Joseph Conrad E.

Hilario Taxation 2

1. For purposes of value-added tax, define, explain or distinguish the following terms:
(a) Input tax and output tax.
(b) Zero-rated and effectively zero-rated transactions.
(c) Destination principle.

2.  What do you mean, or define the phrase “in the course of trade or business.”
3.  What constitutes transactions done "in the course of trade or business" for purposes of
applying VAT?
4.  What do you mean by the term “goods or properties”? What does it include? 
5.  Does the term “gross selling price” include already the VAT component? How about the
excise tax on the article sold, if any, is it included in the gross selling price?
6. If Mr. X manufactures goods intended for export to a foreign country, but did not actually
export the same and instead sold the goods locally, are the goods so manufactured that were
originally intended for export, subject to VAT? Explain.
7. Are transfers, use or consumption not in the course of business of goods or properties
originally intended for sale or for use in the course of business, subject to VAT? Explain. What
are the transactions that are deemed sale?
8. Mr. Y is a non-resident citizen residing in the U.S.A. He owns a building in Makati which he
leases to Mr. W for P4M per year. Since Mr. Y is in USA, he requested Mr. W to go to the US to
sign the Contract of Lease, which was likewise notarized there. Question: Is the lease of the
property subject to VAT notwithstanding that the Contract of Lease was executed outside the
Philippines? Explain.
9. In the sale of services, is the amount charged for the materials supplied with the services,
included in the “gross receipts”?
10. Importation of goods into the Philippines by a tax-exempt person but such goods were
subsequently sold to a non-exempt person, shall result in what? Explain.
11. Is the sale or lease of goods or properties, or performance of services, the gross amount
thereof do not exceed P3M, subject to VAT or not? If not, under what provision of the tax code
is it subject to tax?
12. What is the consequence of issuing an erroneous VAT invoice or VAT Official Receipt?
13. When should a VAT Return be filed and the tax due thereon be paid?
14. Who are the persons required to pay other percentage taxes?
15. When should persons liable to pay percentage taxes file their returns and pay the same?