Business Tax and VAT CE Flashcards
Which of the following shall be considered as agricultural products in their original state and shall be exempt from VAT?
I. polished and/or husked rice
II. corn grits
III. raw cane sugar and molasses
IV. ordinary salt V. copra
VI. bagasse
a. I and II only
b. III and IV only
c. I, II, III, IV, V and VI
d. I, II, III, IV, V only
I, II, III, IV, V only
I. polished and/or husked rice
II. corn grits
III. raw cane sugar and molasses
IV. ordinary salt V. copra
Which of the following is a transfer deemed sale transaction?
a. Property held in trust
b. Property for sale but transferred as a completed gift
c. Donated property
d. Property transferred as inheritance
Property for sale but transferred as a completed gift
Which of the following transport services is not subject to VAT?
a. Transport of goods and cargoes
b. Transport of passengers by land
c. Additional payment of excess baggage in air transport
d. Transport of passengers by air and sea
Transport of passengers by land
Which of the following would not comprise the gross selling price subject to VAT?
a. Freight charges
b. Purchase price
c. Excise tax
d. Sales returns and allowances
Sales returns and allowances
The application of TCC or VAT refund should be made within
a. 90 days after the close of the taxable quarter when the sales were made
b. 120 days after the close of the taxable month after sales
c. 2 years after the close of the taxable quarter
d. 2 years after the close of the taxable quarter when the sales were made
2 years after the close of the taxable quarter when the sales were made
The input VAT paid by a non-VAT taxpayer shall be treated, except for, as
a. Additional cost of purchases
b. Creditable input VAT
c. Operating expense
d. Non-deductible input VAT
Creditable input VAT
Which is correct?
a. None of these.
b. Both of these.
c. A VAT-exempt taxpayer may be subject to other percentage taxes.
d. A taxpayer who is subject to percentage tax will also be subject to income tax.
Both of these are correct:
c. A VAT-exempt taxpayer may be subject to other percentage taxes.
d. A taxpayer who is subject to percentage tax will also be subject to income tax.
Which of the following is not included in the taxable base of input VAT of imported products?
a. Landed cost plus excise tax
b. Value used by BOC in determining tariff and custom duties, plus custom
duties and excise taxes
c. Incidental charges after the release of goods from the BOC
d. Other charges prior to the release of goods from the BOC
Incidental charges after the release of goods from the BOC
Meat, fruit, fish, vegetables and other agricultural and marine food products shall be considered in their original state even if they have undergone advanced technological means of packaging. Which of the following shall not be considered as advanced technological means of packing?
a. Tetra pack
b. Vacuum packing
c. Freezing
d. Shrink wrapping in plastics
Freezing
A taxpayer has excess credit as a result of input taxes paid on purchase of capital goods. He may:
a. make his application for refund in the subsequent period following the period during which the purchases were made
b. use it in payment of any internal revenue tax of a VAT-registered person
c. carry-over and apply his excess tax credit against output taxes in the subsequent period or periods
d. have his excess tax credit refunded to a VAT-registered person
carry-over and apply his excess tax credit against output taxes in the subsequent period or periods
Which of the following are not considered livestock or poultry for VAT-exempt transactions purposes?
I. fighting cocks
II. race horses III. zoo animals IV. other animals generally considered as pets
a. I, II, III and IV
b. II, III and IV only
c. I and II only
d. I, II, and III only
I, II, III and IV
I. fighting cocks
II. race horses III. zoo animals IV. other animals generally considered as pets
Which of the following shall be considered livestock for VAT-exempt transactions purposes?
I. cows
II. bulls and calves
III. pigs
IV. sheep
V. goats
VI. rabbits
a. I, II and III only
b. all of the above except VI
c. none of the above
d. all of the above
All of the above:
I. cows
II. bulls and calves
III. pigs
IV. sheep
V. goats
VI. rabbits
What is the VAT treatment of sale of gold to the Bangko Sentral ng Pilipinas, pre and post-TRAIN law, respectively:
a. Exempt, taxable
b. Zero-rated, taxable
c. Exempt, Zero-rated
d. Zero-rated, Exempt
Zero-rated, Exempt
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:
a. may be debited at the time of purchase to the purchases account
b. must be allocated immediately and at the time of purchases between the VAT and non-VAT business
c. may be debited at the time of purchase to the input taxes account
d. must be allocated between the VAT and non-VAT business at the end of the taxable period
must be allocated immediately and at the time of purchases between the VAT and non-VAT business
Which of the following transactions is not subject to VAT?
a. Dissolution of partnership
b. Sale of scrap materials
c. Merger and consolidation
d. Sale of obsolete inventories
Merger and consolidation
One of the following is not subject to VAT on importation:
a. goods brought into the Philippines not in the course of trade or business by a person who is not vat registered
b. tax free goods imported by tax-exempt importer who transferred them to a person who does not enjoy exemption from vat on importation
c. goods brought into the Philippines in the course of trade or business by a VAT-registered person
d. goods exempt from customs duties classified as personal and household effects belonging to residents of the Philippines returning from abroad
goods exempt from customs duties classified as personal and household effects belonging to residents of the Philippines returning from abroad
Which of the following situation will not result to transactions deemed sales?
a. Change of business ownership
b. Use of office supplies in the business
c. Retirement from business
d. Use of inventory as payment to creditors
Use of office supplies in the business
The importation of cigarettes for sale in the Philippines is subject to:
a. Excise tax, but not VAT.
b. VAT, but not excise tax.
c. Both VAT and excise tax.
d. Neither VAT nor excise tax.
Both VAT and excise tax.
Which of the following is not allowed for a tax refund or issuance of tax credit certificate?
a. Unused input VAT on purchases
b. Effectively zero-rated VAT
c. Cancellation of VAT registration
d. Zero-rated sales
Unused input VAT on purchases
Who of the following is not subject to VAT?
a. A nonresident lessor or foreign licensor who is not VAT registered.
b. VAT registered person whose gross sales do not exceed P3,000,000
c. None of these.
d. Any person who is required to register under the VAT system but failed to register.
All of the following individuals is subject to VAT:
a. A nonresident lessor or foreign licensor who is not VAT registered.
b. VAT registered person whose gross sales do not exceed P3,000,000
d. Any person who is required to register under the VAT system but failed to register.
The importation of farm machineries and equipment is exempt when imported by:
a. an agricultural cooperative
b. A or C
c. a trader engaged in business
d. a member of a cooperative
an agricultural cooperative
Which of the following is subject to VAT?
a. sale of fruits
b. sale of vegetables
c. sale of olive oil
d. sale of copra
sale of olive oil
Atty. Bong and Atty. Mang formed a general professional partnership for the exercise of their legal profession. Their partnership Bong-Mang Law Office started operation on August 1, 2020 as a VAT taxpayer. The partnership adopted the calendar year basis. What is the deadline for the first quarterly VAT return?
a. November 25, 2020
b. August 25, 2020
c. July 30, 2020
d. October 25, 2020
October 25, 2020
For installment reporting of VAT, the initial payment should be 25% of the
a. Gross selling price
b. Contract price
c. Realized income
d. Installments received
Gross selling price
Which of the following is not considered a business activity?
a. Rendering services for a fee
b. Selling of goods
c. Production of goods for a consideration
d. Employment
Employment
1st statement: Medical, dental, hospital and veterinary services, including laboratory services, except those rendered by professionals are exempt from VAT.
2nd statement: If the hospital or clinic operates a pharmacy or drug store, the sale of drugs and medicine is subject to VAT.
a. None is correct
b. Only the 1st statement is correct
c. Both are correct
d. Only 2nd statement is correct
Both are correct:
1st statement: Medical, dental, hospital and veterinary services, including laboratory services, except those rendered by professionals are exempt from VAT.
2nd statement: If the hospital or clinic operates a pharmacy or drug store, the sale of drugs and medicine is subject to VAT.
In general, the tax rate of non-VAT business is:
a. 3%
b. 5%
c. 10%
d. 12%
3%
Which of the following transactions is subject to value-added tax?
a. educational services duly approved by DepEd, CHED, TESDA or those operated by the government
b. services subject to other percentage tax
c. none of the above
d. sale of coal and natural gas
sale of coal and natural gas
Which of the following sale is not an export sale?
a. Sale of locally manufactured goods to foreign country
b. Actual sales to foreign country
c. Sale of goods from foreign country to the Philippines
d. Sale of goods to PEZA-registered export enterprise
Sale of goods from foreign country to the Philippines
Which of the following shall be subject to VAT?
a. sale of commercial property by a real estate dealer for P1,500,000
b. sale of residential house and lot by the owners for P5,000,000
c. sale of a private car by its owner
d. all of the above
All of the above:
a. sale of commercial property by a real estate dealer for P1,500,000
b. sale of residential house and lot by the owners for P5,000,000
c. sale of a private car by its owner
Which importation is exempt from VAT?
a. importation of books by a student
b. all of these
c. importation of books by a school
d. importation of books by a bookstore
All of these are exempt from VAT:
a. importation of books by a student
c. importation of books by a school
d. importation of books by a bookstore
Educational services are exempt from VAT if rendered by:
I. Private educational institutions duly accredited by DepEd, CHED, TESDA
II. Government educational institutions
a. Both I and II are correct
b. Only I is correct
c. Neither I nor II is correct
d. Only II is correct
Both I and II are correct
This document is issued upon collection of sales of goods or services.
a. Sales invoice
b. Delivery receipt
c. Purchase order
d. Official receipt
Official receipt
First statement: Services subject to (other) percentage taxes shall not be subject to VAT.
Second statement: Services by agricultural contract growers and milling for others of palay into rice, corn into grits and sugar cane into raw sugar are
exempt from VAT.
a. Only II is correct
b. Neither I nor II is correct
c. Only I is correct
d. Both I and II are correct
Both I and II are correct:
First statement: Services subject to (other) percentage taxes shall not be subject to VAT.
Second statement: Services by agricultural contract growers and milling for others of palay into rice, corn into grits and sugar cane into raw sugar are
exempt from VAT.
Which of the following statements is not correct?
a. The transactions of VAT business, which is subject to VAT, are allowed with creditable input VAT.
b. VAT is a business tax.
c. VAT element of the total payments for the purchases is forming part of the cost to sell to the buyer if claimed as credit against output VAT.
d. The business tax on transaction subject to percentage tax forms a part of the cost to sale to the buyer.
VAT element of the total payments for the purchases is forming part of the cost to sell to the buyer if claimed as credit against output VAT.
Which of the following is subject to zero-rated VAT?
a. Accredited educational services
b. Medical, dental, hospital and veterinary services
c. Transport of passengers by a domestic corporation outside the Philippines
d. Agricultural contract growers
Transport of passengers by a domestic corporation outside the Philippines
Which of the following is the privilege of a non-VAT business that is engaged in export sales with regard to its input VAT?
a. Tax refund
b. Creditable input VAT
c. Tax credit certificate
d. None of these
None of these:
a. Tax refund
b. Creditable input VAT
c. Tax credit certificate
Which of the following is not considered a deemed sale?
a. Installment sale of real property
b. Merchandise inventory left upon retirement
c. Distribution of inventory to creditors
d. Consignment of goods if not sold within 60 days
Installment sale of real property
Atty. Ping and Atty. Bert formed a general professional partnership for the exercise of their legal profession. Their partnership Ping-Bert Law Office started operation on August 1, 2020 as a VAT taxpayer. The partnership adopted the calendar year basis. The professional partnership shall file its first monthly VAT return on:
a. July 20, 2020
b. September 30, 2020
c. July 10, 2020
d. September 20, 2020
September 20, 2020
Which of the following statements is correct?
a. Neither statement is correct.
b. Both statements are correct.
c. export sale by a VAT-registered person is subject to 0%.
d. export sale by a non-VAT registered person is subject to 3% percentage tax.
export sale by a VAT-registered person is subject to 0%.
The input VAT paid by a VAT business is treated as:
a. Current liability
b. Operating expense
c. Current asset
d. Cost of purchases
Current asset
Which of the following is not a source of creditable input VAT?
a. Purchases and payments of services to other VAT-registered businesses
b. Transitional and presumptive input VAT
c. Importation of goods (for business use or for sale locally)
d. Goods received through donation
Goods received through donation
Which of the following assets sold is subject to both business tax and
income tax?
a. All of these.
b. Capital asset
c. Ordinary asset
d. Personal asset
Ordinary asset
Which of the following is not a characteristic of VAT?
a. Tax on buyers
b. Tax on gross sales
c. Tax on consumption
d. Tax on sellers
Tax on sellers
Which of the following business transactions is not subject to business tax?
a. Personal overseas communication
b. Jai-alai and horse race winnings
c. Sales of scrap materials and defective products by a business
d. Sale of residential house and lot classified as capital asset
Sale of residential house and lot classified as capital asset
Which of the following transactions are not allowed to deduct input VAT?
a. Sale of VAT-registered person
b. Zero-rated VAT
c. Sales to the government
d. Importation
Sales to the government
Which of the following goods when sold or imported shall not be exempt from VAT?
a. livestock and poultry of a kind generally used as, or yielding or producing foods for human consumption
b. agricultural and marine food products n their original state
c. processed or manufactured agricultural and marine food products
d. breeding stock and genetic materials therefor
processed or manufactured agricultural and marine food products
Taxpayer operates a Grocery Store and is not-VAT registered/. His annual gross sales amounted to P3,000,000 for the year although his operations resulted to net loss for the year 2018. He is subject to:
a. None, as operation incurs losses
b. 2% MCIT
c. 3% OPT
d. 12% VAT
3% OPT
Which statement is correct? Leasing of property shall be subject to VAT on sale of services:
a. if the property is in the Philippines and the lease agreement was executed outside the Philippines
b. if the property is in the Philippines and the lease agreement was executed within or outside the Philippines
c. all of the above
d. if the property is in the Philippines and the lease agreement was executed in the Philippines
All of the above:
a. if the property is in the Philippines and the lease agreement was executed outside the Philippines
b. if the property is in the Philippines and the lease agreement was executed within or outside the Philippines
d. if the property is in the Philippines and the lease agreement was executed in the Philippines
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 P3,000,000 may voluntarily apply for registration under the VAT system.
II. A VAT-registered person whose gross sales and/or receipts for three (3) consecutive years did not exceed P3,000,000 may apply for cancellation of VAT registration and revert back to being non-VAT under Section 109.
III. A non-VAT registered whose sales for the year exceeded P3,000,000 is subject to 12% VAT.
a. None of the choices.
b. I, II, and III
c. I only
d. I, II only
All of the following 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 P3,000,000 may voluntarily apply for registration under the VAT system.
II. A VAT-registered person whose gross sales and/or receipts for three (3) consecutive years did not exceed P3,000,000 may apply for cancellation of VAT registration and revert back to being non-VAT under Section 109.
III. A non-VAT registered whose sales for the year exceeded P3,000,000 is subject to 12% VAT.
Statement 1: Sales of services to PEZA or SBMA-registered enterprises are zero-rated even if performed outside the ecozones.
Statement 2: The services rendered by a VAT-registered contractor to an international organization granted with tax exemptions under special laws or treaty are subject to zero-rated or effectively zero-rated VAT.
a. Only statement 2 is correct.
b. Both statements are correct.
c. Only statement 1 is correct.
d. Both statements are not correct.
Only statement 2 is correct.
Statement 2: The services rendered by a VAT-registered contractor to an international organization granted with tax exemptions under special laws or treaty are subject to zero-rated or effectively zero-rated VAT.
One of the following is a zero-rated sale under the TRAIN Law
a. sale of cotton and cotton seeds
b. sale of nonfood agricultural products
c. export sale of a person who is vat registered
d. sale of gold to BSP
export sale of a person who is vat registered
Which of the following is subject to VAT?
a. Overseas calls origination from the Philippines
b. Lending investors
c. Offshore destination/charges of freight forwarder
d. Pawnshops
Lending investors
