VALUE ADDED TAX
1.
One of the following statements is incorrect
A. Imported goods which are subject to excise tax are no longer subject to VAT.
B. VAT on importation is paid to the Bureau of Customs before the imported goods are released from custody.
C. Expenses incurred after the goods are released from Customs custody are disregard in computing the VAT
on importation.
D. When a person who enjoys a tax-exemption on his importation subsequently sells in the Philippines such
imported articles to a non-exempt person, the purchaser-non-exempt person shall pay the VAT on such
importation.
2.
Which of the following input taxes can be refunded, converted into tax credit certificates or carried over to the
next quarter at the option of the VAT registered taxpayer?
A. Input tax on raw materials
B. Input tax on importation of supplies
C. Input tax on zero-rated sales of goods and services
D. Input tax on purchase of services
3.
Value Added Tax is a/an
A. Indirect tax
B. Direct tax
C. Local tax
D. Personal tax
4.
Statement 1: A taxpayer whose gross sales or receipts exceeded the amount of P3,000,000 shall pay VAT even
if he is not VAT registered; consequently, he is also entitled to input taxes.
Statement 2: Importer of goods for personal use is not subject to VAT if he is not-VAT registered
A. Both statements are true
B. Both statements are false
C. Only statement 1 is true
D. Only statement 2 is true
5.
Which statement is correct?
A. Zero rated sales are exempt from the VAT.
B. A person whose sales or receipts do not exceed P250,000 is exempt from VAT and OPT
C. A person who issues a VAT invoice on a VAT exempt transaction is nevertheless subject to VAT on the said
transaction
D. Entities which are exempt from income tax are also exempt from VAT.
6.
Which of the following importation is subject to VAT?
A. Importation of frozen meat
B. Importation of bamboo poles
C. Importation of apples for personal consumption
D. Importation of grapes for sale
7.
Which of the following is subject to VAT?
A. Sale of smoked fish
B. Sale of lechon
C. Sale of shells and coral products by a dealer
D. Sale of newspaper
8.
One of the following is not a major business internal revenue tax in the Tax Code
A. VAT
B. Excise Tax
C. Income Tax
D. Percentage Tax
9.
The allowable transitional input tax is
A. The lower between 2% of the value of beginning inventory or actual VAT paid on such inventory.
B. The higher between 2% of the value of beginning inventory or actual VAT paid on such inventory.
C. The actual VAT paid on the beginning inventory
D. 2% of the value of beginning inventory
10. The VAT due on the sale of taxable goods, property and services by any person whether or not he has taken the
necessary steps to be registered
A. Input tax
B. Output tax
C. Excise tax
D. Sales tax
11. One of the following is not a transaction deemed sale:
A. Transfer, use or consumption not in the ordinary course of business, of goods or properties originally
intended for sale or for use in the course of business
B. Distribution or transfer to shareholders or investors of goods or properties as share in the profits of a VATregistered person or to creditors in payment of debt.
C. Retirement from or cessation of business, with respect to inventories of taxable goods on hand as of the
date of such retirement or cessation
D. Consignment of goods if actual sale is made within 60 days following the date such goods were consigned.
12. One of the following is not an activity subject to VAT
A. Sale in retail of goods by a dealer
B. Sale of bamboo poles by a dealer
C. Sublease of real property in the course of business
D. Importation of ordinary fees for poultry chicken
13. Which of the following is not correct?
I.
Any person who is not subject to mandatory registration because his actual or expected gross
sales/receipts from non-exempt business for the past 12 months do not exceed P3,000,000, may opt
to register under the VAT system, but shall not be allowed to cancel his VAT registration for the next
three years.
II.
Any person who is VAT-registered but enters into transactions which are exempt from VAT may opt that
the VAT apply to his transactions which would have been exempt but shall not be allowed to cancel his VAT
registration for the next three years.
III.
Franchise grantees of radio and/or television broadcasting whose annual gross receipts of the preceding
year do not exceed P10,000,000 may opt for VAT registration, but shall not be allowed to cancel his VAT
registration for the next three years.
A. III only
B. II only
C. I only
D. I, II, and III
14. Which of the following sales of real properties held primarily for sale to customers shall be subject to VAT?
A. Sale of parking lot where the selling price is P1,800,000
B. Sale of 2 adjacent residential lots in favor of one buyer from the same seller at P725,000 per lot.
C. Sale of 2 adjacent residential dwellings in favor of one buyer from the same seller at P1,225,000 per
residential dwelling
D. Sale to one buyer from the same seller of 2 condominium units which are combined and utilized as one
residential unit where the aggregate value of the adjacent units exceed P1,500,000
15. ABC Restaurant recorded the following sales during the month (based on menu prices)
To regular customers
To senior citizen
To person with disability
The output VAT is
A. P60,000
B. P72,000
Regular Customers
Multiply by:
Output VAT
C. P69,600
P560,000
224,000
112,000
D. P79,200
560,000
12/112
60,000
Senior Citizen and PWD - exempt from vat.
16. The taxpayer is a VAT registered real estate dealer:
Selling price (net of VAT)
Zonal Value
P6,000,000
6,300,000
FMV, in the assessment rolls
Payment made by the buyer
March 15, 2017
October 15, 2017
March 15, 2018
October 15, 2018
5,800,000
P750,000
750,000
2,250,000
2,250,000
I.
The output tax on March 15, 2017 collection is
A. P90,000
B. P756,000
C. P283,500
D. P94,500
II.
The output tax on March 15, 2018 collection is
A. P94,500
B. P270,000
C. P756,000
D. P283,500
I.
II.
Zonal Value (highest)
Multiply by:
6,300,000
12%
756,000
Zonal Value (highest)
750
Multiply by:
2,250
3/15/2017
Basis
750
6,000
Basis
756,000
2,250/6,000
Output tax
94,500
Output tax
283,500
17. Using the preceding number, but the FMV in the assessment rolls is P6,500,000
I.
The output tax on October 15, 2017 collection is
A. P780,000
B. P90,000
C. P97,500
II.
The output tax on October 15, 2018 collection is
A. P780,000
B. P135,000
0
750
780,000
2,250
3/15/2017
Basis
780,000
6,000
D. P270,000
C. P270,000
750
2,250
2,250
Multiply by:
Multiply by:
2,250
03-15-18
750/6,000
6,500,000
750
756,000
Multiply by:
FMV (highest amount)
750
0
750
2,250
756,000
6,300,000
D. P292,500
FMV (highest amount)
6,500,000
Multiply by:
12%
750
780,000
2,250
03-15-18
6,000
Basis
Multiply by:
750/6,000
Multiply by:
Output tax
97,500
Output tax
750
750
2,250
2,250
780,000
2,250/6,000
292,500
18. A is engaged in two (2) lines of business, one with VAT and the other is NON-VAT. His records show the following
(VAT not included)
Sales
From VAT business
P4,000,000
From Non-VAT business
6,000,000
Purchases
For VAT business
2,000,000
For Non-VAT business
3,000,000
Purchases from VAT suppliers used for both VAT and Non-VAT business
20,000
Operating expenses
1,800,000
I.
The VAT payable is
A. P600,000
B. P240,000
C. P237,600
D. P239,040
II.
The net income is
A. P3,180,000
B. P2,840,000
C. P2,818,560
D. P2,820,000
6,000
I. D - 239,040
Sales, VAT Registered
4,000,000
Multiply by:
0
Output Tax
480,000
Input Tax
Supplier
VAT Payable
II. C- 2,818,560
Non- VAT Expenses:
Sales
10,000,000
Purchases
Purchases
(5,020,000)
Purchase from vat registered
OPEX
(1,800,000)
Non- VAT Expense
(960)
Gross
3,180,000
239,040
Non- VAT Expense
12%
240,000
2,818,560
4000/10000
40%
1,440
361,440
(361,440)
Net Income
20,000
(360,000)
(240,000)
Purchases:
2,000,000
720,000
Sales
6,000,000
3,000,000
12%
0.04
12,000
12%
720,000
360,000
12%
1,440
8,000
12%
960
19. Monthly VAT declaration is filed on or before the
A. 10th day from the end of each month
B. 20th day from the end of each month
C. 25th day from the end of each month
D. 30th day from the end of each month
20. Quarterly VAT return shall be filed on or before the
A. The 10th day from the end of each quarter
B. The 20th day from the end of each quarter
C. The 15th day from the end of each quarter
D. The 25th day from the end of each quarter
21. An individual taxpayer operates a Grocery Store and is not VAT-registered. His annual gross sales amounted to
P2,900,000 for the year although his operations resulted to a net loss for the year 2018. He is subject to
A. 3% OPT
B. VAT
C. MCIT - 2%
D. None, because operation resulted in a loss
If he was qualified and chose to be taxed under the 8% income tax rate, he shall be subject to
A. 3% OPT
B. VAT
C. MCIT - 2%
D. None of the above
22. Which of the following lessors of residential units is/are subject to VAT?
A
B
No. of apartment units
100
20
Monthly rent/unit
P14,800
P15,000
A. B and D
B. C and D
C. B, C and D
D. D only
A - Exempt because the monthly rent is not more than 15,000
D
B - Exempt because the monthly rent is not more than 15,000, its just exact 15,000.
Monthly Rent
C - does not exceed 3M to be subject to VAT.
No. of units
Monthly Rent
Rent for every unit
No. of units
Rent for every unit
No. of Months in a yr
Amount
15,400
16
246,400
12
2,956,800
No. of Months in a yr
Amount
C
16
P15,400
D
18
P15,100
15,100
18
271,800
12
3,261,600
*exceed 3M - Subject to VAT
23. An imported an article from the US. The invoice value of the imported article was $7,000 ($1-P50). The following
were incurred in relation with the importation.
Insurance
P15,000
Freight
10,000
Postage
5,000
Wharfage
7,000
Arrastre charges
8,000
Brokerage fee
25,000
Facilitation fee
3,000
The imported article is subject to P50,000 custom duty and P30,000 excise tax. A spent P5,600 (inclusive of
VAT) for trucking from the customs warehouse to its warehouse in Quezon City. The VAT importation is
A. P60,000
B. P35,000
C. P50,500
D. P60,000
Invoice value
Insurance
Freight
Postage
Wharfare
Arrastre charges
Brokeage Fee
Custom duty
Excise tax
Total landed cost
Multiply by:
VAT on Importation
350,000
15,000
10,000
5,000
7,000
8,000
25,000
50,000
30,000
500,000
12%
60,000
24. Assuming that the imported article above was sold for P600,000, VAT exclusive. The VAT payable is
A. P11,400
B. P12,000
C. P9,500
D. P9,200
Output tax:
Sale of importation
Multiply by:
Input tax:
600,000
12%
5,600
VAT Importation
72,000
60,000
Trucking from the warehouse
600
12/112
60,600
600
Outpu tax
Less: Input Tax
VAT Payble
25. The A Bakers sells cakes and pastry to well known hotels in the Metro Manila area. The hotels are allowed credit
based on the track record of the hotels. The sale by the store in April 2018 was P224,000 including the VAT.
75% of the sales are normally on account. How much is the output tax for the month of April 2018?
A. P22,000
B. P20,000
C. P16,500
D. P24,000
Sales
Multiply by:
Output Tax
224,000
12/112
24,000
26. A, trader, made the following sales of goods during the month of June 2018, exclusive of VAT:
Cash sales
Open account sales
Installment sales
Note: receipt from installment sales
Consignment made (net of VAT)
June 15, 2018
May 15, 2018
April 15, 2018
Output tax is
A. P50,000
B. P34,000
C. P60,000
D. P72,000
P200,000
100,000
100,000
40,000
100,000
100,000
100,000
72,000
60,600
11,400
Cash Sale
Open account sales
Installment sales
Consignment:
June 15,2018
Total
Multiply by:
Output Tax
200,000
100,000
100,000
100,000
500,000
12%
60,000
27. A, VAT-registered, made the following purchases during the month of January 2018
Goods for sale, inclusive of VAT
Supplies, exclusive of VAT
Office air conditioner, total invoice amount
Home appliances for residence, gross of VAT
Repair of store, total invoice amount evidenced by ordinary receipt of the contractor
Creditable input taxes are
A. P26,400
B. P29,400
Goods for sale
Supplies
Office air conditioner
C P24,000
24,000
2,400
6,000
Creditable input tax
P224,000
20,000
56,000
17,600
4,400
D. P32,400
224,000
12/112
24,000
20,000
12%
2,400
56,000
12/112
6,000
32,400
28. A taxpayer registered under the VAT system on January 1, 2018. His records during the month show:
Value of inventory as of December 31, 2017 purchased from VAT registered person
P50,000
VAT paid on inventory as of December 31, 2017
6,000
Value of inventory as of December 31, 2017
60,000
Sales, net of VAT
140,000
Sales, gross of VAT
45,000
Purchases, net of VAT
70,000
VAT payable is
A. P11,100
B. P7,221
Output Tax
Sales ( 140,000 x 12%)
Sales (45,000 x 12/112)
Less:
Input Tax
Transitional Input Tax (60,000+50,000 x 2%)
Actual VAT Paid
Purchases (70,000 x 12%)
VAT Payable
C. P3,100
D. P3,400
16,800
4,821
(higher)
2,200
6,000
6,000
8,400
29. A VAT taxpayer purchased the following machineries for the second quarter of 2018 (VAT not included):
Life
Cost
Asset 1
April 10
4 years
P800,000
Asset 2
April 20
5 years
1,000,000
Asset 3
May 14
3 years
600,000
Asset 4
May 20
2 years
400,000
Asset 5
June 10
3 years
600,000
Asset 6
June 15
6 years
1,200,000
I.
The input tax for April 2018 is
A. P216,000
B. P4,000
C. P98,000
D. P122,00
II.
The input tax for May 2018 is
A. P124,000
B. P120,000
C. P8,000
D. P4,000
21,621
14,400
7,221
III.
The input tax for June 2018 is
A. P4,400
B. P8,400
C. P216,000
D. P146,000
IV.
The input tax for the quarter ending June 2018 is
A. P126,400
B. P134,400
C. P136,400
D. P17,400
V.
On January 2022, how much unutilized VAT may the taxpayer apply against any output VAT until it is
fully utilized?
A. P65,000
B. P70,500
C. P76,800
D. P89,300
I.
IV.
Asset 1
44,296
800000 x 12%
96,000
/48 months (4 years)
2,000
April
Asset 2
44,306
1000000 x 12%
120,000
/60 months (5 years)
2,000
May
April 2018, Input Tax
4,000
Asset 5 - June (200,000 x 12%)
24,000
4,000 divide 12 Months (excess month)
124,000
June
12
2,000
8,400
Input Tax
136,400
II.
Asset 3
44,330
600,000 x 12%
72,000
Asset 4
44,336
400,000 x 12%
48,000
Add: Deferred input tax, April
V. June 2018
120,000
Asset 4 (1000000 - 200000)
4,000
May 2018, Input Tax
1,000,000
Asset 5
124,000
Total Asset
600,000
1,600,000
Multiply by:
III.
Asset 4
44,357
600,000 x 12%
Asset 5
44,362
1,200,000 x 12%
72,000
/36 months
2,000
144,000
/60 months
2,400
Add: Deferred input tax, April
June 2018, Input Tax
4,400
Input tax, ending quarter
134,400
Less: outright Claim
57,600
Unutilized VAT
76,800
0
Input Tax
192,000
Less: Input tax ending quarter
134,400
Outright Claim
57,600
4,000
8,400
30. The following are the data of City Appliance Marketing Corporation, for the last quarter of 2017.
Sales up to December 15, total invoice value
Purchases up to December 15, net of input tax
P336,000
215,000
Additional information:
On December 16, 2017, City Appliance Marketing Corporation retired from its business and the inventory valued at
P190,000 was taken and transferred to New City Appliance Corporation. There is a deferred input tax from the
third quarter of P3,500.
How much is the total VAT due and payable by City Appliance Marketing Corporation in its operations in the last
quarter and its retirement from business?
A. P22,500
B. P3,500
C. P6,350
D. P29,500
Output tax
Sales upto December 15, 2017
Inventory on Dec. 16, 2017
Less:
Input Tax
Purchases (215,000 x12%)
Deferred Input Tax
VAT Payable
(336,000 x 12/112)
(190,000 x 12%)
36,000
22,800
(215,000 x 12%)
25,800
3,500
31. Assuming that New City Appliance Corporation has the following data for the first quarter of 2018:
Sales, total invoice value
Purchases, total invoice value
P448,000
224,000
58,800
29,300
29,500
How much is the VAT payable of New City Appliance Corporation for the firs quarter of 2018?
A. P28,000
B. P1,200
C. P30,000
D. P24,000
Output Tax
Input Tax
Sales (448,000 x 12/112)
48,000
Purchases (224,000 x 12/112)
24,000
Inventory, Dec. 16,2017
Transitional Input Tax (190,000 x 2%)
Actual Input tax Paid
Output Tax
48,000
Less: Input Tax
46,800
VAT Payable
1,200
3,800
(higher)
22,800
22,800
46,800
32. A Refining Company manufactures refined sugar. It had the following data during the first quarter of 2018:
Sales of refined sugar, net of VAT
P2,000,000
Purchases from farmers of sugar cane used in
500,000
manufacture of refined sugar
Purchases of Packaging materials, gross of VAT
784,000
Purchases of labels, gross of VAT
112,000
The VAT payable is
A. P124,000
B. P112,500
C. P70,000
D. P62,000
Output Tax
Sales of Refined Sugar (2,000,000 x 12%)
Less:
Input Tax
Presumptive Input Tax (500,000 x 4%)
On purchase of packaging materials (784,000 x 12/112)
On Purchases of labels (112,000 x 12/112)
VAT Payable
240,000
20,000
84,000
12,000
116,000
124,000
33. A, is a VAT registered dealer of appliances. The following data are for the last quarter of 2018:
Sales, net of output tax
Purchases, net of input tax
Sales return
Purchase return
Deferred input tax
The VAT payable for the last quarter of 2018 by A is
A. P120,500
B. P70,500
Sales, net of output tax
Less: Sales Return
Net Sales
Rate of Tax
Output Tax
6,800,000
200,000
6,600,000
12%
792,000
Purchases
Less: Purchase Return
Net Purchases
Rate of Tax
Input Tax
C. P80,000
5,500,000
300,000
5,200,000
12%
P6,800,000
5,500,000
200,000
300,000
9,500
D. P158,500
Output Tax
792,000
Less: Input Tax
624,000
Deferred Input Tax
VAT Payable
9,500
633,500
158,500
624,000
34. A VAT registered person is engaged in the sale of VAT taxable goods and at the same time is also engaged in a
non-VAT business, in the same business establishment. During the year, total sales of the VAT business
amounted to P336,000, inclusive of VAT. The sales of the non-VAT business amounted to P200,000 with a
separate percentage tax of P6,000 for a total of P206,000. During the same quarter, repairs on the building
amounted to P50,000 plus VAT of P6,000. Supplies purchased for common use amounted to P10,000 plus
P1,200 VAT. The creditable input tax is
A. P6,000
B. P7,200
C. P1,000
D. P4,320
35. Using the above data, the VAT payable is
A. P24,000
B. P25,000
C. P31,680
D. P26,400
Output Tax
Sales, Inclusive of VAT (336,000 x 12/112)
Sales, Non-VAT
200,000
Percentage Tax
6,000
36,000
Purchase Supplies for common use
206,000
Output tax
60%
4,320
36,000
Less: Creditable Input Tax
VAT Payable
4,320
31,680
36. M, building contractor, showed to you the following data:
Contract price, net
Cash received for labor (VAT included)
Cash received for materials (VAT included)
Receivables
Advances on other contracts still unearned (with VAT)
Cash received and held in trust, to be paid to one of his suppliers, Acme Warehouse, gross of
VAT
Payments to VAT-registered suppliers:
For materials, net of VAT
For suppliers, net of VAT
For services of sub-contractors (VAT included)
The VAT payable of M is
A. P228,000
B. P348,000
C. P350,000
Output Tax
Cash received for labor (3000000 x 12/112)
Cash received for materials (360000 x 12/112)
Advances on other contracts (1120000 x 12/112)
Less:
Input Tax
Materials (500,000 x 12%)
Supplies (100,000 x 12%)
Subcontractors (1680000 x 12/112)
VAT Payable
Selling price
VAT
Total
Multiply by
Output Tax
B. P60,000
P5,000,000
3,000,000
360,000
2,000,000
1,120,000
560,000
500,000
100,000
1,680,000
D. P360,000
321,429
38,571
120,000
60,000
12,000
180,000
37. A, a VAT taxpayer billed his customer:
Selling price
Value Added Tax
Total
The output tax is
A. P70,000
720
3,600
Creditable Input Tax
Ratio of vatable sales to total sales:
300,000/500,000
(10,000 x 12% x 60%)
Repair ( 50,000 x 12% x 60%)
480,000
252,000
228,000
P500,000
70,000
P570,000
C. P61,071
D. P68,400
500,000
70,000
570,000
12/112
61,071
38. A PEZA registered enterprise is paying the 5% preferential tax in lieu of all other taxes. Can the same enterprise
claim a TCC or refund from any VAT that it pays on its purchases?
A. Yes, because it should not be paying the VAT as it is exempt from all taxes whether direct or indirect.
B. No, since it is VAT exempt, it is not allowed to claim input tax credits
C. Yes, because the issuance of a VAT invoice to the PEZA registered enterprise was erroneous
D. None of the above
39. JL, went out on a date with Ceil, and her uncle, Tito Chris (senior citizen), in Mike ’s Bistro for Ceil’s birthday.
They order food which they all shares and the total bill amounted to P6,000, gross of VAT.
How much will Mike’s Bistro bill JL?
A. P1,785.71
B. P357.14
C. P5,428.57
Total Bill
Divide by
Contribution per person
Total Bill
VAT, JL and Ceil [(2,000/1.12) x 12%]
Senior Citizen Discount, Tito Chris
[(2,000/1.12) x 20%]
JL Bill
D. P5,543.45
6,000.00
3
2,000.00
6,000.00
(214.29)
(357.14)
5,428.57
40. M Corporation made total sales of P200,000 to the government. Purchases of supplies directly attributable to
such sales amounted to P120,000, net of VAT. Unattributed input tax allocated to such sales amounted to
P4,800. The government withheld a 1% EWT on such purchases.
How much will M Corporation received form the government?
A. P210,000
B. P200,000
C. P212,000
Government Sales
12% VAT
1% EWT
5% VAT Withheld
Amout Received
D. P222,000
200,000
24,000
(2,000)
(10,000)
212,000
41. In number 40, aside from the supplies of P120,000, what can M Corporation deduct in computing its taxable
income?
A. P19,200
B. P14,000
C. P5,200
D. P3,400
Old
Directly Attributable (120,000x12%)
Not directly attributable
Standard input tax (200,000 x 7%)
14,400
4,800
19,200
14,000
5,200
42. In January 2018, J. Reyes started a car repair business. He did not expect his gross receipts to exceed P3 Million
a year, and thus di not register for purposes of the VAT. He also signified in his first quarter ITR his intention to
be taxed under the 8% income tax rate option. However, by mid-June 2018, his receipts had already reached
the amount of P3,000,050.
When should J. Ryes register for VAT, and when will be start to become liable for VAT? Will he still pay OPT under
Section 116 of the Tax Code?
A. He should register in July 2018 which is the month following the month where his gross receipts exceeded
P3,000,000. He will become liable for VAT starting July 2018. He will be liable for OPT for the months
January to June 2018.
B. He should register within 10 days after the end of June or from July 1 to July 10, 2018. He shall be liable
for VAT on August 1, 2018. He will no longer be liable to OPT.
C. He should register within 10 days after the end of December (the last month of the 12 month period) or
from January 1 to 10, 2019. He shall be liable for VAT beginning on the 1 st day of the month following his
registration, or February 1, 2019. He will be liable for OPT from January to December 2018.
D. None of the above.
43. A Company, VAT-registered, is engaged in stockbrokerage and dealership in securities. It provided the following
data for the 2nd quarter of 2018:
Commission received from stockbrokerage:
Commission received (net)
Commission uncollected but earned
P150,000
250,000
Stock transactions are (VAT excluded)
A Stock
B Stock
C Stock
All 3 stocks were traded in the stock exchange.
Price
P500,000
600,000
800,000
Cost
P350,000
500,000
650,000
Supplies bought P88,000, VAT included
A. The percentage tax due is
B. The VAT of A is
P0 / P56,571
Input Tax
Commission received
150,000
Stock A
(500,000 - 350,000)
150,000
Stock B
Stock C
(600,000 - 500,000)
(800,000 - 650,000)
100,000
150,000
Total
Multiply by:
Output Tax
Output Tax
Less: Input Tax
VAT Payable
44. The
A.
B.
C.
D.
Supplies
(88,000 x 12/112)
550,000
12%
66,000
66,000
9,429
56,571
Bureau of Internal Revenue may use “Oplan Kandado” against the following taxpayer, except?
VAT registered person who fails to issue receipt
VAT registered person who fails to file VAT returns
VAT registered person who understates its taxable sales by 30%
VAT registered person who understates its purchase by 30%
45. A 3rd party, in behalf of a borrower, transfer his VATable land to a bank in settlement of a non-performing loan
of P100,000. The land had a book value of P70,000 and a FMV of P120,000 at the time of the dation in payment.
The 3rd party received from the borrower the amount of P80,000 for the dation. What are the tax consequences
of the dation in payment, if any?
A. The dacion or transfer shall be subject to VAT equivalent to 12% of the highest of P90,000, the zonal value,
or assessor’s value.
B. The 3rd party shall be liable for income tax on his gain of P10,000 (P80,000 - P70,000)
C. The 3rd party is liable for donor’s tax on the transfer for insufficient consideration where the insufficiency in
the consideration amounts to P40,000 (P120,000 - P80,000)
D. All of the above
9,429
2
The corporation had excess input tax credit from the previous quarter in the amount ofP3,900. In
February 2019, it chose to file an application for VAT refund/fCC in the amount Of P2,000. The
purchase of the depreciable capital goods is for the benefit of all its businesses.
What is the VAT payable for January, February, and March? P6,900: Ј14,200: and P19,074,
respectively. See computation in VAT return.
How do we compute the VAT payable in the BIR Forms:
Step 1: Compute for Output VAT from all VATable sales including sales to the
government.
Step 2: Compute for all Input VAT paid by adding (1) all creditable input VAT
arising during the period; (2) and any amount of input tax carried over from
the preceding period including excess input tax credits and unamortized input tax
credits.
Step 3: Reduce the total Input VAT computed in Step 2 by (1) any input tax on sale
to government closed to expense; (2) input tax allocable to VAT-exempt
sales; (3) amount of claim for VAT refund or TCC; and (4) ending balance of
unamortized input tax credits. The result shall be the total Allowable Input Tax
Credits.
Step 4: Total Output VAT - Allowable ITCs = Net VAT Payable.
Step 5: Net VAT Payable - Credits ((which include Advance VAT paid, VAT
withheld by the Government, and VAT paid in previous 2 months (if
computing Quarterly VAT payable)) = VAT still payable.