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Name: ______________________________

1.

2.

Which is incorrect?
a. A taxpayer whose annual gross receipts/sales exceed P
1,919,500 shall pay VAT even if not VAT registered
b. A taxpayer whose annual receipts/sales do not exceed P
1,919,500 but who is VAT registered shall pay Vat.
c. The same transaction may be subjected to both income
tax and VAT
d. Marginal income earners are both exempt from VAT and
income tax.

12. Refers to a local sale of service by VAT-registered person to a


person or entity who was granted indirect tax exemption under
the special laws or international agreement.
a. Automatic zero-rated transactions
b. Effective zero-rated transactions
c. VAT-exempt transactions.
d. Zero-rated transactions.

KATRINA invested P500, 000 in the shares of stock of Manila


Trading Corp. Later she sold the said shares for only P350, 000.
The corporations shares are listed and are traded in the local
stock exchange. The percentage tax on the sale is:
a. None
c. P 1, 750
b. P 2, 500
d. P 50, 000

13. Which of the following are zero-rated transactions?


a. Sale of services to Asian Development Bank
b. Sale of services to Internation Rice Research Institute
c. Sale of gold to Bangko Sentral ng Pilipinas
d. Sale of services to duly registered and accredited
enterprises with Philippine Economic Zone Authority.

(500,000x 0.5&)
3.

4.

5.

6.

The following accounting records reveal:


Accounts Receivable, Beginning
P 100,000
Accounts Receivable, Ending
110,000
Inventory, Beginning
50,000
Inventory, Ending
65,000
Purchases
90,000
Sales
250,000
Purchase Discount
5,000
Sales Return
10,000
Collections
200,000
Cost of Sales
70,000
How much is the vatable sales?
a. P 250,000
c. P 230,000
b. P 240,000
d. P 200,000
How much is the outout VAT?
a. P 27,600
b. P 28,800

c. P 30,000
d. P 24,000

How much is the input VAT?


a. P 10,200
b. P 10,800

c. P 8,400
d. None

The following events happen in a VAT enterprise:


June perfomance of services
July received an invoice amount of P 112,000
August paid the services.
When and how much input VAT will be claimed?
a. July, P12,000
c. August, P12,000
b. July, P13,440
d. August, P13,440

7.

A VAT enterprise had a VAT exempt transaction, however, it only


has a VAT invoice. As the accountant of the enterprise what will
you advise?
a. Stamp VAT EXEMPT on the duplicate VAT invoice.
b. Charge and collect output VAT from client
c. Charge output and refund to client
d. Error in transaction does not pay output

8.

When to file VAT return?


a. Monthly
b. Quarterly

9.

c. Yearly
d. Weekly

When will you submit the required sales summary list to the
BIR?
a. Attached with the monthly VAT return
b. Attached with the quarterly VAT return
c. Submit only if sales exceeds P 2,500,000
d. Submit even if sales do not exceed P 2,500,000

10. Who are allowed to withhold VAT from its VAT suppliers?
a. Entities, organization, business or corporation duly
registered with Philippine Economic Zone Authority.
b. Non-resident individuals and corporation.
c. Government or any of its instrumentalities including
government owned and controlled corporation.
d. Resident foreign corporation doing business in the
Phillippines.
11. Which of the following is subject to other percentage tax?
a. Business with annual gross receipts do not exceed P
1,919,500.
b. Unregistered VAT enterprises.
c. Businesses who are engaged in sale of services and
goods.

d.

Businesses who are engaged in importation.

14. What input taxes may be credietd?


a. Input taxes from non-VAT suppliers
b. Input taxes from purchase of direct labor
c. Input taxes from importation of goods for sale
d. Input taxes from importation of personal and household
effects.
15. Diety is non-stock, non-profit organization made an importation
of agricultural food product in its original state from a
Chinese farmer amounting to P 2,240,000. If you are the
Customs Collector, how will you treat such importation?
a. Subject to 12% VAT.
b. Subject to zero-rated VAT.
c. Exempted from VAT.
d. Subject to 3% other percentage tax.
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
amount of P 5,000,000. Your advise would be: Such transaction
will be subject to
a. 12% VAT
b. Zero-rated VAT
c. Exempt from VAT
d. 3% other percentage tax
(subject to 6% CGT, exempt VAT)
17. Which of the following is exempt from VAT?
a. Export sale by non-VAT individuals.
b. Foreign currency denominated transactions
c. Sale of services to entities duly registered with PEZA
d. Sale to Ramon Magsaysay Awards Foundation
(b,c,d subject to 0% VAT)
18. Construction by XYZ Construction Corp. of concrete barrier for
the Asian Development Bank in Ortigas Center to prevent car
bombs ramming the ADB gates along ADB Avenue in
Mandaluyong City is subject to what business tax?
a. 12% VAT
b. 0% VAT
c. Exempt from VAT
d. None of the above
19. Call Center operated by a domestic enterprises in Makati that
exclusively the reservations of a hotel chain which are all located
in North America. The services are paid for in US $ and duly
accounted for with the rulings of Bangko Sentral ng Pilipinas. Is
subject to:
a. 12% VAT
b. 0% VAT
c. Exempt from VAT
d. None of the above
20. Sale of orchids by a flower shop which raises its flower in
Tagaytay is subject to:
a. 12% VAT
b. 0% VAT
c. Exempt from VAT
d. None of the above
21. Which statement is considered correct?
a. An excise tax which imposes a tax based on weight or
volume capacity or any other physical unit of measurement
is called graduated tax.

Name: ______________________________
b.

c.
d.

An excise tax which imposes a tax based on selling price


or other specified value of the article is called ad valorem
tax.
A percentage tax which is imposed whether the transaction
resulted in a gain or loss is called indirect tax.
All of the above.

22. Alamid exported cigarettes to Taiwan for sale. He is subject to


the value-added tax. He is also subject to the business tax of:
a. Excise tax
c. Percentage tax
b. Income tax
d. None of these

23. Burgos is manufacturer of fermented liquors. In making sales, all


taxes on the products and transactions are passed on to the
buyers. For purposes of the value-added tax, which of the three
taxes listed below that he pays forms part of the gross selling
price?
a. Excise tax
c. Percentage tax
b. Value-added tax
d. None of these
24. Cantor is a VAT-registered manufacturer of liquors. On his sales
in the Philippines, his tax is:
a. Excise tax
c. Percentage tax
b. Value-added tax
d. A and B
25. Statement 1: A person subject to excise tax is also subject to
value-added tax.
Statement 2: A person subject to percentage tax is also subject
to value-added tax.
a. Both statements are correct
b. Both statements are wrong
c. Statement 1 is correct while Statement 2 is wrong
d. Statement 1 is wrong while Statement 2 is correct
26. Which statement is wrong? Value-added tax on importation of
goods:
a. Is imposed on an importation for sale or for use in
business.
b. Is imposed on an importation for personal use.
c. Should be paid prior to removal from customs custody.
d. Is not available as input tax even if related to business.
(input tax on importation is availbale only for business
related importation)
27. One of the following statements is incorrect.
a. Imported goods which are subject to excise tax are no
longer subject to value-added tax.
b. VAT on the importation is paid to the Bureau of Customs
before the imported goods are released from its custody.
c. Expenses incurred after the goods are released from
customs custody are disregarded in computing VAT on
importation.
d. When a person who enjoys tax-exemption on his
importation subsequently sells in the Philippines such
imported articles to non-exempt person, the purchasernon-exempt person shall pay the VAT on such importation.
28. Which statement is correct? The value-added tax on an
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 either of the tax-exempt importer or the nontax-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,
review or bulletin.
b. Importation of agricultural and marine food products in
their original state.
c. Importation of petroleum products and their raw materials.

d.

Importation or sale of fish, prawn, livestock and poultry


feeds.
30. Which statement is not correct? 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 organization.
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 for a gross selling price
or receipts of P 500,000.
31. Statement 1: Non-stock and non-profit private organizations
which sell exclusively to their members in the regular conduct or
pursuit of commercial or economic activity are not exempt from
value-added tax.
Statement 2: Government entities engaged in commercial or
economic activity are generally exempt from value-added tax.
a. Both statements are correct.
b. Both statements are incorrect.
c. Only the first statement is correct.
d. Only the second statement is correct.
32. Statement 1: Any person who is VAT-registered but enters into
transactions which are exempt from VAT (mixed transactions)
may opt that the VAT apply to his transactions which would have
been exempt under Sec. 109 (1) of the Tax Code as amended.
Statement 2: A seller or lessor of VAT-subject goods, properties
or services whose actual or expected gross sales and/or receipt
do not exceed P1,919,500 for any 12-month period who
registers under the VAT system shall be subject to zero rate on
his exports.
a. Both I and II are true
b. Both I and II are false
c. Only I is true
d. Only II is true
33. Which of the following statements is incorrect?
a. A taxpayer whose annual gross receipts/sales exceed P
1,919,500 shall pay VAT even if he is not VAT registered.
b. A taxpayer whose annual gross receipts/sales do not
exceed P 1,919,500 but who is VAT-registered shall pay
VAT.
c. Percentage tax may be imposed together with VAT.
d. Percentage tax maybe imposed together with excise tax.
34. One of the following statements is incorrect, which is it?
a. Imported goods which are subject to excise tax are no
longer subject to VAT.
b. VAT on importation is paid to the Bureau of Customs
before the imported good are released from its custody.
c. Expenses incurred after the goods are released from
Customs custody are disregarded in computing the VAT on
importation
d. When a person who enjoys a tax-exemption on his
importation subsequently sells in the Philippines such
imported articles to a non-exempt person, the purchasernon-exempt person shall pay the VAT on such importation.
35. Which of the following importation is subject to VAT?
a. Importation of frozen meat
b. Importation of apples for personal consumption
c. Importation of bamboo poles
d. Importation of grapes for sales

Tax Rates
Coverage

Basis

Tax
Rate

Name: ______________________________
Persons exempt from VAT Gross Sales or
under Sec. 116
Receipts

3%

Domestic carriers and


keepers of garages

Gross Receipts

3%

Gross Receipts

3%

Gross Receipts

2%

Radio and television


Gross Receipts
broadcasting companies
whose annual gross
receipts of the preceding
year do not exceed P
10,000,000 and did not opt
to register asVAT taxpayer

3%

Finance Companies

International
Carriers:
International air/shipping
carriers doing business in
the Philippines

Interest,
commissions and
discounts paid from
their loan
transactions from
finance companies
as well as income
from financial
leasing shall be
taxed based on the
remaining
maturities of
instruments:

Franchise Grantees:
Electric , gas and water
utilities

Banks and non-bank


financing intermediaries

On interest,
5%
discounts and other
items of gross
income paid to
finance companies
and other financial
intermediaries not
performing quasi
banking functions

Short term
5%
maturity (not over 2
years)

Interest,
commissions and
discounts from
lending activities as
well as income from
leasing on the basis
of remaining
maturities of
instruments:

Medium term
(over 2 years but
not over 4 years)

3%

Long Term
Maturity
Over 4 years but 1%
not over 7 years

Short term
5%
maturity (not over 2
years)

Over 7 years

0%

Medium term
3%
maturity (over 2
years but not over 4
years)

Life Insurance Companies Total premiums


(except purely cooperative collected
companies or
associations)

5%

Long term
maturity

Agents of foreign
insurance companies:
(except reinsurance
premium)

1%
Over 4 years
but not over 7
years

Total premium
collected

10%

Total premium
collected

5%

Cockpits

Gross receipts

18%

Cabarets, Night or Day


Clubs

Gross receipts

18%

Boxing exhibitions

Gross receipts

10%

Professional basketball
games

Gross receipts

15%

Jai-alai and race track

Gross receipts

30%

0%
Over 7 years
On Dividends

0%

On royalties, rentals 5%
of properties, real
or personal, profits
from exchange and
all other items
treated as gross
income under Sec.
32 of the Code

Proprietors, lessee or
operator of the following:

Name: ______________________________
(operators shall withheld
tax on winnings)
Every stock broker who
effected a sale, barter,
exchange or other
disposition of shares of
stock listed and traded
through the Local Stock
Exchange (LSE) other
than the sale by a dealer
in securities

Gross selling price of 1%


or gross value in
money of shares of
stocks sold,
bartered,
exchanged or
otherwise disposed

A corporate issuer/stock
broker, whether domestic
of foreign, engaged in the
sale, barter, exchange or
other disposition through
Initial Public Offering

Gross selling price


or gross value of in
money of shares of
stocks sold,
bartered,
exchanged or

(IPO)/secondary public
offering of shares of stock
in closely held
corporations

otherwise disposed
in accordance with
the proportion of
stocks sold,
bartered or
exchanged or after
listing in the stock
exchange
Up to 25 %

4%

Over 25% but not 2%


over 33 1/3%
Over 33 1/3 %

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