EXPLAIN THE CORRECT ANSWER. (short explanation only)

1.The term "Corporation" shall include:

I.Partnerships, no matter how created or organized

II.Joint stock companies

III.Joint accounts (cuentas en participation)

IV.Associations

V.Insurance companies

VI.Mutual fund companies

VII.Regional operating headquarters of multinational corporations

a)I and II onlyc)I, II, III, IV and V only

b)I, II and III onlyd)All of the above

2.Statement 1: Corporations exempt from income tax are not subject to income tax on incomes received whish are incidental or necessarily connected with the purposes for which they were organized and operating.

Statement 2: Corporations exempt from income tax are subject to income tax on income of whatever kind and character from any of their properties (real or personal) or from any other activity conducted for profit, regardless of the disposition of such income.

a)Only statement 1 is correct

b)Only statement 2 is correct

c)Both statements are correct

d) Both statements are incorrect

3.Which of the following statements is correct?

I.The term "domestic" when applied to a corporation, means created or organized in the Philippines or under the laws of a foreign country as long as it maintains a Philippine branch

II.A corporation which is not domestic may be a resident (engaged in business in the Philippines) or nonresident corporation (not engaged in business in the Philippines).

III.Resident foreign corporations are subject to income tax based on net income sources within the Philippines

a)I onlyc) II and II only

b)II onlyd) I, II and III

4.Which of the following is taxable based on income from all sources, within and without?

a)Domestic Corporations

b)Resident Foreign Corporation

c)Non-resident Foreign Corporations

d) All of the choices

5.The following passive income received by a domestic corporation shall be subject to 20% final withholding tax, except:

a)Interest income from peso bank deposit

b)Yield from deposit substitutes

c)Dividend Income from another domestic corporation

d) Royalties