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Name: ______________________________

1. Which is incorrect? d. Businesses who are engaged in importation.


a. A taxpayer whose annual gross receipts/sales exceed P
1,919,500 shall pay VAT even if not VAT registered 12. Refers to a local sale of service by VAT-registered person to a
b. A taxpayer whose annual receipts/sales do not exceed P person or entity who was granted indirect tax exemption under
1,919,500 but who is VAT registered shall pay Vat. the special laws or international agreement.
c. The same transaction may be subjected to both income a. Automatic zero-rated transactions
tax and VAT b. Effective zero-rated transactions
d. Marginal income earners are both exempt from VAT and c. VAT-exempt transactions.
income tax. d. Zero-rated transactions.

2. KATRINA invested P500, 000 in the shares of stock of Manila 13. Which of the following are zero-rated transactions?
Trading Corp. Later she sold the said shares for only P350, 000. a. Sale of services to Asian Development Bank
The corporation’s shares are listed and are traded in the local b. Sale of services to Internation Rice Research Institute
stock exchange. The percentage tax on the sale is: c. Sale of gold to Bangko Sentral ng Pilipinas
a. None c. P 1, 750 d. Sale of services to duly registered and accredited
b. P 2, 500 d. P 50, 000 enterprises with Philippine Economic Zone Authority.

14. What input taxes may be credietd?


(500,000x 0.5&) a. Input taxes from non-VAT suppliers
b. Input taxes from purchase of direct labor
3. The following accounting records reveal: c. Input taxes from importation of goods for sale
Accounts Receivable, Beginning P 100,000 d. Input taxes from importation of personal and household
Accounts Receivable, Ending 110,000 effects.
Inventory, Beginning 50,000
Inventory, Ending 65,000 15. Diety is non-stock, non-profit organization made an importation
Purchases 90,000 of agricultural food product in its original state from a
Sales 250,000 Chinese farmer amounting to P 2,240,000. If you are the
Purchase Discount 5,000 Customs Collector, how will you treat such importation?
Sales Return 10,000 a. Subject to 12% VAT.
Collections 200,000 b. Subject to zero-rated VAT.
Cost of Sales 70,000 c. Exempted from VAT.
How much is the vatable sales? d. Subject to 3% other percentage tax.
a. P 250,000 c. P 230,000
b. P 240,000 d. P 200,000 16. Mr. San Diego approached you and asked for your professional
help with regard to a sale of his ancestral house and lot in the
4. How much is the outout VAT? amount of P 5,000,000. Your advise would be: Such transaction
a. P 27,600 c. P 30,000 will be subject to
b. P 28,800 d. P 24,000 a. 12% VAT
b. Zero-rated VAT
5. How much is the input VAT? c. Exempt from VAT
a. P 10,200 c. P 8,400 d. 3% other percentage tax
b. P 10,800 d. None
(subject to 6% CGT, exempt VAT)
6. The following events happen in a VAT enterprise:
June perfomance of services 17. Which of the following is exempt from VAT?
July received an invoice amount of P 112,000 a. Export sale by non-VAT individuals.
August paid the services. b. Foreign currency denominated transactions
When and how much input VAT will be claimed? c. Sale of services to entities duly registered with PEZA
a. July, P12,000 c. August, P12,000 d. Sale to Ramon Magsaysay Awards Foundation
b. July, P13,440 d. August, P13,440
(b,c,d subject to 0% VAT)
7. A VAT enterprise had a VAT exempt transaction, however, it only
has a VAT invoice. As the accountant of the enterprise what will 18. Construction by XYZ Construction Corp. of concrete barrier for
you advise? the Asian Development Bank in Ortigas Center to prevent car
a. Stamp “VAT EXEMPT” on the duplicate VAT invoice. bombs ramming the ADB gates along ADB Avenue in
b. Charge and collect output VAT from client Mandaluyong City is subject to what business tax?
c. Charge output and refund to client a. 12% VAT
d. Error in transaction does not pay output b. 0% VAT
c. Exempt from VAT
8. When to file VAT return? d. None of the above
a. Monthly c. Yearly
b. Quarterly d. Weekly 19. Call Center operated by a domestic enterprises in Makati that
exclusively the reservations of a hotel chain which are all located
9. When will you submit the required sales summary list to the in North America. The services are paid for in US $ and duly
BIR? accounted for with the rulings of Bangko Sentral ng Pilipinas. Is
a. Attached with the monthly VAT return subject to:
b. Attached with the quarterly VAT return a. 12% VAT
c. Submit only if sales exceeds P 2,500,000 b. 0% VAT
d. Submit even if sales do not exceed P 2,500,000 c. Exempt from VAT
d. None of the above
10. Who are allowed to withhold VAT from its VAT suppliers?
a. Entities, organization, business or corporation duly 20. Sale of orchids by a flower shop which raises its flower in
registered with Philippine Economic Zone Authority. Tagaytay is subject to:
b. Non-resident individuals and corporation. a. 12% VAT
c. Government or any of its instrumentalities including b. 0% VAT
government owned and controlled corporation. c. Exempt from VAT
d. Resident foreign corporation doing business in the d. None of the above
Phillippines.
11. Which of the following is subject to other percentage tax? 21. Which statement is considered correct?
a. Business with annual gross receipts do not exceed P a. An excise tax which imposes a tax based on weight or
1,919,500. volume capacity or any other physical unit of measurement
b. Unregistered VAT enterprises. is called graduated tax.
c. Businesses who are engaged in sale of services and
goods.
Name: ______________________________
b. An excise tax which imposes a tax based on selling price d. Importation or sale of fish, prawn, livestock and poultry
or other specified value of the article is called ad valorem feeds.
tax. 30. Which statement is not correct? Transactions considered “in the
c. A percentage tax which is imposed whether the transaction course of trade or business” and, therefore, subject to the
resulted in a gain or loss is called indirect tax. business taxes include:
d. All of the above. a. Regular conduct or pursuit of a commercial or an
economic activity by a stock private organization.
22. Alamid exported cigarettes to Taiwan for sale. He is subject to b. Regular conduct or pursuit of a commercial or an
the value-added tax. He is also subject to the business tax of: economic activity by a non-stock, non-profit private
a. Excise tax c. Percentage tax organization.
b. Income tax d. None of these c. Isolated services in the Philippines by non-resident foreign
persons.
d. Isolated sale of goods or services for a gross selling price
23. Burgos is manufacturer of fermented liquors. In making sales, all or receipts of P 500,000.
taxes on the products and transactions are passed on to the
buyers. For purposes of the value-added tax, which of the three 31. Statement 1: Non-stock and non-profit private organizations
taxes listed below that he pays forms part of the gross selling which sell exclusively to their members in the regular conduct or
price? pursuit of commercial or economic activity are not exempt from
a. Excise tax c. Percentage tax value-added tax.
b. Value-added tax d. None of these Statement 2: Government entities engaged in commercial or
economic activity are generally exempt from value-added tax.
24. Cantor is a VAT-registered manufacturer of liquors. On his sales a. Both statements are correct.
in the Philippines, his tax is: b. Both statements are incorrect.
a. Excise tax c. Percentage tax c. Only the first statement is correct.
b. Value-added tax d. A and B d. Only the second statement is correct.

25. Statement 1: A person subject to excise tax is also subject to 32. Statement 1: Any person who is VAT-registered but enters into
value-added tax. transactions which are exempt from VAT (mixed transactions)
Statement 2: A person subject to percentage tax is also subject may opt that the VAT apply to his transactions which would have
to value-added tax. been exempt under Sec. 109 (1) of the Tax Code as amended.
a. Both statements are correct Statement 2: A seller or lessor of VAT-subject goods, properties
b. Both statements are wrong or services whose actual or expected gross sales and/or receipt
c. Statement 1 is correct while Statement 2 is wrong do not exceed P1,919,500 for any 12-month period who
d. Statement 1 is wrong while Statement 2 is correct registers under the VAT system shall be subject to zero rate on
his exports.
26. Which statement is wrong? Value-added tax on importation of a. Both I and II are true
goods: b. Both I and II are false
a. Is imposed on an importation for sale or for use in c. Only I is true
business. d. Only II is true
b. Is imposed on an importation for personal use.
c. Should be paid prior to removal from customs custody. 33. Which of the following statements is incorrect?
d. Is not available as input tax even if related to business. a. A taxpayer whose annual gross receipts/sales exceed P
1,919,500 shall pay VAT even if he is not VAT registered.
(input tax on importation is availbale only for business b. A taxpayer whose annual gross receipts/sales do not
related importation) exceed P 1,919,500 but who is VAT-registered shall pay
VAT.
27. One of the following statements is incorrect. c. Percentage tax may be imposed together with VAT.
a. Imported goods which are subject to excise tax are no d. Percentage tax maybe imposed together with excise tax.
longer subject to value-added tax.
b. VAT on the importation is paid to the Bureau of Customs 34. One of the following statements is incorrect, which is it?
before the imported goods are released from its custody. a. Imported goods which are subject to excise tax are no
c. Expenses incurred after the goods are released from longer subject to VAT.
customs custody are disregarded in computing VAT on b. VAT on importation is paid to the Bureau of Customs
importation. before the imported good are released from its custody.
d. When a person who enjoys tax-exemption on his c. Expenses incurred after the goods are released from
importation subsequently sells in the Philippines such Customs custody are disregarded in computing the VAT on
imported articles to non-exempt person, the purchaser- importation
non-exempt person shall pay the VAT on such importation. d. When a person who enjoys a tax-exemption on his
importation subsequently sells in the Philippines such
28. Which statement is correct? The value-added tax on an imported articles to a non-exempt person, the purchaser-
importation: non-exempt person shall pay the VAT on such importation.
a. Should be paid by the tax-exempt importer, if he
subsequently sells the goods to a non-tax-exempt 35. Which of the following importation is subject to VAT?
purchaser. a. Importation of frozen meat
b. Should be paid by the non-tax-exempt purchaser to whom b. Importation of apples for personal consumption
the tax-exempt importer sells it. c. Importation of bamboo poles
c. Is a liability either of the tax-exempt importer or the non- d. Importation of grapes for sales
tax-exempt purchaser.
d. Shall not pay the value-added tax because the transaction
was exempt at the point of importation.

29. Three of the following are exempt from the value-added tax.
Which is the exception?
a. Importation of books and any newspapers, magazines,
Tax Rates
review or bulletin.
b. Importation of agricultural and marine food products in
their original state.
c. Importation of petroleum products and their raw materials. Coverage Basis Tax
Rate
Name: ______________________________
Persons exempt from VAT Gross Sales or 3% Finance Companies On interest, 5%
under Sec. 116 Receipts discounts and other
items of gross
Domestic carriers and Gross Receipts 3%
income paid to
keepers of garages
finance companies
International and other financial
Carriers: intermediaries not
performing quasi
banking functions
International air/shipping Gross Receipts 3%
carriers doing business in Interest,
the Philippines commissions and
discounts paid from
Franchise Grantees: their loan
Electric , gas and water Gross Receipts 2% transactions from
utilities finance companies
as well as income
Radio and television Gross Receipts 3% from financial
broadcasting companies leasing shall be
whose annual gross taxed based on the
receipts of the preceding remaining
year do not exceed P maturities of
10,000,000 and did not opt instruments:
to register asVAT taxpayer
• Short term 5%
Banks and non-bank Interest, maturity (not over 2
financing intermediaries commissions and years)
discounts from
lending activities as • Medium term 3%
well as income from (over 2 years but
leasing on the basis not over 4 years)
of remaining • Long Term
maturities of Maturity
instruments:
ο Over 4 years but 1%
• Short term 5% not over 7 years
maturity (not over 2
years) ο Over 7 years 0%

• Medium term 3% Life Insurance Companies Total premiums 5%


maturity (over 2 (except purely cooperative collected
years but not over 4 companies or
years) associations)

• Long term Agents of foreign


maturity insurance companies:
(except reinsurance
1% premium)
ο Over 4 years
but not over 7 Total premium 10%
years collected

Total premium 5%
0% collected
ο Over 7 years
Proprietors, lessee or
operator of the following:
On Dividends 0%
Cockpits Gross receipts 18%
On royalties, rentals 5%
of properties, real Cabarets, Night or Day Gross receipts 18%
or personal, profits Clubs
from exchange and
Boxing exhibitions Gross receipts 10%
all other items
treated as gross Professional basketball Gross receipts 15%
income under Sec. games
32 of the Code
Jai-alai and race track Gross receipts 30%
Name: ______________________________
(operators shall withheld (IPO)/secondary public otherwise disposed
tax on winnings) offering of shares of stock in accordance with
in closely held the proportion of
Every stock broker who Gross selling price ½ of 1%
corporations stocks sold,
effected a sale, barter, or gross value in
bartered or
exchange or other money of shares of
exchanged or after
disposition of shares of stocks sold,
listing in the stock
stock listed and traded bartered,
exchange
through the Local Stock exchanged or
Exchange (LSE) other otherwise disposed • Up to 25 % 4%
than the sale by a dealer
• Over 25% but not 2%
in securities
over 33 1/3%
A corporate issuer/stock Gross selling price
• Over 33 1/3 % 1%
broker, whether domestic or gross value of in
of foreign, engaged in the money of shares of
sale, barter, exchange or stocks sold, [return to index]
other disposition through bartered,
Initial Public Offering exchanged or