TAXATION
VAT
VAT OUTLINE
1. Definition of the tax
2. Requisites of the tax
3. Options allowed by the VAT System to the
Seller/Manufacturer
4. Transactions covered by the VAT System
5. Exceptions to no. 4
6. Kinds of VAT
7. Rates of VAT
8. Composition of output and input tax
9. Administrative provision
The following are transactions deemed sale:
a. Transfer, use or consumption not in the course of
business of goods or properties originally intended for
sale in the course of business;
b. Distribution or transfer to shareholders or investors as
their share in the profits of the VAT- registered person;
c. Distribution or transfer to creditors in payment of debt
d. Consignment of goods if no actual sale is made with in
60 days following the date of consignment;
e. Retirement from or cessation of business, with regards
to inventories of taxable goods still unsold at that time.
The following are zero (%) rated transactions:
a. Sale of goods
(1) Export sales (2) foreign currency denominated
sales, (3) Sales to persons or entities whose
exemptions are covered by special laws or
international agreements to which the Philippines
is a signatory.
b. Sale services
(1) Processing, manufacturing or repacking of goods for
other persons doing business outside the Phil.
Which are subsequently exported, where services
are paid for in acceptable foreign currency remitted
to the Philippines in accordance with the Bangko
Sentral rules and regulations.
(2) Services other than those mentioned in the
preceding paragraph, which are paid for in
acceptable foreign currency and accounted for in
accordance with the rules and regulations.
(3) Services rendered to persons or entities whose
exemptions are covered by special laws or
international agreements to which the Philippines is
a signatory.
(4) Services rendered to vessels engaged exclusively in
international shipping.
(5) Services performed by subcontractors and/or
contractors in processing, converting or
manufacturing goods for an enterprises whose
export sales exceed 70% of total annual production.
(6) Services rendered to persons engaged in
International shipping or air transport operation.
(7) Transport of passengers and cargoes by domestic
air or sea carriers from Phil. direct to a foreign
country.
(8) Sale of power and fuel through renewable source
of energy.
Coverage of the term export sales:
1. Sale and actual shipment of goods from Phil to a
foreign country regardless of any shipping
arrangement that may affect the determination of the
transfer of ownership of the goods exported, paid for in
acceptable foreign currency or its equivalent in goods
or services and accounted for in accordance with BSP
rules and regulations;
1
ATTY. MACMOD, C.P.A.
2018 Edition
2. Sale of raw materials or packaging materials to a non-
resident buyer for delivery to a resident local export-
oriented enterprises to be used in manufacturing,
processing, packaging or repacking in the Philippines of
the said buyer’s goods and paid for in acceptable
foreign currency and accounted in accordance with BSP
rules and regulations;
3. Sale of raw materials or packaging materials to export-
oriented enterprises whose export sales exceed 70% of
total annual production;
4. Sale of gold to BSP
5. Those considered export sales under the Omnibus
Investment Code of 1987 (E.O. # 226.), and other
special laws.
6. Sale of goods/supplies, equipment and fuel to persons
engaged in international shipping or air transport from
Philippine Port direct to foreign port.
7. Sale of locally manufactured goods to OCW’s for
household and personal use paid in Foreign Currency
Foreign Currency Denominated Sale
It means sale to a nonresident of goods, except
automobiles and nonessential goods, assembled or
manufacture in the Philippines for delivery to a resident in
the Philippines and paid for in foreign currency thru
Philippine Banking system.
Effectively Zero Rated Sales
Effectively zero-rated sales of goods and properties shall
refer to the sale by a VAT-registered person to a person or
entity who was granted indirect tax exemptions under
special laws such as:
a. Sale to Asian Development Bank (ADB)
b. Sale to International Rice Research Institute (IRRI):
c. Sale to duly registered mid accredited enterprises with
Subic Bay Metropolitan Authority (SBMA);
d. Sale to duly registered and accredited enterprises with
Clark Development Authority (CDA)
e. Sale to duly registered and accredited enterprises with
Philippines Economic Zone Authority (PEZA)
The following transactions are VAT Exempt:
1. Sale only
a. Sales of their produce whether in its original state
or processed form by agricultural cooperatives duly
registered with Cooperative Development Authority
(CDA)
b. Sales by non-agricultural, non-electric cooperatives
duly registered with the CDA, provided that the
share capital contribution of each member does
not exceed P15,000.00.
c. Export sales by persons who are not VAT
Registered
d. Sale of real properties not primarily held for sale or
for lease
e. Sale of real properties utilized for low cost housing
f. Sale of real properties used for socialized housing
g. Sales of real estate dealers and/or lessors of house
and lot and other residential dwellings
h. Other sales of goods or properties where annual
sales do not exceed P3M.
2. Importation only
a. Personal and household effects belonging to
residents of the Philippines returning from abroad
or non residents citizens coming to resettle in the
Phil.
b. Professional instruments and implements
EXCEL PROFESSIONAL SERVICES, INC.

c. Wearing apparel, domestic animals and personal a. If the output tax is more than the input tax, the
household effects difference is Vat Payable (current liability).
d. Direct form inputs, machineries and equipment b. If the input tax is more than the output tax, excess
including spare parts to be used directly on and can be forwarded to the next period.
exclusively in the production by agricultural
cooperatives registered with CDA.
Input Taxes on Zero-Rated Sales of Goods or Property or
e. Machineries and equipment including spare parts
Services. The input taxes on zero-rated sales of goods or
by an electric cooperative duly registered with the
property or services, may at the option of the VAT –
CDA.
registered person be:
f. Importation of fuel, goods and supplies of persons
a. Refunded (two-year peremptory period applies), or
engaged in International Shipping or air transport.
b. Converted into tax credit certificates which may be
used in paying other NIRC taxes two-year peremptory
3. Sale or importation period applies); or
a. Agricultural and marine food products in their c. Carried over to the next quarter
original state;
b. Livestock and poultry yielding food for human
Unused Input Tax of Persons Who Retired
consumption;
Unused input taxes of persons whose registration has been
c. Breeding stock and genetic materials;
cancelled due to retirement from or cessation of business
d. Fertilizers, seeds, seedlings, and fingerlings;
may be converted into tax credit certificate which may be
e. Fish prawn, livestock and poultry feeds including
used in payment of other NIRC taxes (two-year
ingredients except specialty feeds;
peremptory period applies).
f. Books and newspapers, magazine, review or
bulletin
g. Cargo vessels and aircrafts including engine Period Within Which to Refund
equipment and spare parts for domestic or Refund or tax credit certificate shall be granted within 90
international transport operation. (150 tons and days from the date of submission of complete documents.
above)

4. Services only: Manner of Giving Refunds

a. Those subject to percentage tax under Title V Refunds shall be made upon warrants drawn by the
b. By agricultural contract growers and milling for Commissioner of Internal Revenue or by his authorized
others of palay into rice, com into grits and sugar representative without the necessity of being
cane into raw sugar; countersigned by the COA Chairman.
c. Medical, dental, hospital and veterinary services Return and Payment of VAT
d. Education services by private educational a. In General – VAT return shall be filed and the tax due
institutions accredited by DECS; CBED and those thereon be paid within 25 days following the close of
by government educational institutions. each taxable quarter.
e. Services pursuant to employer-employee b. VAT – registered persons shall be VAT on a monthly
relationship basis
f. Services rendered by multinational corporation’s c. Persons whose registration has been cancelled
regional or area headquarter in the Philippines. 1) Any person whose registration has been cancelled
shall file a return and pay the tax due thereon
5. Others: within 25 days from the date of cancellation of
a. Lease of residential units with monthly rental of registration.
P15,000 and below 2) Only one consolidated return shall be filed for the
b. Lease of residential units with monthly rental principal place of business or head office and all
exceeding P15,000 per unit but the total rental branches.
receipts do not exceed P3M d. Where to File the Return and Pay the Tax – In any one
c. Transactions exempt under special laws of the following located within the revenue district
d. Transaction exempt under Treaties, Executive or where the taxpayer is registered or required to
International Agreements register:
e. Gross receipts from lending activities to members 1) Authorized agent bank
by credits and multi-purpose cooperatives 2) Revenue Collection Officer
registered with CDA. 3) Duly Authorized
f. Printing, publication of books and any newspapers,
magazine, review or bulletin. Manner of Giving Refunds
Refunds shall be made upon warrants drawn by the
Any person, who in the course of trade or business shells, Commissioner oil Internal Revenue or by his
barters, exchanges, leases goods or properties, renders authorized representative without the necessity of
services, and any person who imports goods shall be being countersigned by the COA Chairman.
subject to VAT. Return and Payment of VAT
The phrase “in the course of trade or business” means the a. In General – VAT return shall be filed and the tax due,
regular conduct or pursuit of a commercial or an economic thereon he paid within 25 days following the close of
activity including transactions incidental thereto, by any each taxable quarter.
person regardless of whether or not the person engaged b. VAT – registered persons shall pay VAT on a monthly
thereon is a non-stock, non-profit private organizations basis.
(irrespective of how its net income is distributed and c. Persons whose registration has been cancelled
whether or not it sells exclusively to members or their 1. Any person whose registration has been cancelled
guest), or government entity. shall file a return and pay the tax due thereon
within 25 days from the date of cancellation of
Excess Output or Input Taxes registration.

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2. Only one consolidated return shall be filed for the a. In General

principal place of business or head office and all Total Value for tariff and
branches. customs duties xxx
d. Where to File the Return and Pay the Tax – in any of Add: Customs duties
the following located within the revenue district where Excise tax xxx
the taxpayer is registered or required to register: Other charges prior to release of
1. Authorized agent bank Goods from Customs custody xxx xxx
2. Revenue Collection Officer Tax base xxx
3. Duly authorized city or municipal Treasurer Tax rate 12%
VAT on importation xxx
Withholding of Creditable VAT
a. Who are required to withhold? The Government or any 3. Payment of VAT on importation is paid before the
of its political subdivisions, instrumentalities or imported goods are released from Bureau of Customs.
agencies, including government-owned or controlled 4. Examples of Charges or Fees Prior to Release of Goods
corporations. from Bureau of Customs
1. Goods or services (purchased) – 5% of gross a. Insurance h. Arrastre charge
payments b. Freight i. Brokerage fees
2. Services rendered in the Philippines rendered by c. Postage j. Stamps
non-residents – 10% d. Commission k. Processing fees
b. What is done with the VAT withheld? e. Interest l. Customs duties
1. Buyer (withholding agent) – Remit within 10 days f. Bank charges m. Excise tax
following the end of the month the withholding was g. Wharfage due
made.
2. Seller – Deducted from VAT payable.
5. Transfer of Goods by Tax – Exempt Persons, Entities,
or Agencies
1. VAT – On Importation
Every importation of goods shall be subject to VAT
When person, entity, or agency who enjoys tax –
whether:
exemption on his importation subsequently sells,
a. For sale or for use as raw materials in the
transfers or exchanges in the Philippines such imported
manufacture of goods to be sold;
articles to non-export persons or entities, the
b. For use in business; or
purchasers, transferees, or recipients of the tax
c. For personal use.
exempt importation shall be required to pay the
internal tax on such importation.
2. Tax base and rate

EXERCISES/PROBLEMS
A- identify whether the following are subject to Vat (T) or not subject to Vat (NT)
1. Sale of lechon manok (roasted chicken)
2. Sale of coconut.
3. Sale of smoked fish (tinapa).
4. Sale of boneless bangus.
5. Importation of grapes for sale.
6. Importation of frozen meat for sale.
7. Sale of shells and coral products by a dealer.
8. Export sale by a VAT-registered person.
9. Export sale by persons who are not VAT-registered.
10. Lease of residential units with a monthly rental of P20,
000 per unit but with an aggregate annual gross rentals of
P2M
11. Lease of residential units with a monthly rental of P20,
000 per unit but with an aggregate annual gross rentals of
P4M
12. Lease of commercial units with a monthly rental of P10,
000 per unit but with an aggregate annual gross rentals of
P4M.
13. Tuition fees of a private university.
14. Tuition fees of a review school.
15. Sale of books by bookstore
16. Importation of machineries and equipment
17. Sale of drugs and medicine in a hospitals pharmacy
18. Paintings sold by art gallery
19. Importation of bamboo poles
20. Importation of special feeds for race horses
21. Professional fees of CPA’s/Lawyers
22. Income earned by Banks
23. Hospital services
24. Pawnshops
25. Sales of newspapers
26. Sales of deboned meat
27. Sale of salted egg
28. Keeper of garage owner/operator
29. Parking lot operator
30. Massage Parlors
B. Multiple Choice: Chose the best possible answer.
1. Being business taxes, all of the following are indirect taxes
except:
a. Value-added tax c. Income tax
b. Excise tax on certain goods. D. Percentage tax
2. The value added tax due on the sale of taxable goods,
property and services by any personwhether or not he has
taken the necessary steps to be registered.
a. Input tax c. Excise tax
b. Output tax d. Sales tax
3. First statement- Nonstock and nonprofit private
organizations which sell exclusively to their members in
the regular conduct or pursuit of commercial or economic
activity are exempt from value-added tax.
Second statement- 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 state statement is correct.
4. Gross selling price includes all of the following except one.
Which one?
a. Total amount which the purchaser pays to the seller.
b. Total amount which the purchaser is obligated to pay
to the seller.
c. Excise tax.
d. Value-added tax.
5. First statement: if the tax is billed separately in the
inventory, the VAT shall be determined by multiplying the
gross selling price including the amount intended to cover
the tax by the factor 12/112

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Second statement: If the tax is billed erroneously, the
VAT shall be determined by multiplying the gross selling
price including the tax billed erroneously by the factor
12/112.
a. Both statements are correct.
b. Both statements are incorrect.
c. Only the first statement is correct.
d. Only the second state statement is correct.
6. The value added tax on the installment sale of real
property is:
a. The higher between the selling price stated in the
sales
b. Selling price stated in the sales document
c. Installment received plus interest and other charges
d. Gross receipts.
7. The following are zero-rated, if paid for in acceptable
foreign currency payout ratio its equivalent and accounted
for in accordance with the rules and regulations of the
Bangko Sentral ng Pilipinas except one:
a. Sale and actual shipment of goods from the
Philippines to a foreign
b. Sale of raw materials or packaging materials to a non-
resident buyer for delivery to a resident local export-
oriented enterprise.
c. Sale to a non-resident of goods assembled or
manufactured in the Philippines for delivery to a
resident in the Philippines.
d. Sale of real property to a nonresident person for
delivery to a resident in the Philippines.
8. One of the following is not an export sale.
a. Sale to bonded manufacturing warehouse of export-
oriented manufacturers and to export processing
zones.
b. Sale to foreign military bases, diplomatic missions or
agencies and/or instrumentalities granted tax
immunities, of locally manufactured assembled or
repacked products whether paid for in foreign
currency or not.
c. Sale of gold to Bangko Sentral ng Pilipinas.
d. Exportation of goods on consignment.
9. Which is not a requisite of “foreign currency denominated
sales”?
a. The sales exceed an aggregate foreign exchange
value of $US1, 000.
b. The buyers are Filipinos abroad, returning overseas
Filipino or other nonresidents of the Philippines.
c. The goods are paid for in convertible foreign currency
inwardly remitted through the banking system in the
Philippines.
d. The goods are assembled or made in the Philippines
for household or personal use.
10. One of the following is not a transaction deemed sale:
a. Transfer, 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.
b. Distribution or transfer to shareholders or investors of
goods or properties as share in the profits of a VAT-
registered person or creditors in payment of debt.
c. Retirement from or cessation from business with
respect to all goods on hand as of the date of such
retirement or cessation.
d. Consignment of goods if actual sale is made within 60
days following the date such goods were consigned.
11. Tax credit for input taxes shall be allowed if:
a. Both the seller and the purchaser are VAT-registered
b. Either one of the seller or the purchaser is VAT-
registered.
c. Neither one of the seller or the purchaser is VAT-
registered as long as VAT invoice is issued.
d. The seller is VAT-registered regardless of whether the
purchaser is VAT-registered or not.
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12. The allowable transitional input tax is:
a. The lower between 2% of the value of beginning
inventory or actual VAT paid on such inventory.
b. The higher between 2% of the value beginning
inventory or actual VAT paid on such inventory.
c. The actual VAT paid on the beginning inventory.
d. 2% of the value of beginning inventory.
13. All of the following are allowed presumptive input tax,
except for one.
a. Processor of sardines, mackerel and milk.
b. Manufacturer of refined sugar and cooking oil.
c. Producers/manufacturers of packed noodles.
d. Supplier of books and other school supplies.
14. Which of the following input taxes can be refunded,
converted into tax credit certificates or carried over to the
next quarter at the option of the VAT-registered taxpayer?
a. Input tax on purchase of capital goods.
b. Input tax on importation of supplies
c. Input tax on zero-rated sales of goods or services.
d. Input tax on purchase of real properties.
15. First statement: Unused input tax of persons whose
registration had been cancelled may be converted into tax
credit certificate which may be used in payment of other
NIRC taxes.
Second statement: Refund or tax credit certificate shall be
granted within 25 days from the date of submission of
compete documents.
a. Both statements are correct.
b. Both statements are incorrect.
c. Only the first statement is correct.
d. Only the second state statement is correct.
16. Monthly VAT declaration is filed on or before the:
a. 10th day from the end of each month.
b. 20th day from the end of each month.
c. 25th day from the end of each month.
d. 30th day from the end of each month.
17. First statement: VAT taxpayers including corporations use
calendar quarters for VAT purposes.
Second statement: Withholding of VAT is done only when
the buyer is the Government or any of its political
subdivisions.
a. Both statements are correct.
b. Both statements are incorrect.
c. Only the first statement is correct.
d. Only the second state statement is correct.
18. The withholding of VAT on the sale of services is:
a. 5% of gross payments c. 6% of gross receipts
b. 6% of gross sales d. 8.5% of gross receipts
19. Value added tax as to subject matter is:
a. Indirect tax c. Local tax
b. Direct tax d. Transaction tax
20. First statement: A taxpayer whose gross sales or receipts
exceeded the amount of P3M shall pay VAT even if he is
not VAT-registered. He is also entitled to input taxes.
Second statement: Importers of goods for personal use is
not subject to value-added tax if he is not VAT-registered.
a. Both statements are correct.
b. Both statements are incorrect.
c. Only the first statement is correct.
d. Only the second state statement is correct.
21. 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 importation is paid to the Bureau of Customs
before the imported goods are released from its
custody.
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c. Expenses incurred after the goods are released from Supplies, exclusive of VAT 20,000
Customs custody are disregarded in computing VAT Office air conditioners, total invoice
on importation. amount 56,000
d. When a person who enjoys tax-exemption on his Home appliances for residence, gross
importation subsequently sells in the Philippines such of VAT
imported articles to non-exempts person, the 17,920
purchaser-non-exempt person shall pay the VAT on Office machine, 8 years useful life, 2,000,000
such importation. net of VAT

22. Alira imported a car from USA for her personal use. Total Repair of store amounted to P20,000 evidenced by
landed cost is P250,000 excluding custom duties of ordinary receipt of contractor
P50,000. VAT on importation is: Creditable Input taxes are:
a. P30, 000 c. P36, 000 a. P38,800 c. P37,440
b. P25, 000 d. P20,000 b. P34,800 d. P35,520

23. An importer wishes to withdraw its importation from the 29. A taxpayer registered under the VAT system on January 1,
Bureau of Customs. The imported goods were subjected 200B. His records during the month show:
to 10% customs duty in the amount of P24,000 and other Value of inventory as of December 31, 200A
customs charges in the amount of P10,000. The value- purchase from VAT-registered persons P100,000
added tax due is: VAT paid on inventory as of December 31,
a. P24,000 c. P32,880 200A 5,000
b. P25,200 d. P20,000 Value of inventory as of December 31,
200A purchased, from non-VAT persons 200,000
24. VIVA Corp. imported an article from Japan. The invoice Sales, net of VAT 140,000
value of the imported articles was $7, 000 ($1- P50). The Sales, gross of VAT 45,920
following are incurred in connection with the importation: Purchases, net of VAT 70,000
Insurance P 15,000 Purchases of VAT exempt goods 50,000
Freight 10,000
Postage 5,000 VAT payable is:
Wharfage 7,000 a. P8,320 c. P 7,320
Arrastre charges 8,000 b. P13,320 d. P13,400
Brokerage fee 25,000
Facilitation fee 3,000 30. The following are the data of City Appliances Marketing
Co. for the last quarter of CY:
The imported article was subjected to P50,000 customs Sales up to December 15, total
duty and P30, 000 excise tax. invoice value P380,800
Purchases up to December 15, net
VIVA Corp. spent P5, 000 for trucking from the customs of input taxes 150,000
warehouse on its warehouse in Quezon City.
Additional information:
The VAT on importation is:
On December 16, CY, the City Appliances Marketing Co.
a. P60,000 c. P60,600
retired from its business and the inventory valued at
b. P42,000 d. P80,000
P190,000 was taken and transferred to New City
Appliances Co. There is a deferred input tax from the third
25. Assuming that the imported article in no.24 was sold for
quarter of P3,500.
P800,000. VAT exclusive, the VAT payable is:
a. P24,000 c. P36,000
How much is the total value-added taxes due and payable
b. P12,000 d. P11,040
by City Appliances Marketing Co. in its operations in the
last quarter and its retirement from business?
26. The Manila BAKERS sells cakes and pastry items to well
a. P42,100 c. P22,800
known hotels around the Metro Manila area. The hotels
b. P21,500 d. P19,300
are allowed credit based on the track record of the hotels.
The total sale by the store in April of CY was P224, 000,
31. Continuing no. 30, assuming that one New City Appliances
including the value-added tax. 75% of the sales are
Co. has the following data for the first quarter of CY.
normally on account.
Sales, total invoice value P336,000
How much is the output tax for the month of April CY?
Purchases, total invoice value 24,640
a. P 6,000 c. P22,400
b. P24,000 d. P18,000
How much is the VAT payable of the New City Appliances
Co. for the first quarter of 2013?
27. Marishka, a trader, made the following sales of goods
a. P28,000 c. P33,360
during the month of July CY, exclusive of VAT:
b. P10,560 d. P30,800
Cash sales P 200,000
Open account sales 100,000
32. Violet Corp. is a VAT-registered dealer of appliances. The
Installment sales 100,000
following data are for the last quarter of CY:
Note: Receipt from installment sales
Sales, total invoice value P6,920,000
is P40, 000
Purchases, net of input taxes 5,500,000
Consignment made: (net of VAT)
Sales return 200,000
June 15 CY 100,000 Purchase return 300,000
April 15 CY 100,000 Deferred input taxes (carried over from the
March 15 CY 100,000 third quarter of 2012) 12,000

Output tax is:

The value added tax payable for the last quarter of CY by
a. P60,000 c. P72,000
Violet Corp. is:
b. P40,800 d. P64,800
a. P84,000 c. P108,000
b. P96,000 d. P130,500
28. J. Shaggy VAT-registered, made the following purchases
during the month of January, 200A:
Goods for sale, inclusive of VAT P 246,400

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33. During a quarter, Popocute Corp. made sales of goods

amounting to P1,000,000 plus output tax of P120,000 for 39. Using the data in no. 38, the VAT payable is:
a total of P1,120,000. It also made sales of services a. P24,000 c. P31,680
amounting to P200,000 plus output tax of P24,000 for a b. P25,000 d. P26,400
total of P224,000.
40. Sweetie Pie Refining Company manufactures refined
During the same quarter, it made domestic purchases of sugar. It had the following data during the first quarter of
P1,000,000 for goods for sale plus input tax of P120,000. CY:
It also hired the services of an independent contractor to Sale of refined sugar, net of VAT P2,000,000
repair the building used for both lines of activities for Purchases of sugar cane from farmers
which it paid the amount of P50,000 plus P6,000 VAT. Its used in the manufacture of refined
deferred input tax is P215,000 for which P200,000 is a sugar 500,000
carry over input tax for a previous zero rated transaction. Purchase of packaging materials,
gross of VAT 784,000
Popocute received a credit memorandum for purchases Purchase of labels, gross of VAT 112,000
returned during the quarter covering purchases made in
the previous quarter amounting to P336,000, P36,000 of The VAT payable is:
which adjustment to input tax. It also filed a claim for a. P124,000 c. P144,000
refund of P200,000 input tax on zero rated transaction. b. P112,500 d. P 62,000
How much is Popocute’s net creditable input tax?
a. P5,000 c. P126,000 41. A VAT-registered supplier sold goods amounting to
b. P105,000 d. P215,000 P500,000 to a government-controlled corporation during a
particular quarter. Which of the following statements is
34. In question no. 33, how much is the VAT payable or incorrect in relation to the sale in relation to the sale of
excess tax credit? goods?
a. P39,000 c. P126,000 a. The sale is subject to creditable withholding VAT.
b. P108,000 d. P221,000 b. The government-controlled corporation will withhold
P25,000 withholding VAT.
35. Assuming the same facts in question 34, except that the c. The government-controlled corporation shall remit the
company has not filed a claim for refund during the period withholding of VAT to the BIR within 10 days following
for input tax on previous purchases of capital goods, how the end of the month the withholding was made.
much is Popocute’s VAT due or excess input tax? d. The VAT-registered supplier may refuse the
a. P305,000 c. P136,000 excess IT withholding of VAT as long as it is willing to pay the
b. P300,000 d. P161,000 excess IT full 12% VAT.

36. Avenger Realty, the course of trade sells real property. 42. On January 5, CY, Laylu Co., VAT-registered, sold on
During the month of January CY, it had the following data account goods for P112,000 to Vinmar Corp. The term
per sales document (VAT included): was: 2/10, n/30. Payment was made on January 10,
200A. The total amount due is:
Cash sales P560,000 a. P110,000 c. P108,000
Sale on deferred payment basis b. P107,800 d. P109,760
(initial payments Exceed 25%
of the selling price) 336,000 43. JOANNE Corp. a VAT manufacture submitted the following
The real property sold for cash had a zonal value of data for the last month of CY: (All figures are at total
P600,000 (excluding VAT) and the property sold under invoice value)
deferred payment basis had a fair market value of Material purchases P295,568
P200,000 (excluding VAT). Purchase returns 19,600
Sales, local 362,880
How much is the output on the sale of real property? Sales returns, local 30,240
a. P86,000 c. P96,000 Foreign currency denominated sales 170,000
b. P 88,000 d. P108,000 Purchase from BOI registered
enterprises 33,264
37. Tarantula Realty Corp. sells real property in the course of
its business. During the month of April CY, it had sold a The VAT payable is:
lot under the following terms (including VAT): a. P22,680 c. P2,508
b. P25,920 d. P3,564
Total contract price P1,120,000
Downpayment, 4-10-CY 112,000 44. Mr. Boy Hilo is a manufacturer of beer. During a particular
First installment, 4-30-CY 112,000 quarter, it had the following transactions (net of VAT):
January 4, CY: Consigned beer to a retailer in Quezon City
The output VAT in April CY is: amounting to P200,000.
a. P12,000 c. P30,000 February 14, CY: Exported P1,000,000 worth of beer to
b. P24,000 d. P0 Japan.
February 27, CY: President of Agua Pataranta celebrated
38. A VAT- registered person is engaged in the sale of VAT his birthday, consuming P50,000 worth of beer given
taxable goods and at the same time is also engaged in to him by the company as a birthday gift.
non-VAT business, in the same business establishment. March 20, CY Declared property dividend of one case of
During the quarter it made P300,000 sale pus value- beer for every 10 shares, amounting to P150,000.
added tax of P36,000. The sales of the non-VAT business
amounted to P200,000 with a separate percentage tax of Additional information: From January to March, domestic
P6,000 for a total of P206,000. During the same quarter, sales to wholesalers amounted to P600,000. No beer was
repairs on the building amounted to P50,000 plus value returned by the consignee until the end of the quarter.
tax of P6,000. Supplies purchased for common use
amounted to P10,000 value-added tax of P1,200. The output tax for the quarter is:
The creditable input tax is: a. P72,000 c. P120,000
a. P7,200 c. P4,320 b. P192,000 d. P60,000
b. P6,000 d. P3,600

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EXCEL PROFESSIONAL SERVICES, INC.

45. MMM, building contractor showed to you the following Purchase of equipment used in the
data: manufacture of goods for export and
domestic sale, VAT exclusive 300,000
Contract Price P5,000,000
Cash received (VAT included) 2,240,000 The amount of input tax which can be refunded or
Receivables 3,000,000 converted into tax credit certificates at the option of the
Advances on other contacts still VAT-registered person is:
unearned (w/o VAT) 1,000,000 a. P120,000 c. P39,600
Payments: (VAT excluded) b. P118,800 d. P50,000
For materials 500,000
For supplies 100,000 49. Based on #48, if the refundable input taxes were not
For operating expenses 200,000 refunded but used as tax credit, the VAT due is:
For services of sub-contractors a. P576,000 c. P666,888
(VAT included) 1,848,000 b. P697,888 d. P570,000

Required: Compute the value added tax payable. 50. But assuming further that the taxpayer opted to claim
them as refund, the VAT due is:
46. The MINDY Inc., a manufacturer had the following data a. P576,000 c. P746,888
for the first month of CY: (First year as VAT Registered b. P697,888 d. P620,000
Person)
Sales: 51. One of the following is not an activity subject to VAT:
Exports P2,000,000 a. Sale in retail of goods by a dealer
Domestics (Without VAT) 1,000,000 b. Sale of Bamboo poles by a dealer
Purchases, excluding VAT: c. Sublease of real property in the course of business
Raw Materials 300,000 d. Importation of ordinary feeds for poultry chicken
Services 100,000
Machinery (estimated useful life 2 years) 400,000 52. Taxpayer operates a Grocery Store and is not VAT
On January 1, CY, the company had inventories and taxes Registered. His annual gross sales amounted to
paid thereon as follows: P4,000,000 for the year although his operations resulted
Cost VAT Paid to net loss, for the year 2015. He is subject to:
Raw Materials P120,000 P2,000 a. 3% OPT
Supplies 40,000 4,000 b. VAT
c. Minimum Corporate income tax of 2%
Raw materials were purchased from another enterprise d. None because operations resulted to net loss
with a total cost of P61,600, not included above.
53. XYZ Corp. a contractor provided the ff. data:
The VAT payable by the company is: Advances from project A P550,000
a. P72,000 c. P9,000 Receivables from project B P1M
b. P57,000 d. P11,000 Cash receipts from project C
(net P100,000 retention cost) 900,000
47. Gener, a VAT registered grocery and sugar dealer Creditable input VAT 84,000
submitted the following data of Dec. 31, 2017 to the Refundable input VAT 12,000
Revenue District Officer: (newly VAT Registered)
Above figures are net of VAT.
Grocery items, Vat paid P,5000 P350,000 The output tax is:
Raw sugar cane, total value 150,000 a. P186,000 c. P300,000
b. P180,000 d. P140,000
During the first month of CY, he had the following sales
and purchases: 54. The VAT due if all input taxes were used as tax credit is:
a. P90,000 c. P170,000
Sales Purchases b. P84,000 d. P96,000
Grocery, total invoice value P1,195,040 P708,400
Raw sugar cane, 55. BBL Imported ff: data
(Excluding VAT) 570,000 320,000 Imported goods ?
Customs duties paid P24,000.00
The VAT payable for the first month is: (10% of the value of imported goods)
a. P29,400 c. P45,140 Other Customs charges 20,000.00
b. P47,400 d. P36,500 Excise Tax, 5% of Invoice amount ?
The imported goods were later sold for P800,000.00
48. A VAT-registered person has the following data: without VAT.
Export sales, total invoice amount P3,000,000 How much is the VAT on importation?
Domestic sales, total invoice amount 6,720,000 a. P35,520 c. P24,000
Purchase of raw materials, used to b. P35,000 d. P25,200
manufacture Goods for export and
domestic sales, VAT inclusive 616,000 56. The VAT due is:
Supplies used for both export and a. P60,480 c. P54,000
domestic sales, VAT inclusive 448,000 b. P61,000 d. P66,000

If you think, you can or you cannot, you are right. H. Ford

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