TAXATWO TEST BANK-VALUE ADDED TAX (VAT) A.MULTIPLE CHOICE: 1. A TAX ON BUSINESS IS A A. B. C. D.
DIRECT TAX INDIRECT TAX PROPERTY TAX NONE OF THE ABOVE
2. ONE OF THE FOLLOWING IS NOT A MAJOR BUSINESS INTERNAL REVENUE TAXES IN THE TAX CODE A) B) C) D)
VALUE-ADDED TAX EXCISE TAX INCOME TAX PERCENTAGE TAX
3. VALUE-ADDED TAX IS A(AN) A) B) C) D)
INDIRECT TAX DIRECT TAX PROGRESSIVE TAX REGRESSIVE TAX
4. IN VAT TAXATION, THIS IS NOT A REQUIREMENT FOR TAXABILITY OF SERVICE A) B) C) D)
IN THE COURSE OF BUSINESS PERFORMED WITHIN OR OUTSIDE THE PHILIPPINES CONSIDERATION RECEIVED ACTUALLY OR CONTRUCTIVELY 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) B) C) D)
BROKER’S TAX CATERER’S TAX COMMON CARRIER’S TAX VAT
6. MR. F IS A LESSOR OF REAL PROPERTY AND PERSONAL PROPERTY(CARS). THE TAX THAT HE PAYS IS A) B) C) D)
EXCISE TAX VAT PERCENTAGE TAX 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) B) C) D)
VAT, EXCISE TAX, OTHER PERCENTAGE TAX VAT AND EXCISE TAX OTHER PERCENTAGE TAX AND EXCISE TAX 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) B) C) D)
TRUE, FALSE FALSE, TRUE FALSE, FALSE TRUE, TRUE
9. THE FOLLOWING ARE DATA OF SPOUSES FIDEL AND AILEEN DURING THE YEAR: GROSS RECEIPTS FROM BUSINESS: RESTAURANT SMALL DEPT. STORE PRACTICE OF PROFESSION AS A CPA
FIDEL
AILEEN
1,350,000 1,220,000 254,300
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) B) C) D)
CASH SALES SALES ON ACCOUNT SALES AND LEASEBACK EXPORT SALES
B. PROBLEM SOLVING 1. ABC COMPANY, A VAT –REGISTERED BUSINESS, HAD THE FOLLOWING DATA DURING THE QUARTER: EXPORT SALES DOMESTIC SALES(TAX INCLUDED) PURCHASES OF GOODS FOR EXPORT PURCHASES OF GOODS FOR DOMESTIC SALES PURCHASES OF SUPPLIES ON DOMESTIC SALES, EXCLUSIVE OF TAX
P1,815,000 1,232,000 672,000 323,120 124,850
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) B) C) D)
12,895 10,398 177,895 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) B) C) D)
72,000 12,895 84,895 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 OUTPUT TAX(143,000 X 12%)
143,000 17,160
B) CASH SALES
143,000 143,000
C) CASH SALES
160,160
D) CASH SALES OUTPUT TAX
143,000
160,160 125,840 17,160
5. THE JOURNAL ENTRY IN THE PURCHASE BOOKS OF BELTRAN IN NO., 4 ABOVE IS A) PURCHASES INPUT TAX ACCOUNTS PAYABLE
110,000 13,200 123,200
B) PURCHASES ACCOUNTS PAYABLE
96,800
C) PURCHASES INPUT TAX ACCOUNTS PAYABLE
83,600 13,200
D) PURCHASED ACCOUNTS PAYABLE
110,000 110,000
96,800
96,800
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 B) BELTRAN SHOULD RECORD DEBIT CASH OF P143,000 IN HIS BOOKS
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 VATREGISTERED, HIS EXPORT SALES ARE EXEMPT, BUT HE IS NOT ENTITLED TO TAX CREDIT FOR INPUTS A) B) C) D)
TRUE, TRUE FALSE, TRUE FALSE, FALSE 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) B) C) D)
#1 #2 #3 #4
9. WHICH IS ZERO-RATED? A) B) C) D)
#1 #2 #3 #4
10. BASED ON NO.9 ABOVE, THE VAT ARE ABSORBED BY A) B) C) D)
FOOD PROCESSOR WHOLESALER/EXPORTER RETAILER HOUSEHOLDS/ULTIMATE CONSUMER
NUMBERS 11 AND 12 ARE BASED ON THE FOLLOWING INFORMATION 11. THE PASTRY SHOP SELLS CAKES AND PASTRY ITEMS TO WELLKNOWN 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) B) C) D)
P20,000 P24,000 P26,880 P15,000
12. THE ACCOUNT TITLE TO BEST REFLECT THE VAT IN #11 ABOVE A) B) C) D)
SALES TAX PAYABLE VAT PAYABLE INPUT TAX 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 SALES RETURNS
P709,500 26,400
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 GOODS TAKEN AS PAYMENT FOR CREDITOR FREIGHT AND INSURANCE OF GOODS PURCHASES: RAW MATERIALS SUPPLIES CAPITAL GOODS SALARIES OF EMPLOYEES
38,500 26,950 4,675 484,000 61,600 60,500 235,000
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) B) C) D)
P124,450 P121,050 P161,106 P134,255
14. THE INPUT TAX IS A) B) C) D)
61,078 73,923 65,440 NONE OF THE ABOVE
15. THE AMOUNT OF VAT PAYABLE IS A) B) C) D)
87,813 69,350 66,525 78,404.46
16. A CREDITABLE INPUT TAX ON ONE WHO BECOMES SUBJECT TO VAT FOR THE FIRST TIME A) B) C) D)
PRESUMPTIVE INPUT TAX TRANSITIONAL INPUT TAX EXCESS INPUT TAX 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 ACTUAL AMOUNT PAID ON THE INVTY SALES, TOTAL INVOICE AMOUNT PURCHASES
204,000 16,000 469,000 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) B) C) D)
30,100 28,100 3,960 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 PURCHASES OF SUPPLIES(FEBRUARY) GROSS OF VAT INVENTORY OF SUPPLIES: SUBJECT TO VAT JAN. 1, 2008 NOT SUBJECT TO VAT VAT PAID ON THE INVTY OF SUPPLIES, JAN. 1, 2008
336,000 112,000 50,400 60,000 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) B) C) D)
TRUE, FALSE FALSE, TRUE FALSE, FALSE TRUE, TRUE
19. BETH HAD THE FOLLOWING RECEIPTS DURING THE MONTH (EXCLUSIVE OF TAX): JEEPNEY 1 JEEPNEY 2 BUS SEA VESSEL CESSNA PLANE FOR HIRE
PASSENGER 20,000 30,000 15,000 1,500,000 800,000
CARGO 8,500 800,000 560,000
THE OUTPUT TAX DURING THE PERIOD IS A) B) C) D)
164,220 441,000 283,800 440,220
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 13TH MONTH PAY AGENCY FEE AT 15% SSS AND PHILHEALTH LEAVE WITH PAY TOTAL
6,000 6,000 1,800 300 450 14,550
BASED ON THE ABOVE DATA, HOW MUCH IS THE OUTPUT TAX PAYABLE OF INSIDE JOB SECURITY? A) B) C) D)
1,746 1,558.93 1,440 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 DUE: DEC. 5 JAN TO DEC. 2009
25,000
50,000
40,000
25,000 200,000
20,000 130,000
20,000 240,000
ALL AMOUNTS INDICATED ABOVE DO NOT INCLUDE THE TAX. THE VAT IN NOVEMBER IS A) B) C) D)
26,500 31,800 34,800 90,000
22. BASED ON NO. 21 ABOVE, THE VAT FOR THE MONTH OF DECEMBER IS A) B) C) D)
5,400 4,500 10,000 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) B) C) D)
150,000 850,000 ZERO 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) B) C) D)
FOREIGN CURRENCY DENOMINATED SALES EXPORT SALE TRANSACTION DEEMED SALE 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) B) C) D)
FALSE, FALSE FALSE, TRUE TRUE, FALSE 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) B) C) D)
TRUE, TRUE FALSE, FALSE FALSE, TRUE 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) B) C) D)
31,260 37,285 47,981.76 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) B) C) D)
28,279.44 32,298 17,540 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 COLLECTIONS DURING THE MONTH
70% 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 FROM NON-VAT REGISTERED PERSONS
226,240 126,500
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) B) C) D)
46,860 52,260 45,840 46,050
32. THE VAT PAYABLE BY RGF COMPANY DURING THE QUARTER IS A) B) C) D)
21,420 19,200 6,450 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) B) C) D)
82,560 145,920 135,360 157,920
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 PAYMENT TO SAPOTIZE COMPANY PURCHASE OF MAT’LS BY PATOGROK COMPANY
600,000 504,000 442,400
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) B) C) D)
10,000 5,000 NONE, BECAUSE 0% APPLIES 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 PURCHASES, NET OF INPUT TAXES SALES RETURN PURCHASES RETURN, NET OF INPUT TAX DEFERRED INPUT TAXES, (CARRIED OVER FROM THE THIRD QUARTER)
5,800,000 2,820,000 200,000 300,000 9,500
THE VAT PAYABLE FOR THE MONTH OF OCTOBER BY OFFSPRING CORPORATION IS A) B) C) D)
320,500 285,500 80,000 288,100
36. THE FOLLOWING ARE THE DATA OF CITY APPLIANCES MARKETING COMPANY FOR OCTOBER 2008: SALES UP TO OCTOBER 15, TOTAL INVOICE VALUE PURCHASES UP TO OCTOBER 15, NET OF INPUT TAXES
266,000 215,000
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 QUARTER OF P3,500.
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) B) C) D)
22,500 22,000 6,350 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 FROM WASHING AND GREASING REIMBURSEMENT BY CUSTOMER ON PAYMENTS MADE TO VAT MACHINE SHOPS PAYMENTS RECEIVED FOR LUBRICANTS, OILS AND FLUID PROVIDED BY THE SHOP TO CARS UNDERGOING REPAIR DISBURSEMENTS: ELECTRIC BILL WATER BILL SALARIES OF EMPLOYEES PAYMENTS MADE TO MACHINE SHOPS, NON-VAT PURCHASE OF LUBRICANTS, OILS AND FLUIDS PURCHASE OF CAPITAL GOODS(LIFE=10YRS)
85,620 45,425 4,350 5,780 3,550 2,380 15,000 4,350 3,000 24,000
37. THE OUTPUT TAX AMOUNT TO A) B) C) D)
16,419 16,941 14,660 15,126
38. IN RELATION TO NO. 37 ABOVE, THE VAT PAYABLE IS A) B) C) D)
9,404 12,753 9,459 6,979
39. TAXPAYERS WHO BECAME VAT REGISTERED PERSONS UPON EXCEEDING THE MINIMUM TURN-OVER OF P1.5 MILLION IN ANY 12MONTH 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 PURCHASES OF: SUPPLIES FROM VAT REGISTERED SUPPLIERS PACKAGING MATERIALS, VAT INCLUSIVE SUGAR CANE FROM PLANTERS WATER BILL SALARIES OF OFFICIALS AND EMPLOYEES INVENTORY PER BALANCE SHEET, DECEMBER 1 ,2008 PACKAGING MATERIALS SUPPLIES PURCHASED FROM VAT REGISTERED PERSONS SUPPLIES PURCHASEDFROM NON-VAT REGISTERED SUPPLIERS 40. THE PRESUMPTIVE INPUT TAX IS A) B) C) D)
35,000 5,250 13,860 14,000
924,000 38,500 27,060 350,000 12,000 150,000 17,875 14,850 4,750
41. THE TRANSITIONAL INPUT TAX IS A) B) C) D)
3,506.25 2,975 654.50 2,998
42. THE TOTAL CREDITABLE INPUT TAX IS A) B) C) D)
24,530.54 13,828 92,935 22,935
43. THE VAT PAYABLE IS A) B) C) D)
61,065 70,172 74,469.46 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) B) C) D)
12,500 17,640 13,364 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) B) C) D)
15,000 40,000 48,000 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 RENT INCOME IN JANUARY FROM VARIOUS CUSTOMERS PREPAID RENTALS RECEIVED FROM CUSTOMER C (FEBRUARY TO JUNE) LOAN TO ARCHIE LADO FROM CUSTOMER B
110,000 88,000 132,000 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) B) C) D)
24,750 21,000 28,500 39,500
47. IN QUESTION NO. 46 ABOVE, THE INPUT TAX ON ARCHIE IS A) B) C) D)
5,040 ZERO 21,000 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) B) C) D)
IN BOTH CASES ONLY IN THE 1ST CASE NEITHER IN THE 1ST NOR IN THE 2ND CASE ONLY 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 RAW CANE SUGAR, TOTAL VALUE
325,000 255,000
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) B) C) D)
35,675 42,054.54 41,675.31 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 SALE OF BOOKS SALE OF GIFT ITEMS PURCHASES OF SCHOOL SUPPLIES/GIFT ITEMS PURCHASES OF BOOKS PURCHASE OF COMPUTER USED I N TAXABLE AND EXEMPT TRANSACTIONS
560,000 200,000 335,000 406,000 176,000 21,112
50. THE CREDITABLE INPUT TAX ON THE PURCHASE OF COMPUTER IS A) B) C) D)
2,400.20 1,920.50 26,400.65 1,809.60
51. IN RELATION TO NO. 50 ABOVE, THE VAT PAYABLE IS A) B) C) D)
50,690.40 34,100.50 36,500 43,280.25
52. TALA COMPANY HAD THE FOLLOWING DATA FOR THE 1ST QUARTER OF 2008(VAT EXCLUSIVE): TAXABLE SALES EXEMPTED SALES ZERO-RATED SALES INPUT TAX WHICH CANNOT BE DIRECTLY ATTRIBUTED TO ANY OF THE ABOVE SALES
600,000 300,000 100,000 50,000
THE VAT PAYABLE FOR THE QUARTER IS A) B) C) D)
42,000 37,000 32,000 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) SALES (NON-VAT BUSINESS) PURCHASES(VAT BUSINESS) PURCHASES(NON-VAT BUSINESS) PURCHASES (VAT AND NON-VAT BUSINESSES)
600,000 200,000 401,500 80,000 64,000
THE VAT PAYABLE BY COMBINED COMPANY IS A) B) C) D)
7,660 6,060 13,500 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 RENT OF WAREHOUSE, VAT AND NON-VAT BUSINESS, VAT EXCLUDED FREIGHT OF GOODS, VAT AND NON-VAT BUSINESS, VAT INCLUDED TELEPHONE BILLS, VAT AND NON-VAT, VAT INCLUDED
14,560 6,200 2,576 1,624
THE INPUT TAX ON BUSINESS A IS: A) B) C) D)
27,781 23,747 23,267 18,875
55. IN QUESTION NO. 54 ABOVE, THE VAT PAYABLE BY EXCEL COMPANY IS A) B) C) D)
19,035 20,733 20,253 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 DECEMBER 959,616 789,600
56. THE AMOUNT OF VAT PAYABLE BY MILDRED FOR THE MONTH OF OCTOBER IS A) B) C) D)
25,200 16,500 2,000 ZERO
57. THE VAT PAYABLE FOR THE MONTH OF NOVEMBER IS A) B) C) D)
203,500 28,200 3,000 ZERO
58. THE VAT PAYABLE/EXCESS FOR THE LAST QUARTER IS A) B) C) D)
(18,216) 18,216 60,900 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 SALES: JULY AUGUST SEPTEMBER PURCHASES: JULY AUGUST SEPTEMBER 59. THE VAT PAYABLE FOR JULY IS A) B) C) D)
13,440 7,240 11,200 5,000
6,200 620,000 430,000 540,000 508,000 432,000 314,500
60. THE VAT PAYABLE FOR AUGUST IS A) B) C) D)
(6,440) (240) ZERO 7,000
61. THE VAT PAYABLE FOR SEPTEMBER IS A) B) C) D)
26,580 27,060 20,860 34,090
62. FELICISIMA HAD THE FOLLOWING DATA: CASE 1 SALES, NET OF VAT 1,900,000 PURCHASES OF GOODS FOR SALE, EXCLUSIVE OF VAT 1,260,000 PURCHASES OF MACHINES(VAT NOT INCLUDED) 1,440,000 MACHINE LIFE 6 YEARS
CASE 2 1,800,000 1,600,000 900,000 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) PURCHASES OF GOODS(NET OF VAT) PURCHASES OF CAPITAL GOODS(INVOICE AMOUNT): MACHINE 1 (USEFUL LIFE)=6 YEARS MACHINE 2 (USEFUL LIFE)=3 YEARS THE VAT PAYABLE IN JULY IS A) B) C) D)
120,860 19,200 33,600 (40,800)
2,540,000 1,450,000 974,400 67,200
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 PURCHASES PURCHASE OF MACHINERY(FEBRUARY) UNUTILIZED INPUT TAX AS END OF 1ST QTR
700,000 500,000 1,500,000 40,000
2ND QUARTER SALES PURCHASES
1,500,000 200,000
64. FOR THE FIRST QUARTER, CHRISTINE COMPANY WILL RESULT TO A/AN A) B) C) D)
VAT PAYABLE OF 72,000 EXCESS TAX OF 22,000 EXCESS TAX OF 196,000 VAT PAYABLE OF 22,000
65. THE VAT PAYABLE FOR THE SECOND QUARTER IS A) B) C) D)
156,000 134,000 125,000 ZERO
66. DATA DURING THE SECOND QUARTER: OUTPUT TAX 35,000 INPUT TAX 19,000 VAT PAID: APRIL 3,000 MAY 4,500 ST EXCESS INPUT TAX, 1 QUARTER 2,400 THE VAT PAYABLE (OR EXCESS TAX TO BE CARRIED OVER) IS A) B) C) D)
6,100 16,000 8,500 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 VAT VAT NON-VAT NON-VAT
A) B) C) D)
QUESTION #2 JUNE 20 JUNE 25 JUNE 20 JUNE 20
QUESTION #3 JULY 25 JULY 25 JULY 25 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) PURCHASE OF SERVICES FROM DAMAN SERVICES, INC.
11,200 56,000
68. THE AMOUNT PAYABLE TO SINADIRI STORE AND MERCHADISE AFTER WITHHOLDING TAXES OF VAT AND INCOME TAX IS A) B) C) D)
11,200 10,600 9,400 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 VATREGISTERED 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
