TAXATWO
TEST BANK-VALUE ADDED TAX (VAT) A.MULTIPLE CHOICE:
1. A TAX ON BUSINESS IS A A. DIRECT TAX
B. INDIRECT TAX C. PROPERTY TAX D. NONE OF THE ABOVE
2. ONE OF THE FOLLOWING IS NOT A MAJOR BUSINESS INTERNAL REVENUE TAXES IN THE TAX CODE
A) VALUE-ADDED TAX B) EXCISE TAX
C) INCOME TAX D) PERCENTAGE TAX
3. VALUE-ADDED TAX IS A(AN) A) INDIRECT TAX
B) DIRECT TAX
C) PROGRESSIVE TAX D) REGRESSIVE TAX
4. IN VAT TAXATION, THIS IS NOT A REQUIREMENT FOR TAXABILITY OF SERVICE
A) IN THE COURSE OF BUSINESS
B) PERFORMED WITHIN OR OUTSIDE THE PHILIPPINES
C) CONSIDERATION RECEIVED ACTUALLY OR CONTRUCTIVELY D) SUPPLY OF SERVICE IS NOT EXEMPT FROM VAT
5. CHARLIE IS AN OPERATOR OF PARKING LOTS. WHAT BUSINESS TAX IS DUE ON HIS INCOME FROM THE BUSINESS?
A) BROKER’S TAX B) CATERER’S TAX
C) COMMON CARRIER’S TAX D) VAT
6. MR. F IS A LESSOR OF REAL PROPERTY AND PERSONAL PROPERTY(CARS). THE TAX THAT HE PAYS IS
A) EXCISE TAX B) VAT
C) PERCENTAGE TAX D) NONE OF THE ABOVE
7. MR. S. MAGLER IMPORTED CIGARETTES FROM THE U.S. FOR SALE IN THE PHILIPPINES. WHAT BUSINESS TAXES IN THE PHILIIPINES ARE DUE?
A) VAT, EXCISE TAX, OTHER PERCENTAGE TAX B) VAT AND EXCISE TAX
C) OTHER PERCENTAGE TAX AND EXCISE TAX D) VAT AND PERCENTAGE TAX
8. STATEMENT 1: FOR PURPOSES OF THE THRESHOLD OF P1,500,000, THE HUSBAND AND WIFE ARE CONSIDERED AS SEPARATE
TAXPAYERS
STATEMENT 2: THE SELLER OF GOODS OR SERVICES IS THE ONE STATUTORILY LIABLE FOR THE PAYMENT OF VAT BUT THE AMOUNT OF THE TAX MAY BE SHIFTED OR PASSED TO THE BUYER, TRASFEREE OR LESSEE OF THE GOODS, PROPERTIES OR SERVICES
A) TRUE, FALSE B) FALSE, TRUE C) FALSE, FALSE D) TRUE, TRUE
9. THE FOLLOWING ARE DATA OF SPOUSES FIDEL AND AILEEN DURING THE YEAR:
GROSS RECEIPTS FIDEL AILEEN
FROM BUSINESS:
RESTAURANT 1,350,000
SMALL DEPT. STORE 1,220,000 PRACTICE OF PROFESSION
AS A CPA 254,300
WHICH OF THE FOLLOWING STATEMENTS IS CORRECT?
A) FOR PURPOSES OF THE THRESHOLD OF P1.5 MILLION THE GROSS RECEIPTS OF FIDEL AND AILEEN SHALL BE COMBINED
B) AILEEN SHALL BE SUBJECT TO VAT EVEN IF SHE DOES NOT REGISTER VOLUNTARILY UNDER THE VAT SYSTEM
C) FOR PURPOSES OF THE THRESHOLD OF P1.5 MILLION, THE
RESTAURANT AND THE PRACTICE OF PROFESSION ARE CONSIDERED AS SEPARATE TAXPAYERS
D) FOR PURPOSES OF THE THRESHOLD OF P1.5 MILLION, THE
AGGREGATION RULE FOR EACH TAXPAYER SHALL APPLY. THUS, THE GROSS RECEIPTS FROM THE RESTAURANT SHALL BE ADDED TO THE RECEIPTS FROM THE PRACTICE OF PROFESSION
10. KAREN IS A PRACTICING CPA. SHE IS ALSO A FULL TIME PROFESSOR OF ACCOUNTING IN ATENEO DE NAGA UNIVERSITY. IN THE
PRECEDING YEAR, HER GROSS RECEIPTS FROM THE PRACTICE OF PUBLIC ACCOUNTING WAS P1,400,000 WHILE HER TOTAL
COMPENSATION INCOME AS COLLEGE PROFESSOR WAS P195,000. WHICH OF THE FOLLOWING STATEMENTS IS CORRECT?
A) SHE IS SUBJECT TO VAT EFFECTIVE JANUARY 1 OF THE CURRENT YEAR
B) SHE MAY BE SUBJECT TO VAT IF SHE VOLUNTARILY REGISTERS UNDER THE VAT SYSTEM
C) SHE IS NOT REQUIRED TO PAY EITHER VAT OR ANY BUSINESS TAX D) SHE IS REQUIRED TO PAY PRIVELEGE TAX RECEIPT BUT NOT
BUSINESS TAX
11. THREE OF THE FOLLOWING ARE VAT-EXEMPT. WHICH IS THE EXCEPTION?
A) SALES OR IMPORTATION OF MEDICAL, DENTAL AND VETERINARY MEDICINES
B) SERVICES RENDERED BY PERSONS SUBJECT TO PERCENTAGE TAX C) RECEIPTS FROM LEASING OF REAL PROPERTIES
D) EXPORT SALES BY PERSONS WHO ARE NOT VAT-REGISTERED 12. WHICH OF THE FOLLOWING IS NOT VAT-EXEMPT?
A) IMPORTATION IN THEIR ORIGINAL STATE OF AGRICULTURAL AND MARINE FOOD PRODUCTS
B) IMPORTATION OF PASSSENGER OR CARGO VESSEL OF MORE THAN 5,000 TONS TO BE USED BY THE IMPORTER HIMSELF AS OPERATOR THEREOF
C) IMPORTATION OF PERSONAL AND HOUSEHOLD EFFECT BELONGING TO PHIL. RESIDENTS RETURNING FROM ABROAD
D) IMPORTATION OF NON-FOOD AGRCULTURAL PRODUCTS IN THEIR ORIGINAL STATE BY A PRIMARY PRODUCER
13. ONE OF THE FOLLOWING TRANSACTIONS BY A VAT-REGISTERED PERSON DOES NOT RESULT TO OUTPUT VAT
A) CASH SALES
B) SALES ON ACCOUNT C) SALES AND LEASEBACK D) EXPORT SALES
B. PROBLEM SOLVING
1. ABC COMPANY, A VAT –REGISTERED BUSINESS, HAD THE FOLLOWING DATA DURING THE QUARTER:
EXPORT SALES P1,815,000
DOMESTIC SALES(TAX INCLUDED) 1,232,000 PURCHASES OF GOODS FOR EXPORT 672,000 PURCHASES OF GOODS FOR DOMESTIC SALES 323,120 PURCHASES OF SUPPLIES ON DOMESTIC SALES,
EXCLUSIVE OF TAX 124,850
ASSUMING THAT THE INPUT TAXES PAID ON PURCHASES OF GOODS FOR EXPORT ARE CLAIMED AS TAX CREDIT, THE VAT PAYABLE BY ABC COMPANY IS
A) 12,895 B) 10,398 C) 177,895 D) 84,895
2. IN RELATION TO NO. 1 ABOVE, ASSUMING THAT THE INPUT TAXES ATRIBUTABLE TO EXPORT SALES ARE BEING CLAIMED AS REFUND, THE AMOUNT REFUNDABLE IS
A) 72,000 B) 12,895 C) 84,895 D) ZERO
3. JOEY, A NON-VAT TAXPAYER, PURCHASED MERCHANDISE WORTH P11,200, VAT INCLUSIVE. FROM WILLIE, A VAT-REGISTERED SELLER. THE PASSED ON VAST OF P1,200 ON THE PURCHASES IS
A) AN EXPENSE
B) PART OF THE COST OF PURCHASES C) A TAX CREDIT
D) IGNORED
4. ALTURA SOLD GOODS AT AN INVOICE PRICE OF P123,200 TO BELTRAN ON ACCOUNT. BELTRAN SOLD THE SAME GOODS TO CANTORIA FOR P143,000 (EXCLUSIVE OF TAX) CASH. ALL OF THEM ARE VAT-REGISTERED TAXPAYERS. THE ACCOUNTING ENTRY TO RECORD THE SALES IN THE BOOKS OF BELTRAN IS
A) CASH 160,160 SALES 143,000 OUTPUT TAX(143,000 X 12%) 17,160 B) CASH 143,000 SALES 143,000 C) CASH 160,160 SALES 160,160 D) CASH 143,000 SALES 125,840 OUTPUT TAX 17,160
5. THE JOURNAL ENTRY IN THE PURCHASE BOOKS OF BELTRAN IN NO., 4 ABOVE IS A) PURCHASES 110,000 INPUT TAX 13,200 ACCOUNTS PAYABLE 123,200 B) PURCHASES 96,800 ACCOUNTS PAYABLE 96,800 C) PURCHASES 83,600 INPUT TAX 13,200 ACCOUNTS PAYABLE 96,800 D) PURCHASED 110,000 ACCOUNTS PAYABLE 110,000
6. IN QUESTION NO. 4 ABOVE, ASSUMING THAT CANTORIA IS NOT SUBJECT TO VAT. IN THE SALE OF THE GOODS BY BELTRAN TO CANTORIA
A) BELTRAN SHOULD RECORD DEBIT CASH OF P125,840
C) CANTORIA SHOULD DEBIT PURCHASES OF P125,840 AND A DEBIT INPUT TAX OF P17,160
D) CANTORIA SHOULD DEBIT PURCHASES OF P143,000
7. 1ST STATEMENT: IN CASE TAX EXEMPT PRODUCTS ARE SOLD
DOMESTICALLY TO A VAT REGISTERED PERSON, THE VAT
OTHERWISE DUE ON SUCH PRODUCT SHALL BE CONSIDERED AS INPUT TAX CREDITABLE AGAINST HIS OUTPUT TAX PAYABLE 2ND STATEMENT: EXPORT SALES BY A VAT-REGISTERED PERSON ARE
SUBJECT TO ZERO-RATING AND SO HE CAN CLAIM AND ENJOY A CREDIT FOR THE TAX INVOICED TO HIM ON HIS PURCHASES. IF HE IS NOT VAT-REGISTERED, HIS EXPORT SALES ARE EXEMPT, BUT HE IS NOT ENTITLED TO TAX CREDIT FOR INPUTS
A) TRUE, TRUE B) FALSE, TRUE C) FALSE, FALSE D) TRUE, FALSE
NUMBER 8 THROUGH 10 ARE BASED ON THE FOLLOWING INFORMATION:
TRANSACTION 1-AN AGRICULTURAL FOOD PRODUCER SELLS HIS
PRODUCTS IN THEIR ORIGINAL STATE TO A FOOD PROCESSOR WHO ALSO BUYS PACKAGING MATERIALS AND CONTAINERS FROM A
MANUFACTURER/SUPPLIER
TRANSACTION 2-THE FOOD PROCESSOR TRANSFORMS THE FOOD PRODUCTS INTO PROCESSED FOODS AND SELLS TO A
WHOLESALER/EXPORTER
TRANSACTION 3- THE EXPORTER SELLS THE GOODS TO FOREIGN BUYERS TRANSACTION 4- THE WHOLESALER DELKIVERS THE MERCHANDISE TO RETAILERS
TRANSACTION 5- THE RETIALERS SELL THE GOODS TO HOUSEHOLDS OR ULTIMATE CONSUMERS
8. WHICH OF THE ABOVE TRANSACTIONS IS VAT-EXEMPT? A) #1
B) #2 C) #3 D) #4
9. WHICH IS ZERO-RATED? A) #1
B) #2 C) #3 D) #4
10. BASED ON NO.9 ABOVE, THE VAT ARE ABSORBED BY A) FOOD PROCESSOR
B) WHOLESALER/EXPORTER C) RETAILER
D) HOUSEHOLDS/ULTIMATE CONSUMER
NUMBERS 11 AND 12 ARE BASED ON THE FOLLOWING INFORMATION 11. THE PASTRY SHOP SELLS CAKES AND PASTRY ITEMS TO
WELL-KNOWN HOTELS AROUND METRO MANILA AREA. THE HOTELS ARE ALLOWED CREDIT BASED ON THE TRACK RECORD OF THE HOTELS. THE TOTAL AMOUNTS RECEIVED OR RECEIVABLE FROM SALES BY THE PASTRY SHOP IN THE 2ND QUARTER OF 2008 WERE P224,000,
INCLUDING THE VAT. SEVENTY FIVE PERCENT OF THE SALES ARE NORMALLY ON ACCOUNT. HOW MUCH IS THE VAT ON THE SALES FOR THE 2ND QUARTER OF 2008?
A) P20,000 B) P24,000 C) P26,880 D) P15,000
12. THE ACCOUNT TITLE TO BEST REFLECT THE VAT IN #11 ABOVE A) SALES TAX PAYABLE
B) VAT PAYABLE C) INPUT TAX D) OUTPUT TAX
NUMBERS 13 THROUGH 15 ARE BASED ON THE FOLLOWING INFORMATION:
MONGOLIA COMPANY, A VAT-REGISTERED BUSINESS HAS THE FOLLOWING DATA IN ITS BOOKS ON JULY, 2008:
DOMESTIC SALES P709,500
GOODS SHIPPED ON CONSIGNMENT(NET OF TAX) UNITS UNIT PRICE
JULY 5 25 22,000
JUNE 5 20 22,000
MAY 5 12 22,000
GOODS W/DRAWN FOR COMPANY USE 38,500 GOODS TAKEN AS PAYMENT FOR CREDITOR 26,950 FREIGHT AND INSURANCE OF GOODS 4,675 PURCHASES:
RAW MATERIALS 484,000
SUPPLIES 61,600
CAPITAL GOODS 60,500
SALARIES OF EMPLOYEES 235,000
DURING THE MONTH, ONE CONSIGNEE REMITTED CASH NET OF 20%
COMMISSION REPRESENTING PAYMENT FOR FIVE(5) UNITS DELIVERED ON JUNE 5.
ANOTHER CONSIGNEE REMITTED CASH OF P220,000, GROSS OF 20%
COMMISSION, REPRESENTING PAYMENT FOR TEN(10) UNITS SOLD IN JULY. OTHER THAN THE COMMISSION, MONGOLIA COMPANY GAVE 5%
DISCOUNT /REBATE TO THE CONSIGNEE FOR SELLING TEN(10) UNITS IN A ONE MONTH PERIOD.
13. THE OUTPUT TAX IN JULY IS A) P124,450
B) P121,050 C) P161,106 D) P134,255
14. THE INPUT TAX IS A) 61,078
B) 73,923 C) 65,440
D) NONE OF THE ABOVE
15. THE AMOUNT OF VAT PAYABLE IS A) 87,813
B) 69,350 C) 66,525 D) 78,404.46
16. A CREDITABLE INPUT TAX ON ONE WHO BECOMES SUBJECT TO VAT FOR THE FIRST TIME
A) PRESUMPTIVE INPUT TAX B) TRANSITIONAL INPUT TAX C) EXCESS INPUT TAX
D) TOTAL INPUT TAX
17.ISAAC COMPANY, A NEWLY VAT REGISTERED BUSINESS, HAS THE FOLLOWING DATA IN JANUARY (ALL AMOUNTS ARE INCLUSIVE OF TAX) MERCHANDISE INVENTORY 204,000
ACTUAL AMOUNT PAID ON THE INVTY 16,000 SALES, TOTAL INVOICE AMOUNT 469,000
PURCHASES 57,400
FIFTY PERCENT (50%) OF THE MDSE INVTY ON JANUARY 1 WERE PURCHASED FROM NON-VAT RWGISTERED SELLERS
THE VAT PAYABLE BY ISAAC COMPANY IS A) 30,100
B) 28,100 C) 3,960 D) 4,950
17. AN OWNER OF HEAVY EQUIPMENTS IS ENGAGED IN EQUIPMENT RENTAL. IT USED TO BE VAT-EXEMPT BECAUSE ITS ANNUAL RECEIPTS NEVER EXCEEDED P1,500,000. ON JANUARY 2, 2008, IT DECIDED TO REGISTER UNDER THE VAT SYSTEM. THE FOLLOWING DATA WERE FROM THE FIRST QUARTER ENDING MARCH 31, 2008: RENTAL FROM HEAVY EQUIPMENTS OF 12% VAT 336,000
PURCHASES OF SUPPLIES(FEBRUARY) GROSS OF VAT 112,000 INVENTORY OF SUPPLIES:
SUBJECT TO VAT JAN. 1, 2008 50,400
NOT SUBJECT TO VAT 60,000
VAT PAID ON THE INVTY OF SUPPLIES, JAN. 1, 2008 5,400 THE VAT PAYABLE FOR THE QUARTER ENDING MARCH 2008 IS
A) 12,171 B) 33,792 C) 18,600 D) 22,992
18. STATEMENT 1: TRANSPORT OF PASSENGERS AND CARGO BY DOMESTIC AIR OR SEA VESSELS FROM THE PHIL. TO A FOREIGN COUNTRY IS SUBJECT TO VAT AT A RATE OF 0%
STATEMENT 2: TRANSPORT OF PASSENGERS AND CARFO BY DOMESTIC AIR OR SEA VESSELS FROM MINDANAO TO LUZON AND VISAYAS, VICE VERSA, IS SUBJECT TO VAT AT A RATE OF 12%
A) TRUE, FALSE B) FALSE, TRUE C) FALSE, FALSE D) TRUE, TRUE
19. BETH HAD THE FOLLOWING RECEIPTS DURING THE MONTH (EXCLUSIVE OF TAX): PASSENGER CARGO JEEPNEY 1 20,000 JEEPNEY 2 30,000 BUS 15,000 8,500 SEA VESSEL 1,500,000 800,000
CESSNA PLANE FOR HIRE 800,000 560,000 THE OUTPUT TAX DURING THE PERIOD IS
A) 164,220 B) 441,000 C) 283,800 D) 440,220
20. INSIDE JOB SECURITY IS ENGAGED IN THE SELLING OF SECURITY SERVICES TO VARIOUS CLIENTS. DURING THE MONTH OF
DECEMBER, IT BILLED ONE OF ITS CLIENTS OF THE FOLLOWING:
MONTHLY SALARY 6,000
13TH MONTH PAY 6,000
AGENCY FEE AT 15% 1,800 SSS AND PHILHEALTH 300
LEAVE WITH PAY 450
BASED ON THE ABOVE DATA, HOW MUCH IS THE OUTPUT TAX PAYABLE OF INSIDE JOB SECURITY?
A) 1,746 B) 1,558.93 C) 1,440 D) 1,478.57
21. BONNEVIE IS A REAL ESTATE DEALER. DURING THE MONTH OF NOVEMBER 2008, HE SOLD THREE(3) LOTS UNDER THE FOLLOWING TERMS:
LOT1 LOT2 LOT3
SELLING PRICE 250,000 200,000 300,000 COST 150,000 130,000 175,000 GAIN/LOSS 100,000 70,000 125,000 TERMS: DP, NOV 5 25,000 50,000 40,000 DUE: DEC. 5 25,000 20,000 20,000 JAN TO DEC. 2009 200,000 130,000 240,000 ALL AMOUNTS INDICATED ABOVE DO NOT INCLUDE THE TAX. THE VAT IN NOVEMBER IS
A) 26,500 B) 31,800 C) 34,800 D) 90,000
22. BASED ON NO. 21 ABOVE, THE VAT FOR THE MONTH OF DECEMBER IS
A) 5,400 B) 4,500 C) 10,000 D) NONE
23. DIMAGIBA CONSTRUCTION COMPANY ENTERED INTO A CONTRACT WITH THE GOV’T TO CONSTRUCT AN EDIFICE FOR A TOTAL
CONTRACT PRICE OF P25,000,000. DURING THE MONTH, THE
GOVERNMENT PAID P10,000,000 OF WHICH IT WITHHELD 5% FINAL VAT WITHHOLDING TAX. HOW MUCH IS THE VAT PAYABLE BY THE COMPANY ON THE GOVERNMENT CONTRACT?
A) 150,000 B) 850,000 C) ZERO D) 1,000,000
24. WHICH OF THE FOLLOWING STATEMENTS IS NOT CORRECT?
A) TRANSITIONAL INPUT TAX IS 2% OF THE VALUE OF THE INVENTORY OR THE ACTUAL VAT PAID, WHICHEVER IS HIGHER
B) AMOUNTS RECEIVED FROM SERVICES PERFORMED BY AN INDIVIDUAL PURSUANT TO AN EMPLOYER-EMPLOYEE RELATIONSHIP ARE EXEMPT FROM VAT
C) EXPORT SALES BY VAT-REGISTERED PERSONS ARE NOT SUBJECT TO VAT
D) EXPORT SALES BY PERSONS WHO ARE NOT VAT-REGISTERED ARE VAT EXEMPT
25. TRANSACTION BY A VAT-REGISTERED TAXPAYER WHICH IS NOT SUBJECT TO VAT:
A) FOREIGN CURRENCY DENOMINATED SALES B) EXPORT SALE
C) TRANSACTION DEEMED SALE
D) SALE OF SERVICES RENDERED IN FOREIGN COUNTRIES 26. STATEMENT 1: THERE IS A VAT IN AN IMPORTATION BY AN
IMPORTER-MERCHANT EVEN IF HE DOES NOT INTEND TO SELL THE IMPORTED ARTICLE
STATEMENT 2: A PERSON WHO IS EXEMPT FROM VAT MAY REGISTER UNDER THE VAT SYSTEM
A) FALSE, FALSE B) FALSE, TRUE C) TRUE, FALSE D) TRUE, TRUE
27. STATEMENT 1: VAT IS IMPOSED ON GOODS BROUGHT INTO THE PHILIPPINES, WHETHER FOR USE IN BUSINESS OR NOT
STATEMENT 2: IN THE CASE OF GOODS IMPORTED INTO THE PHILIPPINES BY A VAT EXEMPT PERSON WHICH ARE SUBSEQUENTLY SOLD TO
TAXABLE PERSONS, THE LATTER SHALL BE CONSIDERED THE IMPORTER THEREOF AND SHALL BE LIABLE FOR VAT DUE ON SUCH IMPORTATION
A) TRUE, TRUE B) FALSE, FALSE C) FALSE, TRUE D) TRUE, FALSE
28. CELEBRADO, A VAT REGISTERED TAXPAYER, HAD THE FOLLOWING DATA ON IMPORTATION IN 2008:
FOR SALE OWN USE INVOICE COST($1:PHP46) $5,650 $850
CUSTOMS DUTIES 12% 10%
FREIGHT 20,000 4,000
INSURANCE 28,000 4,250
OTHER CHARGES BEFORE RELEASE
FROM CUSTOMS HOUSE 7,000 2,500
FACILITATION FEE 10,000 5,000
FREIGHT FROM CUSTOMS HOUSE
TO WAREHOUSE(NET OF VAT) 12,000 1,200
ASSUMING THE CUSTOMS DUTIES ARE DETERMINED ON THE BASIS OF THE QUANTITY OR VOLUME OF THE GOODS, THE VAT ON THE IMPORTATION IS
A) 31,260 B) 37,285 C) 47,981.76 D) 44,742
29. IN RELATION TO NO. 28 ABOVE, HOW MUCH IS THE VAT PAYABLE IF THE IMPORTED GOODS FOR SALE WERE SOLD FOR P665,000
(INCLUSIVE OF TAX) 10 DAYS AFTER ITS DELIVERY TO THE WAREHOUSE
A) 28,279.44 B) 32,298 C) 17,540 D) 25,068
30. ROBIN IMPORTED A CAR FROM THE U.S.A. FOR HIS PERSONAL USE. TOTAL LANDED COST IS P250,000 (ABOUT $5,000) INCLUDING
CUSTOMS DUTIES OF P50,000. VAT PAYABLE IS A) 25,000
B) 30,000 C) 10,000
D)ZERO, BECAUSE IMPORTATION IS FOR PERSONAL USE
31. RGF COMPANY IS A VAT REGISTERED GENERAL CONSTRUCTION COMPANY. ITS DATA FOR THE QUARTER ARE REVEALED BELOW: CONTRACT1-RESIDENTIAL HOUSE
CONTRACT PRICE=P1,200,000
COLLECTIONS DURING THE MONTH 616,000 CONTRACT2-WAREHOUSE
CONTRACT PRICE=P1,000,000
PERCENTAGE OF COMPLETION 70% COLLECTIONS DURING THE MONTH 220,080 IMPORTATION OF CONSTRUCTION EQUIPMENT FROM JAPAN:
INVOICE COST, JAPAN($1:PHP44) $7,500
VALUE PER BOC P340,000
CUSTOMS DUTIES 35,000
FREIGHT AND INSURANCE 17,000 PURCHASES OF MATERIALS:
FROM VAT REGISTERED PERSONS 226,240 FROM NON-VAT REGISTERED PERSONS 126,500 REVENUE FROM RENT OF EQUIPMENT TO
ANOTHER CONTRACTOR 17,920
ASSUMING THE CUSTOMS DUTIES WERE BASED ON THE QUANTITY OF THE GOODS IMPORTED, THE VAT DUE ON THE IMPORTATION IS
A) 46,860 B) 52,260 C) 45,840 D) 46,050
32. THE VAT PAYABLE BY RGF COMPANY DURING THE QUARTER IS A) 21,420
B) 19,200 C) 6,450 D) 20,400
33. BATA, A VAT REGISTERED PERSON HAD THE FOLLOWING DATA: PRICE ACTUALLY PAID FOR THE GOODS
BOUGHT FROM JAPAN P600,000
RELATED INSURANCE AND FREIGHT FROM JAPAN 100,000 CUSTOMS DUTIES AMOUNT TO 40% OF DUTIABLE VALUE
OTHER IMPORT CHARGES AND EXPENSES AMOUNT TO 120% OF CUSTOMS DUTIES
THE VAT ON IMPORTATION IS A) 82,560
B) 145,920 C) 135,360 D) 157,920
34. PATOGROK COMPANY CONTRACTED WITH SAPOTIZE
CONSTRUCTION CORPORATION TO CONSTRUCT THE FORMER’S BUILDING WHERE ONLY THE LABOR WILL BE SUPPLIED BY THE LATTER. THE DATA ON THE CONSTRUCTION (INCLUSIVE OF TAX) DURING THE MONTH ARE AS FOLLOWS:
PROGRESS BILLINGS BY SAPOTIZE COMPANY 600,000 PAYMENT TO SAPOTIZE COMPANY 504,000 PURCHASE OF MAT’LS BY PATOGROK COMPANY 442,400 WHICH OF THE FOLLOWING STATEMENTS IS FALSE?
A) CONSTRUCTION IN PROGRESS IS NOT DEPRECIATED UNTIL THE ASSET IS PLACED IN SERVICE
B) FOR PURPOSES OF CLAIMING INPUT TAX, AS A PURCHASE OF
SERVICE, THE VALUE OF WHICH SHALL BE DETERMINED BASED ON THE PROGRESS BILLINGS
C) THE INPUT TAX CREDIT ON THE LABOR CONTRACTED SHALL BE RECOGNIZED ON THE MONTH THE PAYMENT WAS MADE BASED ON THE PROGRESS BILLINGS
D) ONCE THE INPUT TAX HAS ALFREADY BEEN CLAIMED WHILE THE CONSTRUCTION IS STILL IN PROGRESS, NO ADDITIONAL INPUT TAX CAN BE CLAIMED UPON COMPLETION OF THE ASSET WHEN IT HAS
BEEN RECLASSIFIED AS A DEPRECIABLE CAPITAL ASSET AND DEPRECIATED
35. AILEEN, A JAPANESE RESIDING IN THE PHILIPPINES BOUGHT
GARMENTS FROM CUA CORPORATION, A DOMESTIC CORPORATION, AND EXPORTED THE SAME TO JAPAN. TOTAL VALUE OF EXPORT IS P100,000. VAT(OUTPUT TAX) DUE ON THE TRANSACTION IS
A) 10,000 B) 5,000
C) NONE, BECAUSE 0% APPLIES
D) NONE, BECAUSE THE SALE IS VAT-EXEMPT
36.OFFSPRING CORPORATION IS A VAT REGISTERED DEALER OF
APPLIANCES. THE FOLLOWING DATA ARE FOR THE MONTH OF OCTOBER: SALES, TOTAL INVOICE VALUE 5,800,000
PURCHASES, NET OF INPUT TAXES 2,820,000
SALES RETURN 200,000
PURCHASES RETURN, NET OF INPUT TAX 300,000 DEFERRED INPUT TAXES, (CARRIED OVER FROM
THE THIRD QUARTER) 9,500
THE VAT PAYABLE FOR THE MONTH OF OCTOBER BY OFFSPRING CORPORATION IS
A) 320,500 B) 285,500 C) 80,000 D) 288,100
36. THE FOLLOWING ARE THE DATA OF CITY APPLIANCES MARKETING COMPANY FOR OCTOBER 2008:
SALES UP TO OCTOBER 15, TOTAL INVOICE VALUE 266,000 PURCHASES UP TO OCTOBER 15, NET OF INPUT TAXES 215,000 ADDITIONAL INFORMATION:
ON OCTOBER 16, 2008, THE CITY APPLIANCES MARKETING CO. RETIRED FROM ITS BUSINESS AND THE INVENTORY VALUED AT P190,000, NET OF INPUT TAXES, WAS TAKEN AND TRANSFERRED TO NEW CITY APPLIANCES COMPANY. THERE IS A DEFERRED INPUT TAXES FROM THE THIRD
HOW MUCH IS THE TOTAL VAT DUE AND PAYABLE BY CITY APPLIANCES MARKETING CO. IN ITS OPERATIONS IN OCTOBER AND ITS RETIREMENT FROM THE BUSINESS?
A) 22,500 B) 22,000 C) 6,350 D) 25,350
NUMBERS 37 AND 38 ARE BASED ON THE FOLLOWING INFORMATION: GABRIEL PANGA AUTO REPAIR SHOP, VAT REGISTERED, HAD THE
FOLLOWING DATA IN ITS BOOKS DURING THE PERIOD:
RECEIPTS:
FROM AUTO REPAIR 85,620
FROM WASHING AND GREASING 45,425 REIMBURSEMENT BY CUSTOMER ON PAYMENTS
MADE TO VAT MACHINE SHOPS 4,350 PAYMENTS RECEIVED FOR LUBRICANTS, OILS
AND FLUID PROVIDED BY THE SHOP
TO CARS UNDERGOING REPAIR 5,780 DISBURSEMENTS:
ELECTRIC BILL 3,550
WATER BILL 2,380
SALARIES OF EMPLOYEES 15,000 PAYMENTS MADE TO MACHINE SHOPS, NON-VAT 4,350 PURCHASE OF LUBRICANTS, OILS AND FLUIDS 3,000 PURCHASE OF CAPITAL GOODS(LIFE=10YRS) 24,000 37. THE OUTPUT TAX AMOUNT TO
A) 16,419 B) 16,941 C) 14,660 D) 15,126
38. IN RELATION TO NO. 37 ABOVE, THE VAT PAYABLE IS A) 9,404
B) 12,753 C) 9,459 D) 6,979
39. TAXPAYERS WHO BECAME VAT REGISTERED PERSONS UPON
EXCEEDING THE MINIMUM TURN-OVER OF P1.5 MILLION IN ANY 12-MONTH PERIOD, OR WHO VOLUNTARILY REGISTER EVEN IF THEIR TURNOVER DOES NOT EXCEED P1.5 MILLION SHALL BE ENTITLED TO TRANSITIONAL INPUT TAX ON THE INVENTORY ON HAND AS OF THE EFFECTIVITY OF THEIR VAT REGISTRATION ON THE FOLLOWING, EXCEPT:
A) SUPPLIES FOR USE IN THE COURSE OF TAXPAYER’S TRADE OR BUSINESS
B) GOODS WHICH HAVE BEEN MANUFACTURED BY THE TAXPAYER C) GOODS IN PROCESS FOR SALE
D) CAPITAL GOODS BEING USED IN THE OPERATION OF THE BUSINESS NUMBERS 40 TO 43 ARE BASED ON THE FOLLOWING INFORMATION: SUMILCO, A MANUFACTURER OF REFINED SUGAR, BECAME SUBJECT TO VAT EFFECTIVE DECEMBER 1, 2008. DURING THE MONTH, THE FOLLOWING ARE ITS DATA:
REFINED SUGAR WITHDRAWN FROM REFINERY,
INCLUSIVE OF VAT 924,000
PURCHASES OF:
SUPPLIES FROM VAT REGISTERED SUPPLIERS 38,500 PACKAGING MATERIALS, VAT INCLUSIVE 27,060 SUGAR CANE FROM PLANTERS 350,000
WATER BILL 12,000
SALARIES OF OFFICIALS AND EMPLOYEES 150,000 INVENTORY PER BALANCE SHEET, DECEMBER 1 ,2008
PACKAGING MATERIALS 17,875
SUPPLIES PURCHASED FROM
VAT REGISTERED PERSONS 14,850
SUPPLIES PURCHASEDFROM
NON-VAT REGISTERED SUPPLIERS 4,750 40. THE PRESUMPTIVE INPUT TAX IS
A) 35,000 B) 5,250 C) 13,860 D) 14,000
41. THE TRANSITIONAL INPUT TAX IS A) 3,506.25
B) 2,975 C) 654.50 D) 2,998
42. THE TOTAL CREDITABLE INPUT TAX IS A) 24,530.54
B) 13,828 C) 92,935 D) 22,935
43. THE VAT PAYABLE IS A) 61,065
B) 70,172 C) 74,469.46 D) 69,815
44. AN IMPORTER WISHES TO WITHDRAW ITS IMPORTATION FROM BOC. THE IMPORTED GOODS WERE SUBJECTED TO A 10% CUSTOMS DUTY IN THE AMOUNT OF P12,500 AND TO OTHER CHARGES IN THE
AMOUNT OF P9,500. THE VAT DUE IS A) 12,500
B) 17,640 C) 13,364 D) 14,700
45. KAKA IS NA CONTRACTOR. SHE ENTERED INTO A CONTRACT ON MARCH 1, 2008 WHICH WAS COMPLETED ON MARCH 31, 2008. SHE RECEIVED THE TOTAL VALUE OF THE CONTRACT AMOUNTING TO P550,000 ON MARCH 31, 2008.
KAKA SPENT FOR THE MATERIALS USED IN THE CONTRACT WHICH SHE ACQUIRED FROM VALUE-ADDED REGISTERED SUPPLIERS COSTING P150,000. ALL AMOUNTS ARE EXCLUSIVE OF VAT.
THE VAT PAYABLE BY KAKA FOR THE MONTH OF MARCH IS A) 15,000
B) 40,000 C) 48,000 D) 59,500
46. ARCHIE LADO, A NEWLY VAT REGISTERED TAXPAYER IS A LESSOR OF POLES TO TELEPHONE AND CABLE COMPANIES. DURING THE MONTH OF JANUARY 2008, HE HAD THE FOLLOWING RECEIPTS FROM CUSTOMERS:
SECURITY DEPOSIT FROM CUSTOMER C 110,000 RENT INCOME IN JANUARY FROM VARIOUS CUSTOMERS 88,000 PREPAID RENTALS RECEIVED FROM CUSTOMER C
(FEBRUARY TO JUNE) 132,000
LOAN TO ARCHIE LADO FROM CUSTOMER B 82,500 DURING THE MONTH, A PORTION OF THE SECURITY DEPOSIT FOR THE FAITHFUL COMPLIANCE BY CUSTOMER C OF ITS OBLIGATIONS TO THE LESSOR WAS APPLIED TO RENTAL FOR JANUARY IN THE AMOUNT OF P11,000.
AT THE BEGINNING OF THE YEAR, ARCHIE HAD P252,000 WORTH OF
INVENTORY OF SUPPLIES AND MATERIALS FOR USE IN THE BUSINESS. VAT PAID ON THE BEGINNING INVENTORY IS P3,500.
THE OUTPUT TAX OF ARCHIE IN JANUARY IS A) 24,750
B) 21,000 C) 28,500 D) 39,500
47. IN QUESTION NO. 46 ABOVE, THE INPUT TAX ON ARCHIE IS A) 5,040
B) ZERO C) 21,000 D) 4,160
48. IN WHICH OF THE FOLLOWING CASES MAY REFUND OF INPUT TAX BE ALLOWED?
1ST CASE:FOR INPUT TAX ON PURCHASES OF CAPITAL GOODS
2ND CASE: FOR INPUT TAX ON PURCHASES OF GOODS AND SERVICES BY AN
EXPORTER
A) IN BOTH CASES
B) ONLY IN THE 1ST CASE
C) NEITHER IN THE 1ST NOR IN THE 2ND CASE
49. MARINDA IS A VAT REGISTERED GROCERY OWNER AND SUGAR DEALER. SHE SUBMITTED LISTS OF INVENTORY AS OF DECEMBER 31, 2007 TO THE RDO AS FOLLOWS:
GROCERY ITEMS, TOTAL VALUE 325,000 RAW CANE SUGAR, TOTAL VALUE 255,000
IN JANUARY 2008, SHE HAD THE FOLLOWING SALES AND PURCHASES: SALES PURCHASES GROCERY(TOTAL INVOICE VALUE) 1,042,525 650,100 SUGAR(EXCLUDING VAT) 480,000 420,000 THE VAT DUE FOR JANUARY 2008 IS
A) 35,675 B) 42,054.54 C) 41,675.31 D) 6,675.26
NUMBERS 50 AND 51 ARE BASED ON THE FOLLOWING INFORMATION: GOODBOOKS EDUCATIONAL SUPPLY, VAT REGISTERED, IS ENGAGED IN THE BUSINESS OF SELLING BOOKS, SCHOOL SUPPLIES AND GIFT ITEMS. THE FOLLOWING ARE THE RECORD OF ITS PURCHASES AND SALES DURING THE MONTH OF OCTOBER(INCLUSIVE OF TAX):
SALE OF SCHOOL SUPPLIES 560,000
SALE OF BOOKS 200,000
SALE OF GIFT ITEMS 335,000
PURCHASES OF SCHOOL SUPPLIES/GIFT ITEMS 406,000
PURCHASES OF BOOKS 176,000
PURCHASE OF COMPUTER USED I N TAXABLE
AND EXEMPT TRANSACTIONS 21,112
50. THE CREDITABLE INPUT TAX ON THE PURCHASE OF COMPUTER IS A) 2,400.20
B) 1,920.50 C) 26,400.65 D) 1,809.60
51. IN RELATION TO NO. 50 ABOVE, THE VAT PAYABLE IS A) 50,690.40
B) 34,100.50 C) 36,500 D) 43,280.25
52. TALA COMPANY HAD THE FOLLOWING DATA FOR THE 1ST QUARTER
OF 2008(VAT EXCLUSIVE):
TAXABLE SALES 600,000
EXEMPTED SALES 300,000
ZERO-RATED SALES 100,000
INPUT TAX WHICH CANNOT BE DIRECTLY ATTRIBUTED TO ANY OF THE ABOVE
SALES 50,000
THE VAT PAYABLE FOR THE QUARTER IS A) 42,000
B) 37,000 C) 32,000 D) 22,000
53. COMBINED COMPANY OPERATES A VAT BUSINESS AND A NON-VAT BUSINESS. DURING THE MONTH, ITS BOOKS REVEALED THE
FOLLOWING RECORD OF SALES AND PURCHASES:
SALES(VAT BUSINESS) 600,000
SALES (NON-VAT BUSINESS) 200,000 PURCHASES(VAT BUSINESS) 401,500 PURCHASES(NON-VAT BUSINESS) 80,000 PURCHASES (VAT AND NON-VAT BUSINESSES) 64,000 THE VAT PAYABLE BY COMBINED COMPANY IS A) 7,660
B) 6,060 C) 13,500 D) 18,060
54. EXCEL COMPANY,OPERATES TWO LINES OF BUSINESS. BUSINESS A IS SUBJECT TO VAT, WHILE BUSINESS B IS NOT. DATA FOR THE MONTH ARE AS FOLLOWS:
SALES:
VAT BUSINESS, VAT INCLUDED 560,000
NON-VAT BUSINESS 100,000
PURCHASES:
MERCHANDISE, VAT BUSINESS, VAT INCLUDED 154,000 MERCHANDISE, NON-VAT BUSINESS, VAT INCLUDED 67,100 CAPITAL GOODS, VAT BUSINESS, VAT INCLUDED 34,776 CAPITAL GOODS, NON VAT BUSINESS, VAT INCLUDED 27,500 CAPITAL GOODS, FOR USE IN BOTH BUSINESSES,
VAT INCLUDED 56,000
RENT OF STORE SPACE, VAT BUSINESS, VAT INCLUDED 14,560 RENT OF WAREHOUSE, VAT AND NON-VAT BUSINESS,
VAT EXCLUDED 6,200
FREIGHT OF GOODS, VAT AND NON-VAT BUSINESS,
VAT INCLUDED 2,576
TELEPHONE BILLS, VAT AND NON-VAT, VAT INCLUDED 1,624 THE INPUT TAX ON BUSINESS A IS:
A) 27,781 B) 23,747 C) 23,267 D) 18,875
55. IN QUESTION NO. 54 ABOVE, THE VAT PAYABLE BY EXCEL COMPANY IS
A) 19,035 B) 20,733 C) 20,253 D) 32,219
NUMBERS 56 THROUGH 58 ARE BASED ON THE FOLLOWING INFORMATION:
MILDRED ENTERPRISES, A VAT REGISTERED TRADER HAD THE FOLLOWING DATA DURING THE LAST QUARTER OF THE YEAR:
PURCHASES SALES
OCTOBER 627,200 392,000
NOVEMBER 599,200 862,400
56. THE AMOUNT OF VAT PAYABLE BY MILDRED FOR THE MONTH OF OCTOBER IS A) 25,200 B) 16,500 C) 2,000 D) ZERO
57. THE VAT PAYABLE FOR THE MONTH OF NOVEMBER IS A) 203,500
B) 28,200 C) 3,000 D) ZERO
58. THE VAT PAYABLE/EXCESS FOR THE LAST QUARTER IS A) (18,216)
B) 18,216 C) 60,900 D) ZERO
NUMBERS 59 THROUGH 61 ARE BASED ON THE FOLLOWING INFORMATION:
THE BOOKS OF ACCOUNTS OF FRANKLIN CORPORATION, VAT REGISTERED, REVEALED THE FOLLOWING DATA IN 2007: DEFERRED INPUT TAXES, JUNE 2007 6,200 SALES: JULY 620,000 AUGUST 430,000 SEPTEMBER 540,000 PURCHASES: JULY 508,000 AUGUST 432,000 SEPTEMBER 314,500
59. THE VAT PAYABLE FOR JULY IS A) 13,440
B) 7,240 C) 11,200 D) 5,000
60. THE VAT PAYABLE FOR AUGUST IS A) (6,440)
B) (240) C) ZERO D) 7,000
61. THE VAT PAYABLE FOR SEPTEMBER IS A) 26,580
B) 27,060 C) 20,860 D) 34,090
62. FELICISIMA HAD THE FOLLOWING DATA:
CASE 1 CASE 2 SALES, NET OF VAT 1,900,000 1,800,000 PURCHASES OF GOODS FOR
SALE, EXCLUSIVE OF VAT 1,260,000 1,600,000 PURCHASES OF MACHINES(VAT
NOT INCLUDED) 1,440,000 900,000
MACHINE LIFE 6 YEARS 3 YEARS
THE AMOUNTS OF VAT PAYABLE/EXCESS TAX ARE AS FOLLOWS:
A) B) C) D)
CASE 1 54,000 73,920 73,920 ZERO CASE 2 (84,000) (84,000) 20,000 ZERO
63. LAVINIA HAD THE FOLLOWING DATA IN JULY:
SALES OF GOODS(EXCLUDING VAT) 2,540,000 PURCHASES OF GOODS(NET OF VAT) 1,450,000 PURCHASES OF CAPITAL GOODS(INVOICE AMOUNT):
MACHINE 1 (USEFUL LIFE)=6 YEARS 974,400 MACHINE 2 (USEFUL LIFE)=3 YEARS 67,200 THE VAT PAYABLE IN JULY IS
A) 120,860 B) 19,200 C) 33,600 D) (40,800)
NUMBERS 64 AND 65 ARE BASED ON THE FOLLOWING INFORMATION: THE FOLLOWING DATA (NET OF TAX) OF CHRISTINE COMPANY ARE AS FOLLOWS:
1ST QUARTER:
SALES 700,000
PURCHASES 500,000
PURCHASE OF MACHINERY(FEBRUARY) 1,500,000 UNUTILIZED INPUT TAX AS END OF 1ST QTR 40,000
2ND QUARTER
SALES 1,500,000
PURCHASES 200,000
64. FOR THE FIRST QUARTER, CHRISTINE COMPANY WILL RESULT TO A/AN
A) VAT PAYABLE OF 72,000 B) EXCESS TAX OF 22,000 C) EXCESS TAX OF 196,000 D) VAT PAYABLE OF 22,000
65. THE VAT PAYABLE FOR THE SECOND QUARTER IS A) 156,000
B) 134,000 C) 125,000 D) ZERO
66. DATA DURING THE SECOND QUARTER:
OUTPUT TAX 35,000
INPUT TAX 19,000
VAT PAID:
APRIL 3,000
MAY 4,500
EXCESS INPUT TAX, 1ST QUARTER 2,400
THE VAT PAYABLE (OR EXCESS TAX TO BE CARRIED OVER) IS A) 6,100
B) 16,000 C) 8,500 D) ZERO
67. A NEW BUSINESSMAN CONSULTED YOU RELATIVE TO THE FILING OF TAX RETURN AND PAYMENT OF HIS BUSINESS TAX. THE
BUSINESS IS VAT REGISTERED ALTHOUGH HE IS EXPECTING TO EARN AN ADDITIONAL GROSS RECEIPTS RANGING FROM P900,000 TO P1,200,000 ONLY. THESE ARE HIS QUESTIONS:
1. WHAT BUSINESS TAX SHOULD BE PAID BY HIM?
2. WHEN IS THE DEADLINE FOR FILING THE TAX RETURN FOR THE MONTH OF MAY?
3. WHEN IS THE DEADLINE FOR THE PAYMENT OF THE BUSINESS TAX FOR THE MONTH OF JUNE(OR SECOND QUARTER)?
WHICH OF THE FOLLOWING CHOICES WOULD BE THE CORRECT ANSWER? QUESTION #1 QUESTION #2 QUESTION #3
A) VAT JUNE 20 JULY 25
B) VAT JUNE 25 JULY 25
C) NON-VAT JUNE 20 JULY 25
D) NON-VAT JUNE 20 JULY 25
NUMBERS 68 AND 69 ARE BASED ON THE FOLLOWING INFORMATION: THE CITY GOVERNMENT OF IRIGA HAS THE FOLLOWING PURCHASES FOR THE MONTH OF AUGUST 2009 FROM VAT SUPPLIERS OF GOODS AND/OR SERVICES:
PURCHASES OF GOODS FROM SINADIRI STORE
AND MERCHANDISE (INCLUSIVE OF VAT) 11,200 PURCHASE OF SERVICES FROM DAMAN SERVICES, INC. 56,000
68. THE AMOUNT PAYABLE TO SINADIRI STORE AND MERCHADISE AFTER WITHHOLDING TAXES OF VAT AND INCOME TAX IS A) 11,200
B) 10,600 C) 9,400 D) 10,500
69. THE AMOUNT PAYABLE TO DAMAN SERVICES, INC. AFTER WITHHOLDING TAXES OF VAT AND INCOME TAX IS
A) 56,000 B) 50,000 C) 52,500 D) 53,500
C. TRUE OR FALSE
1 VAT REGISTERED PERSON WHO ISSUES A VAT INVOICE FOR A VAT EXEMPT SALE BUT FAILS TO DISPLAY ON THE INVOICE THE TERM “VAT EXEMPT” SHALL BE SUBJECT TO VAT ON THAT SALE
2. THE INPUT TAX OF A VAT PURCHASER IS THE OUTPUT TAX OF THE VAT SELLER.
3.SERVICES RENDERED TO PERSONS ENGAGED IN INTERNATIONAL SHIPPING OR AIR TRANSPORT OPERATIONS ARE SUBJECT TO 12% VAT. 4.THE EXCESS OF OUTPUT VAT OVER THE INPUT TAX IS A CURRENT ASSET OF THE TAXPAYER
5.THE INPUT VAT ON PURCHASE OF CAPITAL GOODS VALUED AT P2,000,000 SHALL BE SPREAD OVER 60 MONTHS, OR THE LIFE OF THE ASSET,
WHICHEVER IS SHORTER, SUBJECT TO 70% VAT CAP
6. PERSONS ENGAGED IN SALE OF SERVICES MAY ALSO BE ALLOWED TO CLAIM TAX CREDIT ON PRESUMPTIVE INPUT TAX
7. GROSS RECEIPTS ON SERVICES RENDERED BY ALL FRANCHISE GRANTEES ARE SUBJECT TO FRANCHISE TAX
8. TRANSPORTATION CONTRAC TORS WHO TRANSPORT PASSENGERS FOR HIRE BY LAND ARE NOT SUBJECT TO VAT EVEN IF THEIR GROSS RECEIPTS IN A 12-MONTH PERIOD DO NOT EXCEED P1,500,000
9.A CPA IS SUBJECT TO VAT ON THE SALE OF PROFESIONAL SERVICES UNLESS THE GROSS RECEIPTS IN A 12-MONTH PERIOD DO NOT EXCEED P1,500,000
10. A PHYSICIAN IS NOT SUBJECT TO VAT BECAUSE IN EXERCISING HIS PROFESSIONAL SERVICES HE IS NOT ENGAGING HIMSELF IN BUSINESS 11. THERE IS NO CREDITABLE INPUT TAX ON SALES TO GOVERNMENT OR ANY OF ITS POLITICAL SUBDIVISIONS, INSTRUMENTALITIES OR AGENCIES, INCLUDING GOCCs
12. IF THE INVOICE PRICE IS INCLUSIVE OF VAT, THE AMOUNT GIVEN IS MULTIPLIED BY 12/112 TO GET THE VAT COMPONENT THEREON
13.A TAXPAYER WHO OPERATES A VAT AND A NON-VAT BUSINESS
CANNOT CLAIM INPUT TAX CREDIT ON PURCHASES OF GOODS TO BE USED IN HIS NON-VAT BUSIN ESS
14.ANY INPUT TAX ATTRIBUTABLE TO ZERO-RATED SALES BY A VAT-REGISTERED PERSON MAY AT HIS OPTION BE REFUNDED OR APPLIED FOR A TAX CREDIT CERTIFICATE WHICH MAY BE USED IN THE PAYMENT OF INTERNAL REVENUE TAXES
15.BANKS AND OTHER BANKING INSTITUTIONS ARE SUBJECT TO VAT
16.IMPORTATION OF GOODS ARE SUBJECT TO VAT EVEN IF THE INTENTION OF THE IMPORTER IS TO USE THE IMPORTED GOODS FOR PERSONAL
PURPOSES
17.THE GROSS RECEIPTS DERIVED FROM EXECISE OF A PROFESSION AND FROM OTHER LINES OF VATABLE BUSINESS SHALL BE COMBINED FOR PURPOSES OF DETERMINING THE THRESHOLD OF P1,500,000
18.THE ACCOUNT OUTPUT TAX MUST APPEAR IN THE CURRENT LIABILITY SECTION OF THE BALANCE SHEET.
19.A LEASE OF A COPYRIGHT ON TAXATION BOOKS ARE SUBJECT TO VAT 20. INPUT TAX, BEING A TAX, IS AN EXPENSE ON THE PART OF THE
PURCHASER AND IS DEDUCTIBLE FROM GROSS INCOME FOR PURPOSES OF COMPUTING THE NET INCOME
21.VAT IS A REGRESSIVE TAX
22. SYSTEMS LOSS ON ELECTRICITY THAT ARE BEING CHARGED BY ELECTRIC COOPERATIVES TO CONSUMERS ARE SUBJECT TO 12% VAT 23. PRINTING OF INVOICES AND RECEIPTS (INCLUDING DELIVERY RECEIPTS) REQUIRES APPROVAL FROM BIR
24.PURCHASES AND SALES ARE RECORDED IN THE BOOKS OF A NON-VAT TAXPAYER AT AN AMOUNT WHICH IS NET OF INPUT/OUTPUT TAXES
25. A SALE OF POWER OR FUEL WHICH IS G ENERATED FROM SOLID WASTE IS SUBJECT TO 0% VAT
