Name: ______________________________

1. Which is incorrect? a. Business with annual gross receipts do not exceed P

a. A taxpayer whose annual gross receipts/sales exceed P 1,919,500.
1,919,500 shall pay VAT even if not VAT registered b. Unregistered VAT enterprises.
b. A taxpayer whose annual receipts/sales do not exceed P c. Businesses who are engaged in sale of services and
1,919,500 but who is VAT registered shall pay Vat. goods.
c. The same transaction may be subjected to both income d. Businesses who are engaged in importation.
tax and VAT
d. Marginal income earners are both exempt from VAT and 12. Refers to a local sale of service by VAT-registered person to a
income tax. person or entity who was granted indirect tax exemption under
the special laws or international agreement.
2. KATRINA invested P500, 000 in the shares of stock of Manila a. Automatic zero-rated transactions
Trading Corp. Later she sold the said shares for only P350, 000. b. Effective zero-rated transactions
The corporation’s shares are listed and are traded in the local c. VAT-exempt transactions.
stock exchange. The percentage tax on the sale is: d. Zero-rated transactions.
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
(500,000x 0.5&) b. Sale of services to Internation Rice Research Institute
c. Sale of gold to Bangko Sentral ng Pilipinas
3. The following accounting records reveal: d. Sale of services to duly registered and accredited
Accounts Receivable, Beginning P 100,000 enterprises with Philippine Economic Zone Authority.
Accounts Receivable, Ending 110,000
Inventory, Beginning 50,000 14. What input taxes may be credietd?
Inventory, Ending 65,000 a. Input taxes from non-VAT suppliers
Purchases 90,000 b. Input taxes from purchase of direct labor
Sales 250,000 c. Input taxes from importation of goods for sale
Purchase Discount 5,000 d. Input taxes from importation of personal and household
Sales Return 10,000 effects.
Collections 200,000
Cost of Sales 70,000 15. Diety is non-stock, non-profit organization made an importation
How much is the vatable sales? of agricultural food product in its original state from a Chinese
a. P 250,000 c. P 230,000 farmer amounting to P 2,240,000. If you are the Customs
b. P 240,000 d. P 200,000 Collector, how will you treat such importation?
a. Subject to 12% VAT.
4. How much is the outout VAT? b. Subject to zero-rated VAT.
a. P 27,600 c. P 30,000 c. Exempted from VAT.
b. P 28,800 d. P 24,000 d. Subject to 3% other percentage tax.

5. How much is the input VAT? 16. Mr. San Diego approached you and asked for your professional
a. P 10,200 c. P 8,400 help with regard to a sale of his ancestral house and lot in the
b. P 10,800 d. None amount of P 5,000,000. Your advise would be: Such transaction
will be subject to
6. The following events happen in a VAT enterprise: a. 12% VAT
June perfomance of services b. Zero-rated VAT
July received an invoice amount of P 112,000 c. Exempt from VAT
August paid the services. d. 3% other percentage tax
When and how much input VAT will be claimed?
a. July, P12,000 c. August, P12,000 (subject to 6% CGT, exempt VAT)
b. July, P13,440 d. August, P13,440
17. Which of the following is exempt from VAT?
7. A VAT enterprise had a VAT exempt transaction, however, it a. Export sale by non-VAT individuals.
only has a VAT invoice. As the accountant of the enterprise what b. Foreign currency denominated transactions
will you advise? c. Sale of services to entities duly registered with PEZA
a. Stamp “VAT EXEMPT” on the duplicate VAT invoice. d. Sale to Ramon Magsaysay Awards Foundation
b. Charge and collect output VAT from client
c. Charge output and refund to client (b,c,d subject to 0% VAT)
d. Error in transaction does not pay output
18. Construction by XYZ Construction Corp. of concrete barrier for
8. When to file VAT return? the Asian Development Bank in Ortigas Center to prevent car
a. Monthly c. Yearly bombs ramming the ADB gates along ADB Avenue in
b. Quarterly d. Weekly Mandaluyong City is subject to what business tax?
a. 12% VAT
9. When will you submit the required sales summary list to the b. 0% VAT
BIR? c. Exempt from VAT
a. Attached with the monthly VAT return d. None of the above
b. Attached with the quarterly VAT return
c. Submit only if sales exceeds P 2,500,000 19. Call Center operated by a domestic enterprises in Makati that
d. Submit even if sales do not exceed P 2,500,000 exclusively the reservations of a hotel chain which are all located
in North America. The services are paid for in US $ and duly
10. Who are allowed to withhold VAT from its VAT suppliers? accounted for with the rulings of Bangko Sentral ng Pilipinas. Is
a. Entities, organization, business or corporation duly subject to:
registered with Philippine Economic Zone Authority. a. 12% VAT
b. Non-resident individuals and corporation. b. 0% VAT
c. Government or any of its instrumentalities including c. Exempt from VAT
government owned and controlled corporation. d. None of the above
d. Resident foreign corporation doing business in the
Phillippines. 20. Sale of orchids by a flower shop which raises its flower in
11. Which of the following is subject to other percentage tax? Tagaytay is subject to:
a. 12% VAT
Name: ______________________________
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.
b. An excise tax which imposes a tax based on selling price
or other specified value of the article is called ad valorem
tax.
c. A percentage tax which is imposed whether the transaction
resulted in a gain or loss is called indirect tax.
d. 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 purchaser-
non-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 non-
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,
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 purchaser-
non-exempt person shall pay the VAT on such importation.
35. Which of the following importation is subject to VAT?
Name: ______________________________
a. Importation of frozen meat
On royalties, 5%
b. Importation of apples for personal consumption
rentals of
c. Importation of bamboo poles
d. Importation of grapes for sales
properties, real
or personal,
profits from
exchange and
all other items
treated as gross
income under
Tax Rates Sec. 32 of the
Code

Coverage Basis Tax Finance Companies On interest, 5%

Rate discounts and
other items of
Persons exempt from Gross Sales or 3% gross income
VAT under Sec. 116 Receipts paid to finance
companies and
Domestic carriers and Gross Receipts 3%
other financial
keepers of garages
intermediaries
International not performing
Carriers:                                  quasi banking
                                         functions
               
  Interest,  
International Gross Receipts 3% commissions
air/shipping carriers and discounts
doing business in the paid from their
Philippines loan
transactions
Franchise Grantees:
from finance
Electric , gas and Gross Receipts 2% companies as
water utilities well as income
from financial
Radio and television Gross Receipts 3%
leasing shall be
broadcasting
taxed based on
companies whose
the remaining
annual gross receipts
maturities of
of the preceding year
instruments:
do not exceed P
10,000,000 and did   •  Short term 5%
not opt to register maturity (not
asVAT taxpayer over 2 years)
Banks and non-bank Interest,     •  Medium term 3%
financing commissions (over 2 years
intermediaries and discounts but not over 4
from lending years)
activities as
  •  Long Term  
well as income
Maturity
from leasing on
the basis of   ο  Over 4 years 1%
remaining but not over 7
maturities of years
instruments:
  ο  Over 7 years 0%
  •  Short term 5%
maturity (not Life Insurance Total premiums 5%
over 2 years) Companies (except collected
purely cooperative
  •  Medium term 3% companies or
maturity (over 2 associations)
years but not
Agents of foreign    
over 4 years)
insurance companies:
  •  Long term   (except reinsurance
maturity premium)
  ο  Over 4 years 1%   Total premium 10%
but not over 7 collected
years
  Total premium 5%
  ο  Over 7 years 0%
collected
  On Dividends 0%
Name: ______________________________
Proprietors, lessee or    
operator of the
following:
Cockpits Gross receipts 18%

Cabarets, Night or Gross receipts 18%

Day Clubs
Boxing exhibitions Gross receipts 10%

Professional Gross receipts 15%

basketball games
Jai-alai and race Gross receipts 30%
track (operators shall
withheld tax on
winnings)

Every stock broker Gross selling ½ of

who effected a sale, price or gross 1%
barter, exchange or value in money
other disposition of of shares of
shares of stock listed stocks sold,
and traded through bartered,
the Local Stock exchanged or
Exchange (LSE) other otherwise
than the sale by a disposed
dealer in securities
A corporate Gross selling  
issuer/stock broker, price or gross
whether domestic of value of in
foreign, engaged in money of shares
the sale, barter, of stocks sold,
exchange or other bartered,
disposition through exchanged or
Initial Public Offering otherwise
(IPO)/secondary disposed in
public offering of accordance
shares of stock in with  the
closely held proportion of
corporations stocks sold,
bartered or
exchanged or
after listing in
the stock
exchange

  •  Up to 25 % 4%
  •  Over 25% but 2%
not over 33 1/3%

  •  Over 33 1/3 % 1%

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