c. Both statements are correct
d. Both statements are incorrect
Statement 1: Under declaration of more than 30% of taxable sales, receipts or income is
it ie evidence of false or fraudulent return.
Scere 2 The applicable surcharge in statement 1 shall be 50%.
a. Only statement 1 is correct
b. Only statement 2 is correct
c. Both statements are correct
d. Both statements are incorrect
civil penalty of 50% ofthe basic taxis imposed in case of -
a. Failure to fle the retum on time.
b, Filing the return with unauthorized revenue officer.
5 the return on time, :
al ia ne eoency tax within the time prescribed for payment.
457
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il or 50% imposed by the
73 In which of the following cases vihore the civil penalties of 25%
Tax Code is not applicable .
Tee pease a ase or raudulnt return switfly made. 1
Failure to pay the full amount of fax shown on y
the law. de.
i the tax 00 :
Failure toile certain information required BY ae psity BO.
a Failure ‘or wilful neglect to file the tax return within the period pr yy
ired to be filed under
Computation of Deficiency and Delinquency Interest
74, Deficiency interest imposed on any deficiency tax due, shall be assessed and collected
from the date prescribed for its payment until:
a. Full payment thereof. ;
b. Upon issuance of a notice and demand by the Commissioner
representative. oo
c Fal payment thereof or upon issuance of a notice arid demand by the Commissioner
ot his duly aithorized representative, whichever comes first. .
d. Full payment thereof or upon issuance of a notice and demand by the Commissioner
or his duly aithorized representative, whichever comes later.
or his duly aithorized
75. Delinquency interest is imposed on the failure fo pay:
a, The amount of the tax due on any retum tobe filed.
b. The amount of the tax due for which no retum is required. .
thereon on the due date appearing in the
c. Adeficiency tax or any surcharge or interest t
notice and demand of the Commissioner or his duly authorized representative unti
the amount is fully paid, which interest shall form part ofthe tax.
d.Allofthe above
76. The rate of deficiency and delinquency interest upon the effectivity of the TRAIN Law is:
Deficiency interest Delinquency interest
a 12% 20%
b. 20% 12%
c 12% 12%
d. 20% 20%
77. Statement 1: Double imposition of both deficiency and delinc ir ig ic
under Sec. 249 of the Tax Code prior to its ance ere pao RANI Ie
Siatement 2: Upon effectivity ofthe TRAIN Law, in no case shall the deficiency and
delinquency interest be imposed simultaneously. es
a. Only statement 1 is corect
b. Only statement 2 is correct
c. Both statements are correct
d. Both statements are incorrect
78. The enhanced VAT refund system under the TRAIN law provides that:
a. Input Vat refund shall be granted ith
ecaton ik ha Sa a Pld win G0 days fom te fling of vat refund
458
Scanned with CamScanner b. The. 90 day petiod to Renelles
application/clai Process and decide shall i
c. The dainfapncngs 4 UP othe recat of he payment teva eae
official receipts or in 'S Considered to have been filed ‘only upon submission of the
prescribed under pe toes a other documents in support of the application as
4. Allofthe above nue Inauerices,
79. Which of the followit 7
input taxes under eA Pertaining to the period within which refund/credit of
a.
afk hall be made?
te descr hal eat refund for creditable input taxes within 90 days from
application fied, of receipts or invoices and other documents in support of the
‘The 90 day period to process and deci it i
cide shall start from the filing of the claim up to
tre release of the payment ofthe vat refund. =
¢, Incase of full or partial denial of the claim for tax refund, the taxpayer affected, may,
on days from receipt of the decision denying the claim, appeal the decision to
dd. Allof the above.
80. Statement 1: The prescriptive period for filing a judicial claim for refund for erroneously
paid tax (including erroneously paid input vat, if applicable) under Section 229 of the Tax
Code is 2 years from the date of erroneous payment.
‘Statement 2: The refund of input vat under Section 112 applies in the case of a taxpayer
who is engaged in zero rated sale or effectively zero rated sale.
a. Only statement 1 is correct
b. Only statement 2 is correct
c. Both statements are correct
d. Both statements are incorrect
Statement 1: Under Section 112 ofthe Tax Code, the claim fr refund or credit of unuilized
input vat must filed within two (2) yeas efter the dose ofthe taxable quarter when the
seecan 2 a refund of input vat under Section 112 applies in the case ofa taxpayer
who is engaged in zero rated sale or effectively zero rated sale,
a. ‘Only statement 1 is correct
b. Only statement 2 is correct
c. Both statements are correct
d. Both statements are incorrect
‘ed in a relail business. He received a deficiency tax assessment from
ly the computation ofthe deficiency tax and the penalties, without
factual and legal bases for the assessment. Is the assessment
8
82. Mr. Alvarez is engag
the BIR containing on!
any explanation of the
ae is valid; all that Mr. Alvarez has to know is the amount of the tax.
b The aseeesrert ig invalid; the law requires a statement of the facts and the law
: pam which the assessment based,
c. The assessment is valid but Mr. Alvarez can still contest it.
Scanned with CamScanner 4, The itis invalid because Mr. Alvarez has no way to determine if the
|, The assessmer
‘computation is erroneous. :
compromise a tax liability:
nai, putt for other taxes.
of the assessment.
ed 10% of the basic tax.
ation Board.
83. Jeopardy assessment isa valid grou
2. _ Involving deficiency income taxes
b. Because of doubt as tothe validity
Joes not excet
. Ifthe compromise amount hie “the National Eva
d.__ only when there is an appro
84. In 2020, pursuant to a Letter of Authority (LOA) issued by the Roijoral Disc Pedro
veg ascecced deficiency income taxes by the BIR for the year 2019. He paid the
delicency. In 2021, Pedro received another LOA for the same year 2019, this time, form
the National Investigation Division, onthe ground that Pedro's 2049 return was fraudulent,
Pedro contested the LOA on the ground that he can only be investigated once in a taxable
year. ls Pedro's contention correct? ; ;
fe can only be re-investigated once in taxable year.
a. Pedro's contention is corect. H b ce in te
b. Pedro's contention is not correct. Subjecting a taxpayer to reinvestigation for the
same taxable year is at the sole discretion of the Commissioner.
c. Pedro's contention is not correct; he may be re-investigated because he filed a
fraudulent tax retumn for 2019. Section 235 of the Tax Code provides that the books .
and records of taxpayers may be examined and inspected only once in a taxable year,
except in cases of fraud, imegulaity or mistakes, as determined by the Commissioner.
d. None of the above
When a BIR decision affirming an assessment is appealed to the CTA, the BIR's power fo
