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BLT 4A > [Topic 1] Value Added Tax > Flashcards

[Topic 1] Value Added Tax Flashcards

1
Q

Under RR 4-2007, agricultural and marine food products shall be considered in their original state even if they have undergone the simple processes of preparation or preservation for the market, such as freezing, drying, salting, broiling, roasting, smoking or stripping.

A

TRUE

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2
Q

Polished and/or husked rice, corn gifts, raw cane sugar and molasses, ordinary salt, and copra shall be not considered in their original state, hence, subject to vat.

A

FALSE.

They are in their original state.

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3
Q

Sale of flowers, in its original state is exempt from vat.

A

FALSE.

Flowers are not agricultural, they are ornamental.

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4
Q

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.

A

TRUE

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5
Q

Agricultural contract growers are subject to vat.

A

FALSE

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6
Q

The term “goods” for value added tax 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

A

TRUE

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7
Q

Export sale by a vat registered entity is exempt from vat.

A

FALSE

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8
Q

Export sale by a non-vat registered entity is subject to vat.

A

FALSE

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9
Q

The input taxes attribute to zero-rated sales may be refunded or credited against any other internal revenue taxes due from the taxpayer.

A

TRUE

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10
Q

The input taxes attributable to the purchase of capital goods may be refunded or credited against any other internal taxes due from the taxpayer.

A

FALSE

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11
Q

For vat purposes, condominiums, including its allotted parking space, are classified as other dwellings.

A

FALSE

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12
Q

Sales of drugs and medicines of pharmacy run by the hospital to outpatients are subject to VAT.

A

TRUE

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13
Q

Gross receipts of duly registered credit/multi-purpose cooperatives from lending activities to non-members are subject to value added tax.

A

FALSE

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14
Q

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.

A

FALSE

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15
Q

Government entities engaged in commercial or economic activity are generally exempt from value added tax.

A

FALSE

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16
Q

Transactions treated as sales due to the absence of actual exchange are subject to VAT

A

TRUE

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17
Q

The Output value-added tax is computed by multiplying the gross selling price by 12% or multiplying the total amount indicated in the invoice by 12/112 if vat inclusive

A

TRUE

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18
Q

An importation of goods by a non-profit charitable organization shall not be subject to value-added tax

A

FALSE

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19
Q

In case of importation, the importer is not the one liable for the VAT but the person who shall buy the imported goods

A

FALSE

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20
Q

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 sixty months

A

FALSE

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21
Q

VAT on importation is imposed regardless of whether such importation is for personal or business use

A

TRUE

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22
Q

Facilitation expense shall be included in the determination of applicable input vat on importation

A

FALSE

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23
Q

Gross receipts from lease of commercial units are subject to 12% VAT regardless of the place where the property is located

A

FALSE

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24
Q

Withholding of VAT is done when the buyer is the government or any of its political subdivisions

A

TRUE

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25
Q

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 of the gross selling price

A

TRUE

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26
Q

Initial payments do not include notes or other evidences of indebtedness issued by the purchaser to the seller at the time of sale

A

TRUE

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27
Q

Services subject to other percentage taxes are also subject to VAT

A

FALSE

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28
Q

A nonresident foreign lessor or licensor who is not VAT-registered is subject to VAT

A

TRUE

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29
Q

Persons whose transactions are exempt from VAT 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

A

TRUE

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30
Q

Which of the following shall not be subject to VAT?

I. MP Promotions, VAT registered, but gross sales for the year do not exceed P3,000,000
II. Mayweather Corporation, a foreign 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

a. MP Promotions and Mayweather Corporation
b. MP Promotions and Mailag Company
c. All of the above
d. None of the above

A

None of the above.

All of these transactions shall be subject to VAT.

I. MP Promotions, VAT registered, but gross sales for the year do not exceed P3,000,000
II. Mayweather Corporation, a foreign 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

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31
Q

A lessor of residential units shall be exempt from VAT when:

I. Annual gross receipts do not exceed P3,000,000
II. Monthly rental per unit does not exceed P15,000

a. I only
b. II only
c. Either I and II
d. Both I and II

A

Either I and II

I. Annual gross receipts do not exceed P3,000,000
II. Monthly rental per unit does not exceed P15,000

If monthly rental does not exceed 15,000, the entity is vat-exempt.
If the monthly rental exceeds 15,000 but the annual rental is less tahtn 3,000,000, the entity is subject to percentage tax

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32
Q

A lessor of commercial units shall be exempt from VAT when:

I. Annual gross receipts do not exceed P3,000,000
II. Monthly rental per unit does not exceed P15,000

a. I only
b. II only
c. Either I and II
d. Both I and II

A

I only

I. Annual gross receipts do not exceed P3,000,000

In the lease of commercial units, monthly rent is irrelevant

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33
Q

Which of the following is subject to VAT?

a. Sale of vegetables in its original state
b. Sale of fruits in its original state
c. Sale of copra
d. Sale of olive oil

A

Sale of olive oil

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34
Q

One of the following goods is not in its original state:

a. Salted eggs
b. Corn grits
c. Polished or husked rice
d. Refined brown sugar

A

Refined brown sugar

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35
Q

One of the following is not a poultry for VAT purposes:

a. Duck
b. Fowl
c. Goose
d. Fighting cock

A

Fighting cock

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36
Q

One of the following is not a livestock for VAT purposes:

a. Rabbit
b. Cow
c. Pig
d. Race horse

A

Race horse

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37
Q

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 subject to VAT?

a. JJ
b. Paul
c. Francis
d. None of the above

A

Neither JJ, Paul, nor Francis are subject to VAT.

38
Q

Arturo owns Eternal Gardens. He harvested fresh flowers and sold them to Leo. Leo sold the flowers in their original state to Raymund. The sale of flowers by Leo to Raymund shall be:

a. Subject to VAT
b. Exempt from VAT
c. Exempt from VAT or subject to VAT depending on annual gross receipts of Pedro
d. Subject to VAT if Juan did not subsequently sell it.

A

Subject to VAT

39
Q

Which of the following is the benefit of a VAT registered taxpayer if he is subject to zero percent (0%) VAT rate?

a. Exclusion from tax audit by tax examiner
b. Not required to file VAT return whether monthly or quarterly
c. He does not have any output tax although he may have an input tax credit which can be claimed for refund
d. He is entitled to tax discount equivalent to 20%

A

He does not have any output tax although he may have an input tax credit which can be claimed for refund

40
Q

Which of the following shall be exempt from value-added-tax?

I. Sales by agricultural cooperatives, duly registered with the Cooperative Department 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 Department Authority
III. Sales by non-agricultural, non-electric, and non-credit cooperatives duly registered with the Cooperative Department Authority

a. I and II only
b. I only
c. II and III only
d. I, II, and III

A

Only I and II are exempt from VAT

I. Sales by agricultural cooperatives, duly registered with the Cooperative Department 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 Department Authority

41
Q

Which of the following transactions is exempt from VAT?

a. Sale of books, newspaper, and magazines
b. Sale of literary works
c. Sale of musical compositions
d. All of the above

A

Sale of books, newspaper, and magazines

42
Q

All of the following except one, are subject to VAT?

a. Importation of radio and television equipment by broadcasting and television stations
b. Lease of cold storage rooms in ice plants and cold storage
c. Sale of paintings
d. None of the above

A

All of these transactions are subject to VAT

43
Q

Which of the following transactions is exempt from VAT?

a. Medical services such as dental and veterinary services rendered by professionals
b. Legal services
c. Services arising from employee-employer relationship
d. Services rendered by domestic air transport companies

A

Services arising from employee-employer relationship

44
Q

Which of the following is not subject to VAT?

a. Importation of goods in the ordinary course of business
b. Importation of items for personal use
c. Franchise grantees of radio broadcasting whose gross receipt for the preceding year was P9,000,000
d. VAT-registered person, whose annual gross receipt is less than P3,000,000

A

Franchise grantees of radio broadcasting whose gross receipt for the preceding year was P9,000,000

45
Q

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 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 VAT on importation
d. Goods exempt from customs duties classified as personal and household effects belonging to residents of the Philippines returning from abroad

A

Goods exempt from customs duties classified as personal and household effects belonging to residents of the Philippines returning from abroad

46
Q

Gross selling price includes all of the following, except

a. Total amount which the purchaser pays to the seller
b. Total amount which the purchaser is obligated to pay to the seller
c. Excise tax
d. Value-added tax

A

Value-added tax

47
Q

Which of the following statements is correct?

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
c. Neither a nor b

A

Export sale by a VAT registered person is subject to 0% VAT

48
Q

Which of the following statements is correct?

a. Under RA 7916, 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 of services, including provision of basic infrastructure, Registered Export Enterprise (REE), to be used directly and exclusively in its registered project or activity
c. Both a and b
d. Neither a nor b

A

Both a and b are correct.

a. Under RA 7916, 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 of services, including provision of basic infrastructure, Registered Export Enterprise (REE), to be used directly and exclusively in its registered project or activity

49
Q

Which among the following is subject to zero percent VAT?

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 in international shipping or transport operations
c. Transport of passenger and cargo by a domestic carrier (air or sea) from the Philippines to a foreign country.
d. All of these

A

Transport of passenger and cargo by a domestic carrier (air or sea) from the Philippines to a foreign country.

50
Q

One of the following is a zero-rated sale under the TRAIN Law

a. Export sale of a person who is VAT registered
b. Sale of nonfood agricultural products
c. Sale of gold to Bangko Sentral ng Pilipinas
d. Sale of cotton and cotton seeds

A

Export sale of a person who is VAT registered

51
Q

In the lease contract, which of the advance payment by the lessee is subject to output VAT?

a. A loan to the lessor from the lessee
b. Prepaid rental
c. An option money for the property
d. A security deposit to insure the faithful performance of certain obligations of the lessee to the lessor

A

Prepaid rental

52
Q

Which of the following shall be subject to VAT?

a. Sale of residential house and lot by the owners for P5,000,000
b. Sale of private car by its owner
c. Sale of commercial property by a real estate dealer for P1,500,000
d. All of the above

A

Sale of commercial property by a real estate dealer for P1,500,000

53
Q

On January 1, 2018, Pedro purchased a condominium unit worth P2,000,000 from Maxima Realty Corporation. A month after, Pedro purchased the adjacent unit for the same consideration. The purchased of the second (adjacent unit) is

a. Exempt from VAT
b. Subject to VAT
c. Subject to 0% VAT
d. None of the above

A

Subject to VAT

54
Q

On January 1, 2018, Pedro purchased a condominium unit including a parking space worth P4,200,000 from Maxima Realty Corporation. The value of the condominium unit, as stated in the contract of sale was P3,200,000 while the parking space was worth P1,000,000. The transaction is

a. Exempt from VAT
b. Subject to VAT
c. Subject to 0% VAT
d. None of the above

A

Subject to VAT

55
Q

Which statement is correct? Leasing of 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
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

A

All of these statements are correct:

a. If the property is in the Philippines and the lease agreement was executed in the Philippines
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

56
Q

Which of the following receipts for 2018 current year from lease of residential units is subject to VAT?

I. Monthly rental per unit-P14,000; Aggregate annual rent- P3,150,000
II. Monthly rental per unit-P18,000; Aggregate annual rent- P3,800,000
III. Monthly rental per unit-P18,000; Aggregate annual rent- P3,000,000
IV. Monthly rental per unit-P20,000; Aggregate annual rent- P4,000,000

a. II and IV only
b. III and IV only
c. All of the above
d. None of the above

A

The following receipts are subject to VAT:

II. Monthly rental per unit-P18,000; Aggregate annual rent- P3,800,000
IV. Monthly rental per unit-P20,000; Aggregate annual rent- P4,000,000

57
Q

Which is true? On sale of service, the tax base in computing for the VAT is

a. Gross selling price
b. Gross receipts
c. Amount per invoice
d. Amount shown in the official receipt

A

Gross receipts

58
Q

In the VAT on sale of services, the output tax is computed:

a. On billings of the month
b. On collections of the month on all billings made
c. On the contract price of contracts completed during the taxable period
d. Only and strictly on labor performed under the contract for services

A

On collections of the month on all billings made

59
Q

Which of the following statements is false?

a. Construction in progress is not depreciated until the asset is placed in service
b. For the purposes of claiming input tax, as a purchase of service, the value of which shall be determined based on the progress billing
c. The input tax credit on the labor contracted shall be recognized on the month the payment was made based on the progress billing
d. Once the input tax has already 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 depreciable capital asset and depreciated

A

Statement B is false.

For the purposes of claiming input tax, as a purchase of service, the value of which shall be determined based on the progress billing

60
Q

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 customers, and who, as a merchant, buys securities and resells them to customers with a view to the gains and profits that may be derived there from.

a. Dealer in securities
b. Stock brokers
c. Underwriters
d. Stock merchants

A

Dealer in securities

61
Q

Which of the following statement 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 purposes
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

a. I only
b. II only
c. Both I and II
d. Neither I nor II

A

Statement I and Statement II are both 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 purposes
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

62
Q

Which statement is correct? The output value added tax on goods or properties sold:

a. Is based on gross sales and not on net sales
b. Is not imposed on goods exported
c. Is imposed on actual sale only
d. May be due even in the absence of actual sale

A

May be due even in the absence of actual sale

63
Q

Which of the following is not a sale and therefore is not subject to the value-added tax?

a. Transfer, use or consumption not in the ordinary course of business of goods or properties ordinarily intended for sale or use in the course of business.
b. Distribution or transfer to shareholders or investors of share in the profits of a VAT-registered person.
c. Distribution or transfer to creditors in payment of debt.
d. Consignment sales.

A

Consignment sales.

64
Q

“Deemed sale” for VAT purposes includes inventories of taxable goods existing at the time of:

a. Change of control of a corporation thru the acquisition of the controlling interest.
b. Change in the trade name or corporate name of the business.
c. Merger or consolidation.
d. Dissolution of a partnership and the creation of a new partnership.

A

Dissolution of a partnership and the creation of a new partnership.

65
Q

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 credit against its business taxes.
b. In the books of a 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

A

All of these are correct statements:

a. A non-vat registered person could not claim the input vat on its purchases as tax credit against its business taxes.
b. In the books of a 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.

66
Q

Which statement is not correct?

a. The excess input taxes of a taxable month arising from domestic
sales may be carried over to the succeeding month.
b, The excess input taxes of a taxable quarter arising from domestic sales may be carried over to the succeeding quarter.
c. The excess input taxes of a taxable period arising from domestic sales may be refunded.
d. The excess input taxes of a payable period arising from exports sales may be refunded.

A

The excess input taxes of a taxable period arising from domestic sales may be refunded.

67
Q

Which of the following importation is subject to value added tax?

a. Importation for personal use of the importer
b. Importation intended for resale
c. Importation of machinery for the importers factory
d. All of the above

A

All of the following is subject to VAT:

a. Importation for personal use of the importer
b. Importation intended for resale
c. Importation of machinery for the importers factory

68
Q

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 vat correct?

a. Yes, because only vat registered importers should be subject to vat.
b. No, because importations, unless exempted, should be subject to vat.
c. Yes, because the package was intended for personal use, and therefore, he was not an importer.
d. No, because Lester may actually sell the package, depriving the BOC to collect the applicable input vat.

A

No, because importations, unless exempted, should be subject to vat.

69
Q

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 shall buy the imported goods.

III. Non-exempt persons or entities who acquire tax free imported goods from exempt persons, entities or agencies shall be considered the importer for Philippine VAT purposes.

a. I only
b. I and Il only
c. III only
d. None of the above

A

Statement III is correct.

Non-exempt persons or entities who acquire tax free imported goods from exempt persons, entities or agencies shall be considered the importer for Philippine VAT purposes.

70
Q

Which statement is correct? Vat on importation

a. Should be paid by the tax exempt importer, if he subsequently sells the goods to a non-tax exempt purchaser.
b. Should be paid by the non-tax exempt purchaser to whom the tax exempt importer sells it.
c. Is a liability shall either of the tax exempt importer or the non-tax exempt purchaser.
d. Shall not pay the value added tax because the transaction was exempt at the point of importation.

A

Should be paid by the non-tax exempt purchaser to whom the tax exempt importer sells it.

71
Q

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 tax.
d. Goods exempt from customs duties classified as personal and household effects belonging to residents of the Philippines returning from abroad

A

This transaction 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

72
Q

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

A

Facilitation expense

73
Q

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 of capital assets, excluding VAT, exceeds P1,000,000
d. VAT taxpayer has secured prior approval for him to amortized input tax on purchases of capital assets.

A

Aggregate monthly purchases of capital assets, excluding VAT, exceeds P1,000,000

74
Q

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 of 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. Statements 1 and 2 are true

A

The following statements are false:

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 of property is less than 5 years.

75
Q

For purposes of claiming input vat on depreciable assets, the aggregate acquisition cost of a depreciable asset in any calendar month refers to the:

a. Total price agreed upon for one or more assets acquired during the calendar month.
b. Payments actually made during the calendar month.
c. Total price agreed upon for one asset only acquired during the calendar month.
d. Initial payments made if purchased on installment plan.

A

Total price agreed upon for one or more assets acquired during the calendar month.

76
Q

A taxpayer has excess credit as a result of input taxes paid on purchases of capital goods. He may:

a. Have his excess tax credit refunded to a VAT registered person.
b. Make his application for refund in the subsequent period following the period during which the purchases were made.
c. Carry-over and apply his excess tax credit against output taxes in the subsequent period or periods.
d. Use it in payment of any internal revenue tax of a VAT registered person.

A

Carry-over and apply his excess tax credit against output taxes in the subsequent period or periods.

77
Q

If the depreciable capital good 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:

a. Claimed as input tax credit in its entirety during the month or quarter when the sale or transfer was made.
b. Amortized over the remaining life of the capital good.
c. Claimed as input tax credit in its entirety or amortized over the remaining life of the capital good at the option of the taxpayer.
d. Expensed outright in the month or quarter the sale or transfer was made.

A

Claimed as input tax credit in its entirety during the month or quarter when the sale or transfer was made.

78
Q

Persons or firms engaged in the processing of sardines, mackerel and milk, and in manufacturing refined sugar and cooking oil shall be allowed.

I. Creditable input tax
II. Transitional input tax
III. Presumptive input tax
IV. Refundable input tax

a. I only
b. I and Il only
c. I, Il and Ill only
d. I,II, III and IV

A

I. Creditable input tax
II. Transitional input tax
III. Presumptive input tax

79
Q

Which of the following businesses is allowed a presumptive input vat?

a. Manufacturer of canned goods.
b. Manufacturer of packed noodles
c. Manufacturer of packed juices
d. Manufacturer of dried fish

A

Manufacturer of packed noodles

80
Q

Who may claim transitional input tax as tax credit against output tax?

a. Processor or manufacturer of cooking oil or refined sugar.
b. Those whose transaction is subject to zero percent VAT.
c. VAT taxpayer from being VAT exempt or non-VAT taxpayer.
d. Those who sell goods or services to persons or entities whose exemption from tax is provided by special law or by international agreement to which the Philippines is a signatory.

A

VAT taxpayer from being VAT exempt or non-VAT taxpayer.

81
Q

One of the following shall not be entitled to transitional input tax

a. Taxpayers who become liable to vat for the first time under a new legislation.
b. Taxpayers who are already vat registered person and also deal in goods or property, the sale of which is exempt but becomes vatable transaction under a new amendatory law.
c. Taxpayers whose taxable transactions exceeded the vat registration threshold of P3,000,000
d. Taxpayers who elect to revert to being a vat exempt from being vat subject.

A

These persons shall not be entitled to transitional input tax:

Taxpayers who elect to revert to being a vat exempt from being vat subject.

82
Q

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

a. First day of the month following the registration
b. First day of the month following the close of the first quarter after registration.
c. Tenth day of the month following the close of the first quarter after registration.
d. Twenty fifth day following the close of the quarter.

A

First day of the month following the registration

83
Q

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 services 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.

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. Statements 1 and 2 are true

A

Both statements are true.

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 services 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.

84
Q

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.

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. Statements 1 and 2 are true

A

Both statements are true.

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.

85
Q

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 a sale on deferred payment basis not qualifying under the installment plan, payments subsequent to the initial payments shall no longer be subject to vat.

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. Statements 1 and 2 are true

A

Both statements are true.

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 a sale on deferred payment basis not qualifying under the installment plan, payments subsequent to the initial payments shall no longer be subject to vat.

86
Q

Which of the following is not correct pertaining to the transactions of a business which is engaged in Vat and non-Vat transactions?

a. Vat invoice shall be issued for vat transactions.
b. Non-Vat invoice shall be issued to Non-Vat transactions.
c. Separate Vat invoice for the taxable transactions and Non-vat invoice for the Vat exempt transactions.
d. Only one invoice for both Vat and non-Vat transactions shall be issued.

A

Only one invoice for both Vat and non-Vat transactions shall be issued.

87
Q

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 Input Taxes account.
b. May be debited at the time of purchase to the Purchases account.
c. Must be allocated immediately and at the time of purchases between the VAT and Non-VAT business.
d. Must be allocated between the VAT and Non-VAT business at the end of the taxable period.

A

This statement is wrong:

Must be allocated immediately and at the time of purchases between the VAT and Non-VAT business.

88
Q

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:

I. The vat registration number.
II. The total amount which the purchaser pays or is obligated to pay the seller with the indication that such amount includes the vat.

a. Only II
b. Neither I nor II
c. Both I and II
d. only I

A

The invoice must contain:

I. The vat registration number.
II. The total amount which the purchaser pays or is obligated to pay the seller with the indication that such amount includes the vat.

89
Q

Quarterly VAT return is filed on or before the:

a. 15th day from the end of each quarter
b. 20th day from the end of each quarter
c. 25th day from the end of each quarter
d. 30th day from the end of each quarter

A

25th day from the end of each quarter

90
Q

Mr. Juan Dela Cruz, VAT-exempt, issued VAT invoice to Pedro, VAT registered trader. As a consequence, Mr. Juan Dela Cruz would:

a. Be liable to VAT without the benefit of input tax credit;
b. Not be liable to Vat because he is VAT- exempt;
c. Be liable to percentage tax, VAT, and a surcharge of 50%
d. Not be liable to any business tax but may be liable to income tax.

A

Be liable to percentage tax, VAT, and a surcharge of 50%

91
Q

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.

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. Statements 1 and 2 are true

A

Both statements are true.

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.

BLT 4A (8 decks)

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