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He May Be Subject To VAT
He May Be Subject To VAT
In the
preceding year, his gross receipts from the practice of public accounting was P1,960,000 while
his total compensation income as college professor was P190,000.
a. He is subject to VAT effective January 1 of the current year.
b. He may be subject to VAT if he voluntarily registers under the VAT system
c. He is not required to pay either VAT or any business tax
d. He is required to pay professional tax but not business tax
2. Which importation is subject to VAT?
a. Importation of fuels by a person engaged in international shipping worth P20million.
b. Importation of refrigerated Kobe beef from Japan by a beef dealer for sale to hotels in
Makati City with a fair market value of 8Million.
c. Importation of wines by a wine dealer with a fair market value of 4Million for sale to hotels
in Quezon City.
d. Importation of books worth P5 Million and magazines worth 3 Million
3. Mr. S Magler imported cigarettes from the United States for sale in the Philippines. What
business taxes in the Philippines are due?
a. VAT, excise tax, other percentage tax
b. VAT and excise tax
c. VAT only
d. VAT and percentage tax
4. Which importation is not VAT-exempt?
a. Importation of personal and household effects of residents coming to resettle in the
Philippines.
b. Importation of personal and household effects of foreigners coming to settle permanently in
the Philippines
c. Importation of personal and household effects which are subject to customs duties
d. All of these
5. The Trump Shop sells cakes and pastry items to well-known hotels around the 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 Trump Shop in April of Year X were P220,000, including
the value-added tax. 75% of the sales are normally on account. How much is the VAT on the
sales amount for the month of April, Year X?(round off to 2 decimal digits, if
applicable)_______________23,571.43
6. Which of the following statements is wrong: the value-added tax is;
a. Not an expense
b. A tax credit
c. Not a part of the gross selling price
d. On purchases, is a part of the cost of inventory
7. Obama, a Japanese residing in the Philippines, bought garments from Bong Go Corp., a domestic
corporation, and exported the same to Japan. Total value of export is P100,000. VAT or output
tax due on the transaction is______________0
8. Prices/costs of a VAT taxpayer with purchases from VAT suppliers, VAT not included:
Purchases 210,000
9. Which statement is wrong? Transactions considered “in the course of trade or business”, And
therefore subject to the business taxes include:
a. Regular conduct or pursuit of a commercial or an economic activity by a stock private
corporation.
b. Regular conduct or pursuit of a commercial or an economic activity by a non-stock, non-
profit private organization.
c. Isolated services in the Philippines by non-resident foreign persons.
d. Isolated sale of goods or services.
10. Trump is a CPA. He applied for work and was hired by a firm which is engaged in Business
Process Outsourcing, handling accounting work for US entities. He was paid for his services. How
would Trump treat such payment for business tax purposes?
a. Subject to 12% VAT
b. Subject to percentage tax
c. Exempt from VAT and percentage tax
d. It is a zero-rated transaction
11. Mr. Dennis Uy imported various merchandise from abroad. The importation was invoiced at
5,000 dollars. Mr. Uy also incurred the following costs of importation:
Insurance P4,000
Freight 15,000
Wharfage fee 4,000
Arrastre charge 7,000
Brokerage fee 8,000
Facilitation fee 5,000
Mr. Uy was also assessed P24,000 and P18,000, respectively, for customs duties and excise tax.
The applicable exchange rate was P42.50:$1
12. Swift Company had the following data regarding its importation:
Furniture P600,000
Rattan 250,000
Lumber 450,000
Hinto Company has the following data which relates to the importation of cigarettes:
Mr. Trump also reported the following from his client in his consultancy business:
17. Statement 1: Services specifically subject to percentage tax are subject to VAT if not subjected
to percentage tax
Statement 2: A person who wishes to register as a VAT taxpayer despite not meeting the VAT
threshold is called a “registrable person”
18. Trump owns a humble carinderia near a grab riders’ parking area. Its annual gross receipts range
from P300,000 to P550,000. In February, gross receipts amounted to P18,700 while purchases of
goods subject to VAT is P5,000 and not subject to VAT, 12,000.
If trump is a VAT-registered taxpayer and the amounts indicated are exclusive of VAT, the value
added tax due is________________1,644
a. I only
b. I and ii
c. I,ii and iii
d. None
20. Which of the following statements is true?
a. A hongkong national who comes to the Philippines for a tourist visit in Boracay shall be
entitled to a 20% discount on plane fare and hotel accommodations
b. A senior citizen who buys fishball from an ambulant vendor shall be entitled a 20% discount
on amount which is net of VAT.
c. The monthly electric bill on a senior citizen shall be subject to 5% discount based on the
amount which is net of VAT
d. A multi-millionaire senior citizen shall also be entitled to the 20% discount
21. Trump Management is a domestic corporation. It is an affiliate of SunLife, organized by the latter
to perform collection, consultation and other technical services, including functioning as an
internal auditor of SunLife. These services were performed on a “non-profit, reimbursement of
cost only” by Trump. The services rendered by Trump was subjected to value-added tax by the
BIR. Which of the following arguments of Trump Management is correct?
I. Exempt from VAT because the service was not considered in the ordinary course of
trade or business
II. Exempt from VAT because Trump Management was established only to ensure
operational orderliness and administrative efficiency by SunLife, and not in the sale of
services.
a. I only
b. II only
c. Either I or II
d. Neither I or II
22. Where even if there is no business, VAT is imposable on:
I. Importations of goods for personal use
II. Services rendered in the Philippines by nonresident foreign corporations, even isolated ,
shall be considered as being rendered in the course of trade or business.
a. I only
b. II only
c. I and II
d. None of the above