question archive 1) Under the Creditable Withholding Tax system, which of the following statements is incorrect? a
1) Under the Creditable Withholding Tax system, which of the following statements is incorrect? a
Subject:AccountingPrice: Bought3
1) Under the Creditable Withholding Tax system, which of the following statements is incorrect?
a. Taxes withheld on certain income payments are intended to equal or at least approximate the tax due of the payee on said income.
b. The recipient of the income is no longer required to file an income tax return as prescribed under the Tax Code.
c. The payee is required to report the income and pay the difference between the tax withheld and the tax due thereon.
d. Taxes withheld under this system are creditable in nature.
2. Which of the following statements is correct?
a. Withholding tax liability may arise only when the agent has possession, custody or control of the funds withheld.
b. The withholding tax system was devised to provide the taxpayer a convenient manner to meet his probable income tax liability and to ensure collection of the income tax which could otherwise be lost or substantially reduced through failure to file the corresponding returns.
c. Withholding tax system is designed to improve the government's cash flow.
d. All of the above.
3. Under the Final Withholding Tax system, which of the following statements is not correct?
a. Income tax withheld by the withholding agent is constituted as a full and final payment of the income tax due from the payee on the said income.
b. The liability for payment of the tax rests primarily on the payee as a recipient of income.
c. In case of failure to withhold the tax, the deficiency tax shall be collected from the withholding agent.
d. The payee is no longer required t file an income tax return for the particular income.
4. When the refund of a tax supposedly due to the taxpayer has already been barred by prescription and the said taxpayer is assessed with a tax, the two taxes may be set-off with each other. This doctrine is called
a. Set-off doctrine c. Tax sparring doctrine
b. Doctrine of reciprocity d. Equitable recoupment
