lOMoARcPSD|25958568
Tax Vat OPT - taxation ho
accountancy (Systems Plus College Foundation)
Studocu is not sponsored or endorsed by any college or university
Downloaded by Jayce unlock (jayceunlocks8@outlook.com)
lOMoARcPSD|25958568
INTRODUCTION TO BUSINESS TAX
1. Business taxes are
Imposed upon onerous transfers such as sale, barter, exchange or importation.
2. Under the tax code, the following are major internal revenue business taxes except:
a. Value-added tax
c. Excise tax
b. Percentage Tax
d. Income tax
3. Which is correct?
a. Without the business pursued in the Philippines (except importation) by the
taxpayer, value added-tax cannot be imposed.
b. “In the course of trade or business” means the regular conduct or pursuit of a
commercial or an economic activity including transactions incidental thereto,
by any person regardless of whether or not the person engaged therein is a
non-stock, non-profit private organization or government entity.
c. Services rendered in the Philippines by a non-resident foreign person shall be
considered as being rendered in the course of trade or business even if the
performance is not regular.
d. All Of the Above
4. Which statement is false?
D. Isolated sale of goods or services for gross selling price or receipts of
P950,000.
5. The provisions of vat law shall apply to person whose undertakings are intended to
be pursued on a going concern basis where the end view is to realize unrestricted
amounts of pecuniary gains or profits from those who may avail of the goods they
sell or the services they render. Which of the following statements is correct?
a. Services rendered in the Philippines by a citizen or resident person shall be
considered as being rendered in the course of trade or business even if the
performance is not regular.
b. Services rendered in the Philippines by a non-resident foreign person shall be
considered as being rendered in the course of trade or business even if the
performance is not regular.
c. Both a and b
d. Neither A nor B
6. Statement 1: Business taxes are based on gross income.
Statement 2: Business tax is in addition to income taxes.
ONLY STATEMENT 2 IS CORRECT
Downloaded by Jayce unlock (jayceunlocks8@outlook.com)
lOMoARcPSD|25958568
7. Which of the following statements is correct? In the case of sale, barter or exchange
or real property subject to vat.
a. Gross selling price shall mean the consideration stated in the sales document
or the fair market value, whichever is higher.
b. Fair market value shall mean whichever is higher of the fair market value as
determined by the BIR Commissioner or the fair market value as shown in
schedule of values of the Provincial and City Assessors.
c. Gross selling price, in the absence of zonal value or fair market value as
determined by the BIR Commissioner, shall refer to the market value shown
in the latest real property tax declaration or the consideration, whichever is
higher.
d. All of the above
8. Which of the following statements is correct?
I. Vat may be imposed together with the other percentage tax.
II. Vat may be imposed together with excise tax.
III. Vat and other percentage tax may be imposed together with income
tax.
II and III only
9. Statement 1: Gross selling price means the total amount of money or its equivalent
which is the purchaser pays or is obligated to pay to the seller in consideration of the
sale, barter or exchange of the goods or properties excluding VAT.
Statement 2: The excise tax, if any, on such goods or properties shall form part of the
gross selling price.
Both statements are correct.
10. As to tax rate, value added tax is an example of
Regressive tax
11. Which of the following statements is correct?
a. The seller of goods/services is the one statutorily liable to pay vat.
b. The “burden of the tax” is borne by the final consumers although the
procedures and suppliers of these goods and services are the ones who have
to file their vat returns to the Bureau of Internal Revenue. Hence, what is
transferred or shifted to the consumers is not the liability to pay the tax, but
the tax burden.
c. Both a and B
12. Which is correct?
a. All vat-exempt taxpayers shall be subject to other percentage taxes.
b. A taxpayer who is subject to percentage tax on his gross receipts will also be
subject to income tax on his net income.
Downloaded by Jayce unlock (jayceunlocks8@outlook.com)
lOMoARcPSD|25958568
c. Both a and b
d. Neither a nor b
13. Georgia is a manufacturer of GJ supermini-cigarettes. In making sales, taxes on the
products and transactions are passed on to the buyers. For vat purposes, which of
the following forms part of the gross selling price?
Excise Tax
14. Alex imported cigarettes for sale in the Philippines. What business tax will Alex pay?
1st Answer: Alex will pay Vat on importation and on the sale of the cigarettes.
2nd Answer: He will pay excise tax on importation of the cigarettes.
BOTH ANSWERS ARE INCORRECT
15. Which is correct?
a.
Vat registered person whose gross sales do not exceed P3 M
b.
A nonresident lessor or foreign licensor who is not vat registered.
c.
Any person who is required to register under the vat system but failed to register.
d.
None of the above
16. A non-VAT registered whose sales for the year exceeded P3 M is
Subject to percentage tax
17. Which is correct?
A percentage tax which is imposed whether the transaction resulted in again
or loss is called transaction tax.
18. A taxpayer imported cigarettes from China for sale. At later date, he sold the
cigarettes in the Philippines. He is subject to value-added tax. He is also subject to
business tax of
INCOME TAX
19. Which of the following is/are correct?
I.
Persons whose transactions are exempt from value added tax under Section
109 because their gross sales/and or receipts do not exceed P3M may
voluntarily apply for registration under the VAT system.
II.
A VAT-registered person whose gross sales and/or receipts for two (2)
consecutive years did not exceeded P3M may apply for cancellation of VAT
and revert to being VAT-exempt under section 109.
NEITHER I NOR II
20. Which is incorrect?
A person whose gross sales or receipts do not exceed P100,000 is exempt
from VAT provided he pays the 3% other percentage tax.
Downloaded by Jayce unlock (jayceunlocks8@outlook.com)
lOMoARcPSD|25958568
TRUE OR FALSE-SET A
1. Under RR-4-2007, agricultural and marine food products are shall be considered in their
original state even if they have undergone this simple processes of preparation or
preservation for the market, such as freezing, drying, salting, broiling, roasting, smoking
or stripping.- TRUE
2. Polished and/or husked rice, corn grits, raw cane sugar and molasses, ordinary salt, and
copra shall be not considered in their original state, hence subject to vat. – FALSE
3. Sale of flowers, in its original state is exempt from VAT. – FALSE
4. Sale of drugs and medicines of pharmacy run by the hospital to outpatients are subject
to VAT – TRUE
5. Pharmacy items used in the performance of medical procedures in hospital units such as
in the operating and delivery rooms and by other departments are considered part of
medical services rendered by the hospital, hence, not subject to VAT. -TRUE
6. Hospitals, clinics may allow their medical practitioners to receive payment of
professional fees directly from patients who were admitted and confined to such
hospital -FALSE
7. Professional fees of medical practitioners paid by the patients who were admitted and
confined to a hospital or clinic are subject to value added tax. - FALSE
8. Agricultural contract growers are subject to vat - FALSE
9. Contract for a package receiving eggs from breeder farm, sorting, and delivering them to
other contract grower are example of services offered by an agricultural contract grower.
- TRUE
10. Raw sugar for tax purposes refers only to muscovado sugar. - TRUE
11. Gross receipts of duly registered credit/multi-purpose cooperatives from lending
activities to non-members are subject to value added tax. -FALSE
12. Non-stock, non-profit private organizations which sell exclusively to their members in
the regular conduct or pursuit of commercial or economic activity are exempt from value
added tax.- TRUE
13. Government entities engaged in commercial or economic activity are generally exempt
from value added tax. – FALSE
14. Domestic sale of a vat-registered person to a person or entity who is granted indirect tax
exempt from VAT. – FALSE
15. Sale of passenger tickets by sea vessel from the Philippines to a foreign country is VAT
exempt transaction. – FALSE
16. The term “goods” for VAT purposes shall mean all tangible and intangible objects which
are capable of pecuniary estimate and shall include, but not limited to radio, television,
satellite transmission and cable television time. – TRUE
17. Export sale by a vat registered entity is exempt from vat - FALSE
Downloaded by Jayce unlock (jayceunlocks8@outlook.com)
lOMoARcPSD|25958568
18. Export sale by a non-vat registered entity is subject to vat – FALSE
19. The term “export sales” for VAT purposes, under Train law, shall include, but not limited
to actual export sale of goods. – TRUE
20. The input taxes attributable to zero-rated sales may be refunded or credited against any
other internal revenue taxes due from taxpayer. – TRUE
21. The input taxes attributable to the purchase of capital goods may be refunded or
credited against any other internal revenue taxes due from the taxpayer. – FALSE
22. Sale to one and the same buyer of adjacent residential lots, house and lots, and other
residential dwellings covered by separate titles and/ or separate tax declarations is
subject to value added tax.- FALSE
23. IF two or more adjacent residential lots are sold by the same seller to the same buyer,
within twelve (12) months, the sale shall be exempt from vat only if the aggregate value
of the lots do not exceed P1,500,000 beginning 2018 taxable year. - TRUE
24. For vat purposes, condominiums, including its allotted parking space, are classified as
other dwellings. – FALSE
25. For vat purposes, residential unit shall refer to apartments, houses and lots, used for
residential purposes excluding buildings or parts or units thereof used solely as dwelling
places. – TRUE
TRUE OR FALSE – SET B
1. Transaction treated as sales due to the absence of actual exchanges are subject to VAT. TRUE
2. The Output VAT is computed by multiplying the gross selling price by 12% or multiplying
the total amount indicated in the invoice by 12/112. - TRUE
3. Sales to International Rice Research Institute (IRRI) as well as companies registered
under Subic Bay Metropolitan Authority (SBMA) are exempt from VAT. - TRUE
4. The input taxes attributable to the purchase of capital goods may be refunded or
credited against any other internal revenue taxes due from the taxpayer. – FALSE
5. An importation of goods by a non-profit charitable organization shall not be subject to
the VAT. – FALSE
6. In the case of importation, the importer is not the one liable for the VAT but the person
who shall buy the imported goods. – FALSE
7. The VAT on importation is always based on the dutiable value of the article imported, as
determined by the Bureau of Internal Revenue, including customs duties and excise
taxes. – FALSE
8. Input VAT for the acquisition of capital goods with aggregate acquisition cost of not more
than P1,000,000 for the year should be allocated based on the life of the related asset
but not to exceed 60 months– FALSE
Downloaded by Jayce unlock (jayceunlocks8@outlook.com)
lOMoARcPSD|25958568
9. Vat on importation is imposed regardless of whether such importation is for personal or
business use. - TRUE
10. Facilitation expense shall be included in the determination of applicable input vat on
importation – FALSE
11. Persons or firms engaged in the processing of sardines, mackerel and milk, and in
manufacturing refined sugar and cooking oil, shall be allowed a presumptive input tax of
two percent (2%) of the gross value in money of their purchases of primary agricultural
products which are used as inputs to their production – FALSE
12. Presumptive input vat are creditable against output tax only if the taxpayer is allowed to
avail for 0% vat on its export sales – FALSE
13. VAT taxpayers except corporations use calendar quarters for VAT purposes. - TRUE
14. Gross receipts from lease of commercial units are subject to 12% vat regardless of the
place where the property is located. – FALSE
15. Withholding of vat is done when the buyer is the government or any of its political
subdivisions. - TRUE
16. On installment sale by a real estate dealer, the installment VAT is allowed only if the
initial payments on the sale do not exceed twenty-five percent (25%) of the gross selling
price. - TRUE
17. Initial payments do not include notes or other evidences of indebtedness issued by the
purchaser to the seller at the time of sale. - TRUE
18. If the mortgage assumed exceed the cost to the seller, the excess shall be part of the
initial payments. - TRUE
19. Services subject to other percentage taxes are subject to VAT. – FALSE
20. Transaction deemed sales are not actual sale, hence, exempt from vat. – FALSE
21. A taxpayer imported cigarettes from China for sale in the ordinary course. He is subject
to VAT and EXCISE TAX. - TRUE
22. A nonresident foreign lessor or licensor who is not VAT registered is subject to VAT. TRUE
23. Isolated transactions of nonresident foreign persons are subject to VAT. - TRUE
24. Persons whose transactions are exempt from value added tax under Section 109
because their gross sales/ and or receipts do not exceed P3,000,000 as amended may
voluntarily apply for registration under the VAT system. - TRUE
25. A person whose gross sales/receipts do not exceed P100,000 is exempt from VAT
provided he pays the 3% Other Percentage Taxes (OPT). – FALSE
Downloaded by Jayce unlock (jayceunlocks8@outlook.com)
lOMoARcPSD|25958568
MULTIPLE CHOICE – VAT EXEMPT TRANSACTIONS
1. Which of the following shall not be subject to vat?
I.
MP Promotions, vat registered, but gross sales for the year do not exceed P3M.
II.
Mayweather Corporation, a foreigner licensor or nonresident lessor who is not
vat registered.
III.
Mailag Company, a domestic corporation required to register under vat system
but failed to register.
Answer: NONE OF THE ABOVE
2. A lessor of residential units shall be exempt from vat when
I.
Annual gross receipts do not exceed P3M
II.
Monthly rental per unit does not exceed P15,000
Answer: EITHER I OR II
3. A lessor of commercial units shall be exempt from vat when:
Annual gross receipts do not exceed P3 M
4. Which of the following is subject to vat?
Sale of olive oil
5. One of the following goods is not in its original state
Refined brown sugar
6. One of the following is not a livestock for VAT purposes
Racehorse
7. One of the following is not a poultry for VAT purposes
Fighting cock
8. JJ owns a mango plantation. He sold his ripe mangoes to Paul, a fresh fruit vendor. Paul
sold the ripe mangoes he bought from JJ to Francis. Who shall be the subject to vat?
a. JJ
b. Paul
c. Francis
d. None of the above
9. Talion owns Eternal Gardens. He harvested fresh flowers and sold them to Joseph.
Joseph sold the flowers in their original state to Alex. The sale of flowers by Joseph to
Alex shall be:
Subject to vat
10. Which of the following is the benefit of vat registered taxpayer if he is subject to zero
percent (0%) vat rate?
He does not have any output tax although he may have an input tax credit which
can be claimed for refund.
Downloaded by Jayce unlock (jayceunlocks8@outlook.com)
lOMoARcPSD|25958568
11. Which of the following transactions is subject to value-added tax?
Sale of coal and natural gas
12. Which of the following shall be exempt from value-added tax?
I.
Sales by agricultural cooperatives, duly registered with the Cooperative
Development Authority to their members as well as sale of their products,
whether in its original state or processed form, to non-members
II.
Gross receipts from lending activities by credit or multi-purpose cooperatives
duly registered with the Cooperative Development Authority.
III.
Sales by non-agricultural, non-electric and non-credit cooperatives duly
registered with the Cooperative Development Authority.
Answer: I and II only
13. Which of the following transactions is exempt from value-added tax?
Sale of books, newspaper and magazines
14. All of the following except one, are subject to VAT
a. Importation of radio and television equipment by broadcasting and television
station.
b. Lease of cold storage rooms in ice plants and cold storage
c. Sale of paintings
d. None of the above
15. Which of the following transactions is exempt from value-added tax?
Services arising from employee-employer relationship.
16. Which of the following is not subject to VAT?
Franchise grantees of radio broadcasting whose gross receipt from the preceding
year was P9M.
17. Which of the following is not correct?
Non-stock, no-profit private organizations are not subject to vat if their income
from sales is used for non-profit purposes.
18. One of the following is not subject to vat on importation
Goods exempt from customs duties classified as personal and household effects
belonging to residents of the Philippines returning from abroad.
19. Gross selling price includes all of the following except
Value-added tax
20. Villamin Grill, a vat registered business in Cavite, has the following data (exclusive of vat)
for the third quarter of the current year.
Sales, food and beverages
P2,805,000
Sales, wines and beer
1,524,000
Downloaded by Jayce unlock (jayceunlocks8@outlook.com)
lOMoARcPSD|25958568
Purchases, food and beverages-vat business
Purchases, wines and beer-vat business
The vat payable due to third quarter is
1,102,200
1,012,500
Output Vat (P2,805,500 +P1,524,000) x 12%
P519,540
Input vat (P1,102,200+P1,012,500) x 12%
(253,746)
Vat Payable
P265,780
21.
Hananiah Corporation has the following sales and purchases for
the quarter ending December 31,2018:
October
Sales
50,000
Purchases
40,000
Nov & Dec Sales
100,000
Purchases
80,000
Carry-over input tax from previous quarter
6,000
How much Is the vat payable (carry-over) for the quarter ending December
31, 2018?
Output Vat, 3rd quarter (P150,000 x 12%)
P18,000
Input vat, 3rd quarter (P120,000 x 12%)
Deferred input vat – previous quarter
(6,000)
Vat Payable (Carry-over)
(P2,400)
22.
Which of the following statements is correct?
Downloaded by Jayce unlock (jayceunlocks8@outlook.com)
(14,400)
lOMoARcPSD|25958568
a. Export sale by a vat registered person is subject to 0% vat
b. Export sale by a non-vat registered person is subject to 3 %
percentage tax
c. Both a and b
23.
Which of the following statements is correct?
a. Under RA7916, while an economic zone registered under PEZA
is geographically within the Philippines, it is deemed a
separate customs territory and is regarded in law as foreign
soil.
b. Sales by suppliers from outside the borders of the economic
zones to the entities within the separate customs territory are
deemed as exports and treated as export sales.
c. Both a and b
24.
Which of the following statements is correct?
a. Sale to export oriented enterprises is considered export sales
under the tax code at the level of the supplier of raw
materials only.
b. Sale of raw materials or packing materials to an exportoriented enterprise is considered export sales only when
export sales of such enterprise exceed 70% of total annual
production.
c. Both a and b
25.
Which among the following is subject to 0%?
a. Sale, importation or lease of passenger or cargo vessel and
aircraft including engine, equipment and spare parts thereof
for domestic or international transport operations.
b. Importation of fuel, goods and supplies by persons engaged I
international shipping operations.
c. Transport of passengers and cargo by a domestic carrier(air or
sea) from the Philippines to foreign country.
d. All of these
Downloaded by Jayce unlock (jayceunlocks8@outlook.com)
lOMoARcPSD|25958568
26.
One of the following is a zero-rated sale under TRAIN Law.
Sale of gold to Bangko Sentral ng Pilipinas
27.
Under the TRAIN Law, which of the following sales is not be zerrated?
a. Export slaes
b. Foreign currency denominated sales
c. Sale of goods to the Asian Development Bank
d. None of the above
28.
In lease contract, which of the advance payment by the lessee is
subject to the output VAT?
Prepaid rental
29.
Which of the following shall be subject to vat?
Sale of commercial property by a real estate dealer for
P1.5 M
30.
On January 1, 2018, Pedro purchased a condominium unit worth
P2M from Maxima Realty Corporation. A month after, Pedro purchased
the adjacent unit for the same consideration. The purchased of the
second (adjacent unit) is
Subject to vat
31.
On January 1, 2018, Pedro purchased a condominium unit
including a parking space worth P4.2M from Maxima Realty
Corporation. The value of the condominium unit, as stated in the
contract of sale was P3.2M, while the parking space was worth P1M.
The transaction is
Exempt from VAT
32.
Which statement is correct? Leasing a property shall be subject
to value added tax on sale of services:
a. If the property is in the Philippines and the lease agreement
was executed in the Philippines
Downloaded by Jayce unlock (jayceunlocks8@outlook.com)
lOMoARcPSD|25958568
b. If the property is in the Philippines and the lease agreement
was executed outside the Philippines
c. If the property is in the Philippines and the lease agreement
was executed within or outside the Philippines
d. All of the above
33.
Which of the following receipts for 2018 current year from lease
of residential units is subject to vat?
II. Monthly rental per unit-18,000; Aggregate annual rent-3,800,000
IV. Monthly rental per unit -P20,000; Aggregate annual rent4,000,000
Answer: II and IV
34.
Which is true? On sale of service, the tax base in computing for the
vat is
Gross receipts
35.
In the value added tax on sale of services, the output tax is
computed:
On collections of the month on all billings made
36.
Which of the following statement is false?
For purposes of claiming input tax, as a purchase of service,
the value of which shall be determined based on the
progress billing.
37.
The following information and data (net of vat) are from the records
of Fantastic $ Corporation, a VAT taxpayer in connection with its
construction contracts. They cover the third quarter of 2018 taxable
year. Vat payable for the quarter is (disregard monthly payments)
AR, July 1
Billings, July-Sept.
AR, Sept. 30
Collections
Output vat @ 12%
Input vat on purchases @ 12%
Downloaded by Jayce unlock (jayceunlocks8@outlook.com)
180,000
850,000
(120,000)
910,000
109,200
(57,600)
lOMoARcPSD|25958568
Vat Payable
51,600
38.
GJ is a contractor. He entered into a contract on September 1,
2018 which was completed on September 30, 2018. On the same date,
he received the total value of the contract amounting to P5.5 M. GJ
spent for the materials used in the contract which he acquired from the
value added registered suppliers costing P1.5 M. All amounts are
exclusive of VAT. The vat payable by GJ for the month of September is
Output vat (P5.5M x 12%)
Input vat on materials
Vat Payable September
660,000
(180,000)
480,000
39.
JJ Contractor entered into a contract on October 2017 to build a
warehouse for Francis Corporation. The total contract price amounting
to 10,000,000 was received by JJ upon completion on June 30, 2018.
Materials purchased during construction valued at 4,000,000 were paid
on June 1, 2018 while construction equipment worth 3,000,000 (net of
vat) was purchased on January 1, 2018 with the following terms; down
payment-P500,000 balance payable every January 1 until fully paid
starting 2019. The equipment was estimated to last for six years. How
much is the vat payable of JJ for June 30, 2018?
Output vat (P10M x 12%)
1,200,000
Input vat on materials
(480,000)
Input vat on capital goods (P3Mx12%) /60 mos.
(36,000)
Vat Payable June 30
P684,000
40. . A merchant of stock or securities, whether individual, partnership, or
corporation, with an established place of business, regularly engaged in the
purchase of securities and the resale thereof to customer, and who, as a
merchant buys securities and resells them to customer with a view to the gains
and profits that may be derived there from.
Dealer in securities
41. A dealer in securities has the following for the year 2018
Downloaded by Jayce unlock (jayceunlocks8@outlook.com)
lOMoARcPSD|25958568
Sales, shares held as inventory
5,000,000
Cos of shares, held as inventory
(2,000,000)
Gross income
Vat rate
3,000,000
x 12%
Output vat
360,000
Les: Input vat
Supplies expense
(12,000)
Rent expense
(24,000)
Vat payable
P324,000
42.
Which of the following is correct?
I.
Certain transactions which are not actually sale because of the
absence of actual exchange between the buyer and the seller,
are considered sale for vat purpose.
II. Output vat should be imposed on certain transactions which
are not actually sale to avoid a situation where a vat registered
taxpayer avail of input vat credit without being liable for the
corresponding output vat.
Answer: Both I and II
43.
Which statement is correct? The output value added tax on goods
or properties sold:
May be due even in the absence of actual sale
44.
Which of the following is not a sale and therefore is not a subject to
the value-added tax?
Consignment sales
45.
One of the following is a transaction deemed sale under valueadded tax
Downloaded by Jayce unlock (jayceunlocks8@outlook.com)
lOMoARcPSD|25958568
Distribution or transfer to creditors in payment of debt.
46.
“Deemed sale” for VAT purposes includes inventories of taxable
goods existing at the time of:
Dissolution of a partnership and the creation of new
partnership.
47.
Choose the correct statement(s)from the following:
a. A non-vat registered person could not claim the input vat on
its purchases as tax credits against its business taxes.
b. In the books of vat registered person, the input vat is an asset
account.
c. Purchases on account from vat registered supplier is a source
of creditable input vat.
d. All of the above
48.
Which statement is not correct?
The excess input taxes of a taxable period arising from domestic
sales may be refunded.
49.
Serbesa Company is a manufacturer of local beer. During a
particular quarter; it had the following transactions (net of VAT):
Jan 2:
Consigned beer to a retailer in QC amounting to 200,000
Feb 14: Exported P1M worth of beer to UK
Feb. 27: President of Serbesa Company celebrated his birthday,
consuming 50,000 worth of beer given to him by the company as
a birthday gift.
Mar 20;
Declared property dividend of one case of beer for
every 10 shares amounting to 150,000
Additional information: From January to March, domestic sales to
wholesalers amounted to 600,000. No beer was returned by the
consignee until the end of the quarter. The output tax of the
quarter is:
Domestic sales (P600k x12%)
Downloaded by Jayce unlock (jayceunlocks8@outlook.com)
72,000
lOMoARcPSD|25958568
Add: Transaction deemed sales
Jan 4 consignment (200k x 12%)
24,000
Goods consumed on Feb 27 (50k x12%)
6,000
Property dividends (150k x 12%)
18,000
TOTAL OUTPUT VAT
50.
120,000
Which of the following importation is subject to vat?
a. Importation of personal use of importer
b. Importation intended for resale
c. Importation of machinery for the importers factory
d. All of the above
51.
Lester, not a vat registered taxpayer, was sent a package of
goods by his friend, Clifford, who was abroad. The package was
claimed by Lester. The Bureau of Customs required him to pay vat on
importation. Lester refused to pay the vat claiming that since he is a
non-vat registered person and that the package sent to him is intended
for personal use only, he should be exempt from paying input vat on
importation. Was Lester’s ground in refusing to pay the vat correct?
No, because importations, unless exempted, should be subject to
vat.
52.
Which of the following statements is correct?
I.
An importation of goods by a non-profit charitable
organization shall not be subject to the value added tax.
II.
In the case of importation, the importer is not the one
liable for the vat but the person who buy the imported
goods.
III.
Non-exempt persons, entities or agencies shall be
considered
the
importer
for
Philippine
VAT
purposes.
Downloaded by Jayce unlock (jayceunlocks8@outlook.com)
lOMoARcPSD|25958568
53.
Which of the statement is correct? VAT on importation
Should be paid by non-tax exempt purchaser to whom
the tax exempt importer sells it.
54.
One of the following is not subject to VAT on importation
a. Goods brought into the Philippines in the course of trade or
business by vat registered person.
b. Goods brought into the Philippines not in the course of trade
or business by a person who is not vat registered.
c. Tax free goods imported by tax-exempt importer who
transferred them to a person who does not enjoy exemption from
importation of tax
d. Goods exempt from customs duties classified as
personal and household effects belonging to residents of the
Philippines returning from abroad.
55.
Which of the following is not a proper inclusion for the computation
of
VAT
on
imported
items?
a. Custom duties on importation
b. Excise tax on importation
c. Invoice price of the imported items
d. Facilitation expense
56.
Input vat on purchases of capital assets shall be spread
(amortized over 60 months or useful lives of the capital assets if
shorter than 60 months) when:
a. Capital assets have been acquired from enterprises registered
with and located at the export processing zones
b. Value of asset, excluding VAT, exceeds P1,000,000.
c. Aggregate monthly purchases
excluding VAT, exceeds P1,000,000.
of
Downloaded by Jayce unlock (jayceunlocks8@outlook.com)
capital
assets,
lOMoARcPSD|25958568
d. VAT taxpayer has secured prior approval for him to amortized
input tax on purchases of capital assets.
57.
Statement 1: The input value-added tax on purchase of
capital goods valued at P1,000,000 shall be spread over 60 months if
the life of property is equivalent to 5 years or more.
Statement 2: The input value-added tax on purchase of capital
goods valued at P1,000,000 shall be spread over the life of property if
the life property is less than 5 years.
a.
Statements 1 & 2 are false
b.
Statement 1 is true but statement 2 is false
c.
Statement 1 is false but statement 2 is true
d.
Both Statements are true
58.
For the purposes of claiming input vat on depreciable asset,
the aggregate acquisition cost of a depreciable asset in any calendar
month refers to the:
Payments actually made during the calendar month
59.
A taxpayer has excess credit as a result of input taxes paid on
purchase of capital goods. He may:
Carry-over and apply his excess tax credit against output taxes in
the subsequent period or periods.
60.
If the depreciable capital goods is sold or transferred within a
period of 5 years or prior to the exhaustion of the amortizable input tax
thereon, the unamortized input tax on the capital goods sold or
transferred can be:
Claimed as input tax credit in its entirely during the month or
quarter when the sale or transfer was made.
61.
Persons or firms engaged in the processing of sardines,
mackerel and milk, and in manufacturing refined sugar and cooking oil
shall be allowed.
Creditable input tax & transitional input tax
Downloaded by Jayce unlock (jayceunlocks8@outlook.com)
lOMoARcPSD|25958568
62.
Which of the following businesses is allowed a presumptive
input vat?
Manufacturer of packed noodles
63.
Who may claim transitional input tax as tax credit against
output tax?
VAT taxpayer from being VAT exempt or non-VAT taxpayer
64.
tax.
One of the following shall not be entitled to transitional input
Taxpayers who elect to revert to being a vat exempt from being vat
subject
65.
Once optionally registered as a vat person, the taxpayer shall
be liable to output tax and be entitled to input tax credit beginning on
the
First day of the month following the registration
A VAT taxpayer had the following data on its operations for the month of
January;
Sales, total invoice
Purchases of goods, Vat not included:
From vat registered persons
From non-vat registered persons
Purchases of services, Vat not included:
From Vat registered persons
From non-vat registered persons
From persons subject to percentage taxes
Salaries of employees
Other operating expenses
592,480
100,000
80,000
20,000
8,000
10,000
60,000
12,000
This is the first month of being liable to the value added tax. Data on
inventories at the beginning of the period bought from VAT registered
persons follow:
Inventory at cost
Inventory at net realizable value
Value added tax paid on beginning inventory
66.
Input taxes are 19,200
Downloaded by Jayce unlock (jayceunlocks8@outlook.com)
44,800
49,000
4,800
lOMoARcPSD|25958568
67.
The value added tax payable is 44,280
Output vat (P592,480 x 3/28)
Less: Input Vat
Purchases of goods (P100,000 x 12%)
Purchases of services (P20,000 x 12%)
Transitional input vat
(19,200)
VAT Payable
P44,280
63,480
(12,000)
(2,400)
(4,800)
68.
Statement 1: The government or any
of its political subdivisions, instrumentalities or agencies, including
government-owned or controlled corporations (GOCCs) shall, before
making payment on account of each purchase of goods and/or subject
to VAT, deduct and withhold a final VAT due at the rate of five percent
(5%) of the gross payment thereof
Statement 2: The five percent (5%) final VAT withholding rate shall
represent the net VAT payable of the seller.
Both are true
69.
Empleo
Construction
Company
entered into a contract with the government to construct an edifice for
a total contract price of P25,000,000. During the month, the
government paid P10,00,000 of which it withheld 5% final withholding
tax. How much is the VAT payable by the company on the government
contract?
P0
70.
Statement 1: On a sale of real
property on installments by a real estate dealer, the seller shall be
subject to VAT on the installment payment received, including interests
and penalties for late payment.
Statement 2: On sale of real property on installments by real estate
dealer, where the Vat is computed not on the consideration in the deed
of sale but on the higher fair market value, the Vat must be billed
separately with a specific mention that it is based on the market value
of the property.
Both are true
Downloaded by Jayce unlock (jayceunlocks8@outlook.com)
lOMoARcPSD|25958568
71.
Statement 1: In the case of sale on deferred payment basis not
qualifying under the installment plan, the transaction shall be treated
as cash sale and the Vat is payable on the month of sale.
Statement 2: In the case of sale on deferred payment basis not
qualifying under the installment plan, payments subsequent to the
initial payments shall no longer be subject to vat.
Both are true
Ivan, vat registered real estate dealer sold a residential lot on October 2018.
The following information was made available on the terms of the sale:
Gross selling price
P3,000,000
Initial payments consisting of down payment and
900,000
installments in the year of sale
Balance to be paid in equal installments of P700,000
2,100,000
starting January 2019
The zonal value of the residential lot was P2,800,000.
72.
How much was the output tax due on October 2018?
Answer: 360,000
Output Vat for October 2014 = P3M x 12 = P360,000
Ratio of Initial Pay’t over Gross S.P. = P900,000/P3,000,000 =
30%
If initial payment is more than 25% of Selling Price, the sale is
classified as Deferred Sale which is treated as Cash Sale.
Therefore, the entire output vat is due on the month of sale.
73. How much was the output tax on January 2019?
Answer: P0
Output Vat for 2015 = P0; The entire output vat was paid in 2014
74. Lady sells real property in the course of its business. During the last quarter of
2018, it had sold a parcel of land under the following terms (vat inclusive):
Downpayment
1st installment payment
Downloaded by Jayce unlock (jayceunlocks8@outlook.com)
P112,000
112,000
lOMoARcPSD|25958568
Total (vat inclusive)
Less: VAT (P224,000 x 3/28)
Initial Payment (exclusive of vat)
Divided by contract price (P1.12M x 3/28)
Ratio of Initial Payment over SP
Output vat for 2017 (200k x12%)
224,000
(24,000)
P200,000
1,000,000
20%
P24,000
75.
Alex is in the course of trade selling real property. During the
month of February, it had the following data (per sales document,
inclusive of vat). How much is the output vat on the sale of real
property?
Total contract price
Downpayment,10/05/2018
1st installment (12/31/2018)
2nd installment (2/1/2019)
VAT ON CASH SALE:
(ZV is higher than SP)(600,000 x 12%)
VAT ON DEFERRED SALE:
Ration of initial payment over SP>25%
(Deferred Sale)
(Treated as cash sale; SP is higher than FMV)
[(336,000/1.12)x12%]
_________
TOTAL OUTPUT VAT
108,000
P1,120,000
112,000
112,000
560,000
P 72,000
36,000
P
76.
Which of the following is not correct pertaining to the
transactions of a business which is engaged in Vat and Non-vat
transactions?
Only one invoice for both VAT and NON-VAT transactions shall be
issued
77.
Which of the following statements is wrong? When a purchase
from a VAT-registered person is for use both in the VAT and NON-VAT
business of purchaser, the VAT component of the total amount paid for
the purchase:
Must be allocated immediately and at the time of purchases
between the VAT and NON-VAT business
Downloaded by Jayce unlock (jayceunlocks8@outlook.com)
lOMoARcPSD|25958568
A VAT-registered person is engaged in the sale of VAT taxable goods and at
the same time is also engaged in non-VAT business, in the same business
establishment. During the quarter, the taxpayer made sales of goods in the
amount of 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 in the building amounted to
P56,000 inclusive of vat. Supplies purchased for common use amounted to
P11,200 inclusive of vat.
78.
The creditable input tax is P4,320
Input tax (56,000+11,200)x 3/28 x 300/500 = 4,320
79.
The vat payable is P31,680
Output vat
P36,000
Input vat
Vat Payable
(4,320)
P31,680
80.
Data for a trader with one line of business subject to VAT and
another line of business not subject to VAT:
Sales, vat business, vat included
Sales, non vat business
Purchases of goods, vat business, vat included
Purchases of goods, nonvat business, vat included
Purchase of depreciable asset, for use in vat and nonvat
112,000
business, vat included
Purchases of supplies, for vat and non vat business, vat
2,240
included
Rental of premises, for vat and non vat business, from
22,400
non vat registered person
P896,000
200,000
224,000
33,600
The VAT payable shall be: P62,208
OUTPUT VAT (896,000 x 3/28)
INPUT VAT
Purchases of goods, vat business, vat included
(24,000)
(224,000 x 3/28)
Mixed transactions:
Purchases of supplies, for vat & nonvat business
Downloaded by Jayce unlock (jayceunlocks8@outlook.com)
P96,000
lOMoARcPSD|25958568
[(112,000 x 3/28)x(800,000/1,000,000)]
(9,792)
Purchases of depreciable asset, for use in vat and
nonvat business [(2,240 x 3/28) x (800,000/1,000,000)]
__________
VAT PAYABLE
P62,208
The following data during the month relates to William Company, a VAT
registered person:
Domestic sales, invoice amount
Domestic sales to export traders
Export sales
Purchases of goods for domestic sales
Purchases of supplied on domestic sales
69,848
Purchase of serves
Purchase of goods for export
55,000
81.
P330,000
274,996
200,000
374,000
154,000
Total input tax is 69,948
(374,000 + 69,848 + 154,000 +55,000) x 3/28 = 69,948
82.
VAT payable/excess tax if input taxes on exports are claimed as
tax credit.
Output VAT
Domestic sales (330,000 + 274,996) x 3/28
P64,821
Export sales (zero rated)
0
Input VAT
VAT payable
(P5,127)
83.
A VAT registered person has the following data:
Export sales, total invoice amount
P400,000
Domestic sales, total invoice amount
672,000
Purchase of raw materials, used to manufacture goods
560,000
for export and domestic sales, VAT inclusive
Downloaded by Jayce unlock (jayceunlocks8@outlook.com)
(69,948)
lOMoARcPSD|25958568
Supplies used for both export and domestic sales, VAT
448,000
inclusive
Purchase of equipment used in the manufacture of goods
300,000
for export and domestic sales, VAT exclusive
The amount of input tax which can be refunded or converted into tax credit
certificates at the option of the VAT-registered person is: 57,600
Raw materials (P560k x 3/28) x 400k/1M
P24,000
Supplies (448k x 3/28) x 400k/1M
19,200
Equipment (300K x 12% x 400k/1M
INPUT VAT attributed to export sales
P57,600
14,400
84.
In order that an invoice will qualify as a VAT invoice or receipt for
purposes of claiming tax credit for input tax, it must contain:
The vat registration number
85.
Quarterly VAT return is filed on or before the:
30th day from the end of each quarter
86.
Mr Juan Dela Cruz, VAT-exempt, issued VAT invoice to Pedro, VATregistered trader. As a consequence, Mr. Juan Dela Cruz would:
Not be liable to VAT because he is VAT-exempt
87.
Statement 1: If the sale involves goods, properties or services
some of which are subject to and some of which are VAT zero-rated or
VAT-exempt, the invoice or receipt shall clearly indicate the break-down
of the sales price between its taxable, exempt and zero-rated
components, and the calculation of the VAT on each portion of the sale
shall be shown on the invoice or receipt.
Statement 2: The seller has the option to issue separate invoices or
receipts for the taxable, exempt, and zero-rated components of the
sale.
Statement 1 is FALSE but statement 2 is TRUE
Downloaded by Jayce unlock (jayceunlocks8@outlook.com)
lOMoARcPSD|25958568
OTHER PECENTAGE TAX
TRUE OR FALSE
1. Persons not subject to vat are likewise exempt from other percentage
tax.-FALSE
2. Persons subject to 3% percentage tax on vat exempt sales or receipts
shall have the option to register under the vat system which shall not be
revoked for a period of three (3) years.-TRUE
3. Domestic common carriers by air or sea are subject to vat on their
gross domestic receipts from their transport of passengers, goods or
cargoes from one place in the Philippines to another place in the
Philippines.- TRUE
4. International flights or shipments of domestic carriers by air or sea
shall either be subject to 0% vat, vat exempt, or 3% common carrier's tax
depending on whether or not the entity is vat registered.- FALSE
5. The gross receipts of domestic common carriers derived from their
incoming and outgoing freight shall be subject to the local taxes imposed
under the Local Government Tax Code.- FALSE
6. The 3% common carrier's tax for domestic common carriers is based
on the actual quarterly gross receipts or minimum quarterly receipt
whichever is lower.-FALSE
7. International air and shipping carriers shall be subject to 3%
percentage tax based on on gross receipts derived from Philippines
sources.- FALSE
8. International air carriers and international shipping carriers shall not be
subject to 13% value added tax (passengers and cargo) for the reason
that vat is applicable only on sale of goods or services rendered in the
Philippines. - TRUE
9. International flights or shipments of international carriers are not
considered sale of services rendered in the Philippines.-TRUE
10. International carriers are exempt from vat under the tax code.
However, they have the option to register under the vat system which
shall be irrevocable for a period of 3 years.- FALSE
Downloaded by Jayce unlock (jayceunlocks8@outlook.com)
lOMoARcPSD|25958568
11. The 3% percentage tax for international carriers is in the addition to
income tax. - TRUE
12. "Reciprocity" may be invoked by an international carrier as basis for
exemption from 3% common carriers tax. -FALSE
13. A franchise is a privilege to serve the public acquired by special
grants from private organizations.- FALSE
14. There are franchise holders whose gross receipts are subject to 12%
vat even if not vat registered.- TRUE
15. Radio and television broadcasting companies shall have an option to
be registered as vat taxpayers, provided, that once the option is
exercised, it shall not be revoked.- TRUE
16. Percentage tax overseas dispatch, message or conversation
originating from the Philippines shall be payable by the person paying for
the services rendered and shall be paid to the person rendering the
services.- TRUE
17. A domestic telephone company is required to collect and pay the
applicable overseas communication tax within 20 days after the end of
each quarter.-FALSE
18. For purposes of computing the gross receipts tax, the net trading loss
shall be deducted from other gross receipts regardless of source.-FALSE
19. In computing the net trading gain within the taxable year for gross
receipts tax, the figure ro be reported in the monthly percentage tax
return shall be the cumulative total of the net trading gain or loss since
the first months of the same taxable year.- TRUE
20. Non-life reinsurance premiums shall not be subject to vat.-FALSE
21. In computing the applicable rate for IPO purposes, shares of stock,
sold, bartered, exchanged should be divided by the total outstanding
shares of stock before listing in the local stock exchange.-FALSE
22. Under RR 6-2008, existing shareholders selling their shares to the
local stock exchange, 'during IPO" are likewise subject to percentage tax
on IPO.-TRUE
23. The applicable IPO rate shall be applied in computing teh tax due on
IPO of existing shareholders.-TRUE
Downloaded by Jayce unlock (jayceunlocks8@outlook.com)
lOMoARcPSD|25958568
24. A "follow-on follow-through offering" made by the issuing corporation
shall be subject to percentage tax of 6/10 of 1% of gross selling price and
documentary stamp taxes, beginning January 1, 2018.-FALSE
25. A "follow-on follow-through offering" made by an existing shareholder
shall be exempt from business tax.-FALSE
26. Like value added tax, percentage taxes are paid on a quarterly
(cumulative) basis.-TRUE
27. Generally every person liable to pay the percentage taxes shall file a
quarterly return within 25 days after the end of each taxable quarter.TRUE
28. Large taxpayers shall file a consolidated return and pay the tax
accordingly.- TRUE
29. Large taxpayers are classified based on the tax payments and as to
financial condition.-TRUE
30. Alll boxing exhibitions held in the Philippines shall be subject to
amusement tax.- FALSE
MULTIPLE CHOICE.
1. Percentage tax is
a business tax, a transfer tax, progressive tax
2. The percentage tax is
a. Tax on sale of services
b. Imposed on sale of goods
c. Imposed together with the excise tax.
d. All of the above3. Statement 1:Other percentage taxes are indirect taxes that can be
passed on by person required to pay to another person who shall bear
the burden of the tax.
Downloaded by Jayce unlock (jayceunlocks8@outlook.com)
lOMoARcPSD|25958568
Statement 2: Persons and transactions that are subject to the other
percentage taxes are no longer subject to the value added tax but may
be subject to excise tax.
Statements 1 and 2 are true
4. Which statement is wrong?
The percentage taxes are not allowed by law to be shifted to the
customers or clients.
5. Which of the following is subject to 3% percentage tax under Section
116 of the Tax Code as amended under TRAIN LAW?
I. Fruit dealer whose gross receipts for the year amounted to
P2,500,000 only.
II. An individual taxpayer whose gross sales for the year amounted to
P100,000.
III. School bus operator whose gross receipts for the year amounted
to P3,000,000.
None of the above
6. Binay non-vat registered, has the following date for the year 2018.
Sale of fresh fruits
Sale of fresh vegetables
500,000
500,000
Sale of dried fish.
500,000
Sale of refined sugar
500,000
Sale of cooking oil
500,000
Only 50% of the above sales were collected. How much is the vat or
percentage tax for the year 2018?- P30,000
OPT on sale of refined sugar and cooking oil = (P500,000 + 500,000) x
3% = P30,000
Downloaded by Jayce unlock (jayceunlocks8@outlook.com)
lOMoARcPSD|25958568
7. JJ a non-vat registered taxpayer, operates a convenience store from
which the gross receipts from sales, and payments on purchases from
VAT registered suppliers, were as follows (net of taxes):
Sale of processed food items
280,000
Sales of non-food items
220,000
Purchases of processed food items
100,000
Purchases of non-food items
80,000
Salaries of helpers
48,000
OPT on sale of processed food items & non-food items = (280K +
220K) x 3% = P15,000
In the second quarter of 2018, a non-vat registered taxpayer engaged in the
sale of services and whose annual gross receipts do not exceed the vat
threshold has the following data:
Accounts receivable, beginning of quarter
50,000
Sales during the quarter
Accounts receivable, end of quarter
100,000
75,000
Purchase of supplies, total invoice amount
11,200
8. The percentage tax due for the quarter is: P2,250
(Accounts receivable, beg + Sales during the quarter – AR end) x
3%
(50,000 + 100,000 – 75,000) x 3% = 2,250
9. Assume the taxpayer is vat registered, the VAT payable for the
quarter is:
Gross receipts
75,000
x Vat rate
12 %
Output vat
9,000
Downloaded by Jayce unlock (jayceunlocks8@outlook.com)
lOMoARcPSD|25958568
Input vat (11,200 x 3/28)
(1,200)
Vat Payable
7,800
10. Mahigos owns the following businesses.
Annual Gross Receipts
Annual
Gross Sales
Restaurant
1,000,000
1,350,000
Barbershop
600,000
625,000
Seller of marine
2,000,000
1,875,000
food products
Purchases of goods from VAT suppliers totaled P1,200,000 (related to VAT business if
applicable)
How much is the VAT payable or percentage tax for the year? P93,000
(1,350,000 + 625,000 – 1,200,000) x 12% = 93,000
11. This refers to persons, corporations, firms or associations engaged in the business of
carrying of transporting passengers or goods or both, by land, water, and air, for
compensation, offering their services to the public and shall include transportation
contractors.
Common carriers
12. A person whose business is to keep automobiles for hire or keep them stored for use r
order
Keepers of garage
13. A keeper of garage whose gross receipts for the year exceeds P3,000,000 is subject to
Common carrier’s tax
14. Which of the following is subject to the 3% common carrier’s tax?
Domestic carriers by land for the transport of passengers
15. One of the following statements is wrong. Operators of transport facilities by land are
Subject to the Vat on gross receipts from transporting passengers
16. Operators of transport facilities by land are:
Downloaded by Jayce unlock (jayceunlocks8@outlook.com)
lOMoARcPSD|25958568
Subject to VAT on gross receipts from transporting goods and cargoes. Subject to
percentage tax on gross receipts from transporting passengers. Subject to VAT on gross
receipts from renting out its transportation facilities
A domestic transportation contractor by land is engaged in the transport of passengers,
goods, and cargoes
17. If the transportation contractor is not vat registered, what business taxes is he liable
3% tax on VAT-exempt persons on gross receipts from transport of goods and cargoes and
3% common carrier’s tax on gross receipts from transport of passengers.
18. If the transportation contractor is vat-registered, what business taxes is he liable
12% VAT on gross receipts from transport of goods and cargoes and 3% common carrier’s
tax on gross receipt from transport of passengers.
19. Supercat is a common carrier by sea. During a particular quarter, its receipts consists of
the following (exclusive of taxes).
Transport of passengers
P2,000,000
Transport of goods
3,000,000
Transport of cargoes
1,500,000
The outut VAT and OPT due for the quarter are: 780,000 and 0
(2M + 3M + 1.5M) x 12% = 780,000
Isarog is a common carrier with passenger buses and cargo trucks. For the month of June
2018, it had the following data on gross revenues and receipts (exclusive of taxes):
For transporting passengers (receipts)
660,000
For transporting cargoes (revenues)
440,000
Actual receipts amounted only to P400,000
For renting out to the MMDA its towing trucks (receipts)
100,000
P20,000 represents revenue from the first quarter
And the balance of P80,000 represents receipts
From income earned in June.
20. The percentage tax is: 19,800
660,000 x 3% = 19800
21. The output vat is: P60,000
400,000 + 100,000 = 500,000 x 12% = 60,000
22. Masbate Liner CO. is a common carrier with passenger buses and cargo trucks. For the
month, it had the following data on receipts, taxes not included
From transport of passengers
800,000
From transport of cargoes
200,000
From bus rentals for school fieldtrips
400,000
(800,000 + 400,000) x 3% = 36,000
Downloaded by Jayce unlock (jayceunlocks8@outlook.com)
lOMoARcPSD|25958568
23. Milagros Liens, a vat registered person, has the following gross receipts in February:
Bus 1 (carriage of goods, P18,000)
100,000
Bus 2 (carriage of goods, 13,500)
165,000
Taxi
90,000
Jeepney
35,500
Cargo truck
45,000
Sea vessel
250,000
Additional information:
Salaries of drivers and conductor
125,000
Cost of oil and gasoline
175,000
During the month Bus 1 was bumped by another bus owned by Mandaon Lines and paid
Milagros Lines P120,000 for the damage.
The percentage tax due on Milagros Line in February is:
[(100K – 18K) + (165K – 13.5K) + 90k + 35.5K] x 3% = P10,770
24. The 3% common carrier’s tax on international carriers on their transport of cargoes
from Philippines to other countries is imposed upon:
International air carrier & International shipping doing business in the Philippines
25. An international air carrier doing business in the Philippines shall be subject to
3% common carrier’s tax on gross receipts from transport of cargoes in the Philippines only
Japan Air Lines (a resident international carrier) has the following data for the current year:
Gross receipts – PH
10,000,000
Gross receipts – Japan
15,000,000
Expenses- PH
4,000,000
Expenses – Japan
8,000,000
Additional information:
 60% of its gross receipts from Ph sources were derived from transport of passengers
while 50% of its gross receipts from Japan were derived from its cargo operations
 50% of its expenses (PH and Japan) are related to passenger operations
26. How much is the income tax due of Japan Air Lines
10,000,000 x 2.5% = 250,000
27. How much is the income tax due assuming Japan Air Lines is subject to a preferential
income tax rate of 1 ½ % under an existing international agreement or treaty.
10M x 1.5% = 150,000
28. How much is the income tax due assuming Japan Air Lines is exempt from income tax
under reciprocity rule?
Downloaded by Jayce unlock (jayceunlocks8@outlook.com)
lOMoARcPSD|25958568
Exempt
29. What is the applicable business tax of Japan Air Lines
3% common carrier’s tax on gross receipts derived from the transport of cargo from Ph to
another country
30. How much is the business tax due of Japan Air Lines?
(10M x 40% of his share on gross receipts) x 3% = 120,000
31. Which of the following statements is correct?
The Gross revenue for freight or cargo and mail shall be determined based on the
revenue realized from the carriage thereof
32. Statement 1: International air carriers and international shipping carriers shall not be
subject to 12% vat but to 3% common carrier’s tax based on gross receipts from Ph to
other countries
Statement 2: In cases when the Gross Philippines Billings Tax of 2.5% for international
carriers is not applicable (i.e., tax exempt based on reciprocity or treaty), the common
carrier’s tax under Section 118 of the NIRC, as amended, shall still apply
Statement 1 is FALSE, Statement 2 is TRUE
33. A right or privilege granted by the State to a person, individual or corporation, to
operate a public utility such as radio broadcasting, television station, electric light
system, telephone company, gas, and water utilities
Lending investors
34. Which of the following franchise grantees is subject to the franchise tax?
Franchise on gas and water utilities
35. One of the following is not subject to the 3% percentage tax
Franchise grantees of city gas and water utilities
36. Meralco is a holder of franchise to sell electricity. It also leases its first class auditorium
and theatre. In a particular month, its gross receipts from sale of electricity amounted
to P10M. The gross receipts from the lease of its auditorium and theatre amounted to
2M. How much is the franchise tax due for the month?
P0
As franchisee, the taxpayer had the following data on revenues and receivables (exclusive
of taxes):
Receivables
.
Quarter ended 3/31/2018
Revenues
Beginning
End
Covered by the franchise
4,000,000
600,000
800,000
Not covered by the franchise
1,000,000
160,000
37. Assume that the taxpayer is generating and selling electricity, what is the correct
business taxes for the quarter? P556,800
Downloaded by Jayce unlock (jayceunlocks8@outlook.com)
lOMoARcPSD|25958568
[(4M + 1M + 600K) – 960K] x 12% = 556,800
38. Assume that the taxpayer is generating and selling gas and water, what is the correct
business taxes for the quarter
Covered
Not covered
AR BEG
600,000
Revenues
4,000,000
1,000,000
AR END
(800,000)
(160,000)
Gross Receipts
3,800,000
840,000
Franchise tax rate
2%
12%
Business tax due
76,000
100,800
76K+108,800 = 176,800
39.Tomasino Broadcasting Company, a non-vat holder of a franchise to operate a radio and
television network reported the following gross receipts (net of any tax):
Year
Gross Receipts
2018
9,000,000
2019
12,000,000
The business tax liability is:
2018: 9M x 3% = 270K 2019: 12M x 3%= 360K
40. A telephone company, VAT-registered, provides services for domestic and overseas calls.
What business taxes are due from the services offered?
Value added tax for domestic calls & Overseas communications tax for overseas calls
41. Which of the following statements is false?
BBC, an international news agency is required to pay 10% percentage tax from messages
originating from the Ph by telephone or telegraph
42. Which of the following items is not percentage tax-exempt?
Business with annual gross sales of P100,000 and below
43. Which of the following overseas call Is not subject to percentage tax?
Overseas calls transmitted by the City Government of Surigao
44. One of the following statements is incorrect.
The overseas communications tax is imposed on the owner of the communications
facilities used to make overseas communications.
45. LBC Express Padala-España branch also offer local and overseas communication services
to its customers in addition to other services offered. It has the following data for particular
month.
Gross receipts, domestic calls
Gross receipts, overseas calls (originating in the Philippines)
Downloaded by Jayce unlock (jayceunlocks8@outlook.com)
P5,000,000
3,000,000
lOMoARcPSD|25958568
Purchase of supplies used in connection with domestic calls net of VAT
Purchase of equip, usee in connection with
domestic calls and overseas calls, net of VAT
Business expense
300,000
800,000
1,000,000
How much was the overseas communications tax collected from persons who used the
communications facilities? -P300,000
P300,000
P3M
x
10% =
46. Red Mobile Communications has the following data for a particular month:
Gross receipts, domestic calls
Gross receipts, overseas calls (originating in the Philippines)
Purchase of supplies used in connection with domestic calls net of VAT
Purchase of equip, usee in connection with
domestic calls and overseas calls, net of VAT
Business expense
P5,000,000
3,000,000
300,000
800,000
1,000,000
How much is the VAT payable, if any?-P504,000
Output vat
(P5Mx12%)
Input
Vat
P300,000 x 12%
P800,000 x12% x5/8
Vat
Payable.
P600,000
(36,000)
(60,000)
P504,000
47. Statement 1: The tax on insurance premiums applies to every person, company or
corporation doing life insurance business of any sort in the Philippines except purely
cooperative companies and associations.
Statement 2: A person engaged in non-life insurance business is subject to value-added tax.
STATEMENTS 1 AND 2 ARE TRUE
48. Statement 1: The tax on life insurance premiums is 2% based upon the total premiums
collected whether such premiums are paid in money, notes, credits or any substitute for
money.
Statement 2: The tax on agents of foreign insurance companies is 10% based upon the total
premiums collected.
STATEMENT 1 IS TRUE BUT STATEMENT 2 IS FALSE
Downloaded by Jayce unlock (jayceunlocks8@outlook.com)
lOMoARcPSD|25958568
49. Which of the following is subject to 12% percentage tax?
Life insurance policy premiums collected by a resident foreign insurance company.
50. Banks and non-bank financial intermediaries performing quasi-banking functions are
subject to:
GROSS RECEIPTS TAX
51. The taxpayer is a vat registered lessor of residential units. Monthly rent per unit is
P16,000 while his gross rental income for the year amounted to P2,500,000. Determine the
applicable business tax on his rental income.
SUBJECT TO 3% OPT UNDER SECTION 116
52. Banko Natin sold a repossessed car to JJ at P1,000,000, P300,000 higher than the cost of
P700,000. The sale is.
Subject to gross receipts tax of 7%; Subject to regular corporate income tax
53. Rentals of property, real or personal, received by bank and non-bank financial
intermediaries performing quasi-banking functions are:
SUBJECT TO GROSS RECEIPTS TAX OF 7%
54. Banco de Makati, Inc. has the following data for the first month of the current year:
How much is the total gross receipts tax?
OPT%
Interest income from lending activities from
instruments with remaining terms of:
Five years and less
More than five years
Dividends & equity shares from subsidiaries
Rental income
Net trading gains
Total Gross Receipts Tax
(5,000,000 x 5%) =
(3,000,000 x 1%) =
(1,000,000 x 0%) =
(500,000 x 7%) =
(300,000 x 7%) =
Downloaded by Jayce unlock (jayceunlocks8@outlook.com)
GRT
P250,000
30,000
0
35,000
21,000
P336,000
lOMoARcPSD|25958568
55. Metro Bank is a domestic bank operating in Santiago City. The following are its data in a
month:
The percentage of gross receipts tax (GRT) for the month is:
OPT%
GRT
Rentals from safety deposit boxes
(P880,000 x 7%)
P61,600
Net foreign exchange gains
( 220,000 x 7%)
15,400
Net trading gains from trading of securities
(660,000 x 7%).
46,200
Trust fees
(110,000 x7%)
7,700
Dividends from domestic corporations
(30,000 x 0%)
0
Other service fees
(220,000x 7%)
15,400
Interest income from lending activities from
instruments with remaining terms of:
Five years and less
(700,000 x 5%)
35,000
More than five years
(800,000x 1%)
8,000
Total Gross ReceiptsTax
P189,300
56. Banco de Oro has the following income (loss) for the month of October 2018.
For the month of October 2018, how much is the gross receipts tax?
Interest income with maturity of less than 5 years
(P500,000 x 5%) P25,000
Rentals
(P500,000 x 7%) 35,000
Net trading loss = none; if net trading gain, tax is 7%
____
Gross receipt tax (GRT)
P60,000
57. Based on the preceding number, assuming BDO has the following income on November
2018. How much is the gross receipts tax for November?
Interest income with maturity of less than 5 years (P1M x 5%) P50,000
Rentals (P500,000 x 7%)
35,000
Net trading gain
[200,000 – (100,000 net trading loss previous month) x 7%]
7,000
Gross receipt tax (GRT)
P92,000
58. Tita Gore executed on November 10, 2013 a long term loan fr Security Bank UST branch
in the amount of P5,000,000 payable within 10 years with the first installment due on or
before November 10,2014 and the succeeding yearly installment on the same date of the
Downloaded by Jayce unlock (jayceunlocks8@outlook.com)
lOMoARcPSD|25958568
subsequent years. Assume that on November 10, 2018, the loan was predetermined and
that the interest paid and other fees revenue from 2014 up to year 2018, amounting to
100,000 annually were declared by the bank correctly and the applicable gross receipts
taxes paid. How much is the additional gross receipts tax still payable as recomputed on
November 10, 2018. If any, because of the loan reclassification due to pretermination?
Interest withheld and paid (P100,000 x 5 years x 1%)
Adjusted amount of tax due to pretermination (P100,000 x 5 years x 5%)
Tax Payable
(P5,000)
25,000
P20,000
59. Tax base of percentage tax on agent of a foreign insurance not allowed to do business in
the Philippines.
Premiums received from within the Philippines for the foreign insurance company.
60. Pro-Life Insurance is engaged in business. It also serves as an agent of a non-resident
marine foreign insurance company. It has the following data for the current month. How
much is the tax for total premiums collected as an agent of a foreign insurance company?
Total premium collected as an agent of a non-resident
foreign marine insurance company
Total premium collected from non-life insurance business in the Philippines
Purchase of supplies for non-life business. 300,000
P2M x 10% = P200,000
61. Using the same data, how much is the vat payable?
[(P500,000 x 12%) - (300,000x12%)] = P24,000
62. A domestic insurance company has the following data for 2018:
How much is the tax on life insurance premiums?
Premiums collected on life insurance policies 2,000,000
P2M x 2% = P40,000
63. A tax on the right or privilege to enter places of amusement.
Downloaded by Jayce unlock (jayceunlocks8@outlook.com)
2,000,000
500,000
lOMoARcPSD|25958568
FRANCHISE TAX
64. The operator of ome of the following places is subject to amusement tax.
COCKPITS
65. One of the following is a correct amusement tax rate:
30% on jai-alai and racetracks -30%
66. One of the following is an incorrect amusement tax rate:
Boxing exhibitions -12%
Downloaded by Jayce unlock (jayceunlocks8@outlook.com)