CPA Review School of the Philippines Manita VALUE ADDED TAX Dela Cruz /De Vera / Lopez / Liamado 1, One ofthe following statements is incorrect ‘2. 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 goods are released from custody, ‘s. Expenses incurred affer the goods are released from Customs custody are disregarded in computing the VAT on importation. 4d. When person who enjoys a tax-exemption on his importation subsequently sells in the Philippines such imported articles to 2 non-exempt person, the purchaser-non-cxempt person shall pay the VAT on such importation, 2. Which of the following input taxes can be refunded, converted ito tax credit certificates or caried ‘over to the next quarter atthe option of the VAT registered taxpayer? ‘Input tax on raw materials '. Input tax on importation of supplies © Input tax on zero-rted sales of goods and services Input tax on purchase of services 3. Value Added Tax is wan a. Indirect tax B. Direct tax ©. Local tax Personal tax 4 Statement 1- A taxpayer whose gross sales or receipts exceeded the amount of P3,000,000 shalt | ay VAT even if he is not VAT registered; consequently, he is also entitled to input taxes. Statement 2- Importer of goods for personal use isnot subject to VAT if be is not VAT Tegistered | a Both statements are true : 'b. Both statements are false ' © Only statement 1 is true Only statement 2 is rue 5. Which statement is correct? Zero rated sales are exempt from the VAT. 'b. A person whose sales or receipts do not exceed P250,000 is exempt from VAT and OPT. ©. A person who issues a VAT invoice on a VAT exempt transaction is nevertheless subject to ‘VAT on the said transaction. 4d. Entities which are exempt ftom income tax are also exempt from VAT. 6. Which ofthe following imporation is subject to VAT? 4 importation of frozen meat, importation of bamboo poles Importation of apples for personal consumption 44 Importation of grapes forsale i 7. Which of the following is subject to VAT? a Sale of smoked fish b. Sale oflechon , Sale of shells and coral products by a dealer A Sale of newspaper Tox86-138 One ofthe following is nota major business intemal revenue tax in the Tax Code a VAT b. Excise Tax © Income Tax Peroentage Tax 9. The allowrble transitional input tx is fa The lower between 23% of the value of beginning inventory or actual VAT paid on such inventory 'b. The higher between 2% of the value of beginning inventory or actual VAT paid on such inventory The actual VAT paid oa the beginning inventory 4. 2% of the valu: of beginning inventory 10, The VAT due on the sale of taxable goods, property and services by any person whether or not he has taken the necessary steps to be registered Input tax b. Output tax ©. Excise tx Sales tax 11. One of the following ts oot a transaction deemed sale: ‘a Transfer, use or consumption not in the ordinary course of business, of goods or properties originally intended for sele or for use in the course of business 1b. Distribution or transfer to shareholders or investors of goods or properties as share in the profits ofa VAT-registered person oto reditor in payrient of debt Retirement from or eestation of business, wit respec to inventories of taxable goods on hand ‘sof the date of such retirement or cessation 4. Consignment of goods if actual sale is made within 50 days “ollowing the date such goods were consigned 12. One of the following is not an activity subject to VAT a. Salein reall of goods by 2 dealer '. Sale of bamboo poles by a dealer ‘e. Sublease of rea! property in the course of business d_ Importation of ordinary feeds for poultry chicken. 13. Which ofthe foliowing is nt correct? L_Any person who is not subject 10 mandatory reistation because his actual or expected gross salesreceipts fFom non-exempt businesses forthe fast 12 months do not excoed P3,000,000, ‘may opt 10 register under the VAT system, but shall not be allowed to cancel his VAT registration forthe next thee years. IL Any person who is VA'T-egnstered but enfers into tanssctions which are exempt ftom VAT ‘may opt that the VAT apply” to his raasactions which would have been exempt but shall not be allowed to cancel his VAT registration forthe next thee yeas. TUL Franchise grantces of radio and/or television broadeasting whose annual gross receipts of the preceding year do not exceed PIOM may opt for VAT registration, but shall not be allowed to cancel is VAT registration for the next three years. only Tonly Tonly [and 1 14, Which ofthe following sales of real properties held primarily forsale to customers shall be subject to VAT? Sale of parking ot where the selling price is P1,800,000 Tex6-13 pore‘Sale of 2 adjacent residential lots in favor of one buyer from the same seller at P72S,000 per lot © Sale of 2 adjacent residential dwelings in favor of one buyer fom the same seller at 1,225,000 per residential dwelling 4. Sale to one buyer from the same seller of 2 condominium units which are combined and uilized as one residential unit where the aggregate value of the adjacent units exceeds 1,500,000. 15. ABC Restaurant recorded the following sales during the month (based on menu prices) To regular customers 560,000 ‘To senior citizen 224,000 To person with disability 112,000 ‘The output VAT is a P60,000 b. P72.000 © P69,600 4 P79.200 16. The taxpayer is a VAT registered real estate dealer: Selling Price (net of VAT) 6,000,000 Zonal Value 6,300,000 FMV, in the assessment rolls 5,800,000 Payments made by the buyer March 15, 2017 P 750,000 October 18, 2017 750,000 ‘March 15, 2018 2,250,000 October 15, 2018 2,250,000 ‘The output tax on March 15, 2017 collestion is P 90,000 756,000 283,500 P 94,500 ‘The output tax on March 15, 2018 collection is P 94,500 P270,000 | 756,000 283,500 peer peeee 17. Using the preceding number, but the FMV in the assessment roll is P6,500,000 ‘The output tax on October 15, 2017 collection is 780,000 P 90,000, P 97,500 270,000 ‘The output tax on October 15, 2018 collection is 780,000 P 135,000, 270,000 292,500 BOP poopy 18.A is engaged in to 2) lines of businesses, one with VAT and the other is Non-VAT. His records show th following (VAT not included) Sales: From VAT business 4,000,000 From Non-VAT business 6,000,000 Tax 86-13Puschases of gods fom VAT spi: Torvattoaten 2,000,000 For Noo- VAT busines 3.000.000 Purchases from VAT suppliers of supplies used for teth VAT and Now VAT eusneser 20000 Operating expenses 1,800,000 ‘The VAT payable is P.600,000 240,000 237,600 239,040 areer IL Thenet income is & P3,180,000 b. P2,840,000 & P2818,560 4. P2,820,000 19, Monthly VAT declaration is fled on or before the 2 10® day from the end of each moath b. 20! day from the end of each month © 25! day from the end of each month 4.30" day from the end of each month 20, Quartely VAT return shal be ied on or before the The 10" day from the end of each quarter . The 208 day from the end ofeach quarter ©. The 1S! day fram the end of ech quarter The 254 day from the end of ech quarter 21, Am individual taxpayer eperates a Grocery Store and is net VA‘T-segistered. His annual gross sales amounted to P2,$00,000 forthe year abhungh hs operations resulted 10 net loss far the year 2018. He is subject 10 a 3% OPT b, VAT © MCIT-2% None, because operation resulted ina loss. fhe was qualified and chose to e taxed under th 8% anconne tax ate, he shall be subject to a 3%0PT b VAT © MCIT-2% None ofthe above. 22, Which of the following iessors of residential nits islare aubjecit0 VAT? A B c D No. ofapartment units 100 2» 16 18 ‘Monthly renvamst P14,800 P15,000 Pis400 15,100 a BandD b. CandD © BCantD 4 Donly 23, A imported an article from the US. The invoice value of the imported article was $7,000 ($1 — 50). The following were incurred in relation with te imparistion Tox86.13.Insurance PIs,000 Freight 10,000 Postage 5,000 ‘Wharfage 7,000 Arrasie charges 8,000 Brokerage fee 25,000 Facilitation fee 3,000 ‘The imported article is subject to 50,000 eustom duty and P30,000 excise tax. A spent PS,600 nctusive of vat) for trucking from the customs warehouse to its warehouse in Quezon City. The ‘VAT on importation is: a. P60,600 b. P35,000 ©. P50,500 & 60,000 24, Assuming that the imported article above was sold for P600,000, VAT exclusive. The VAT 2s, payable is a P11,400 b. P12,000 & P9500 dP 9300 ‘The A Bakers sells cakes and pastry to well known hotels in the Metro Manila area. The hotels are allowed credit based on the tack record of the hotels. The sale by the store in April 2018 was 'P224,000 including the VAT. 75% of the sales are normal ‘x for the month of April 20187 a P22,000 . P20,000 © P1630 4. P24,000 ly on account. How much is the output 26. A, trader, made the following sales of goods during the month of Jui 2018, exclusive of VAT: ‘Cash Sales ‘Open Account Sales Installment Sales ‘Note: Receipt from installment sales ‘Consignment made (net of vat) June 15, 2018 May 15, 2018 ‘April 15,2018 Output taxis a P0,000 ', P34,000 ©. P60,000 4. P72;000 200,000 100,000 100,000 40,000 100,000 100,000 100,000 21. A, VAT -registered, made the following purchases during the month of January 2018 ‘Goods forsale, inclusive of VAT Supplies, exclusive of VAT Office air conditioner, total invoice amount ‘Home appliances for residence, gross of VAT Repair of store, total invoice amount evidenced ‘by ordinary receipt ofthe contractor ‘Croditable input taxes are Tex643 'P224,000 20,000 56,000 171600 4.400 |& P26,400 & P24,000 b. P29,400 4. P 32,400, 28. A taxpayer registered under the VAT system on January 1, 2018, His records during the month show: ‘Value of inventory as of Dec. 31, 2017 purchased from VAT registered persons _P 50,000 VAT paid on inventory as of Dee. 31,2017 S00, ‘Valve of inventory as of Dec. 31, 2017, VAT exempt goods 60,000 Sales, net of VAT. 140,000 Sales, goss of VAT 45,000 Purchases, net of VAT Tomo) VAT payable is a. Pii.100 bP 7221 © P 3.100 4. None of the above, 29,8 VAT taxpayer purchased the following machineries forthe second quater of 2018 (VAT not includeay Life Cost Asset ‘pei 10 4 years P 800,000 ‘Asset 2 ‘Apa 20 5 years 1,000,000 Asset 3 May 14 3yean, ‘00,000 ‘Asset May 20 2 yews 400,000 ‘Asset 5 June 10 3 years 600,000 ‘Asset Sane 35 6 years 1,200,000 ‘The input tax for April 2018 is 216,000, P4000 P 98,000, P 122,000, ‘The input tax for May 2018 is P 124,000 P 120,000 P8000 4,000 poser pegee TIL The input iax for June 2018 is a P4400 bP 8400 ©. P216,000 & P146,000 {V. The input tx forthe quarter ending June 2018 is P 126.400 P 134,400 P 136,400 P 12,400 < epee ‘On January 2022, how much unutlzed VAT may the axpayer apply against any output VAT unt itis fly uted? 8) P65,000 Tox 86-13b) 70,500 ©) P 76,800 4) None of the above, 30, The following are the data of City Appliance Marketing Corporation, forthe last quarter of 2017. Sales up to December 15, total invoice value 336,000 ‘Purchases up to December 15, net of input tax 215,000 ‘Additional information: ‘On December 16, 2017, City Appliance Marketing Corporation retied from its business and the inventory valued’ at P190,000 was taken and transferred to New City Appliance Corporation. ‘There isa deferred input tax from the third quarter of P3,500. How much is the total VAT due and payable by City Appliance Marketing Corporation in its ‘operations inthe last quarter and its retiremem from business? a P22,500 b. P3500 & P 6350 4 P 29,500 31. Assuming that New City Appliance Corporation has the following data forthe first quater of 2018: Sales, total invoice value 448,000, Purchases, total invoice value 224,000 How much is the VAT payable of New City Appliance Corporation forthe first quater of 2018? a P28,000 b. P1200 \ ©. P30,000 a P 24,000 32.A Refining Company manufactures ee! sup adhe allowipg data rng he fst quae orzo18 Sales of refined sugar, nett VAT | 2.000000 Purchases from farmers of sugar cane used in manufacture of refined sugar 500,000 Parlases of Packaging materials, us of VAT 4.000 Parchates of abel pros of VAT T2000 ‘The VAT payable is j a P124,000 b. P1I2,500 ©. P 70,000 dP 62,000 33.A, is a VAT-tegistered dealer of appliances, The following data are forthe last quarter of 2018: Sales, net of output tax 6,800,000 Purchases, net of input tax 5,500,000, Sales returns 200,000 Purchase returns 300,000 Deferred input wx 9,500 ‘The VAT payable for the last quarter of 2018 by A is a P120,500 ‘bP 70,500 © P 80,000 ‘dP 158,50034. A VAT registered person is engaged in the sale of VAT taxable goods and atthe same time is also ‘engaged in 2 non-VAT business, in the same business establishment. During the year, total sales of the VAT business amounted to P336,000, inclusive of VAT. The sales of the non-VAT business amounted to P200,000 with a separate percentage tax of P6,000 for a total of P206,000. During the same quarter, repairs on the building amounted to P50,000 plus VAT of PE,000. ‘Supplies purchased for common use amounted 1 P10,000 plus P1,200 VAT. The creditable input taxis a P6000 & P7200 & P1,000 d P4320 35. Using the above data, the VAT payable is. a P24,000 36. M, building contractor, showed to you the following data ‘Contract price, net 5,000,000 (Cash received for labor (VAT included) 3,000,000 Cash received for materials (VAT included) 360,000 Receivabies 2,000,000 900000 ‘Advances on other contacts sil unearned (wo VAT) Cash received and held in trust, tobe paid to one of his supplier, Acme Watehouse, gross of VAT 560,000 Payments: For materials, net of VAT $00,900 Fer supplies net of VAT 10,900 For services of ub-contactos (VAT incised) 1,680,000 ‘The VAT payable of M is 2 228,000 bP 348,000 «. P 350,000 4. None of the above 37. A, aVAT taxpayer billed his customer: Selling Price 500,000, Value Added Tax 30,000 Total 570,000 ‘The output tax is a. P70,000 b. P60,000 © POLO” 4 P68400 38, A PEZA-registered enterprise is paying the 5% proferentia! tax in lieu of ail other taxes. Can the same enterprise claim 2 TCC or refund from any VAT that it peys on its purchases? 48) Yes, because it should not be paying the VAT as itis exempt from all taxes whether direct or indirect. b) No. Since itis VAT-exctap, itis not allowed to claim input tax credits. €) Yes, because the issuance ofa VAT invoice to the PEZA-registered enterprise was erroneous. 4) None ofthe above. Tax86-1339. JL went out ona date with Ceil, and ber uncle, Tito Chris (senior citizen), in Mike's Bistro for CCeil's birthday. They ordered food which they all shared, andthe total bill amounted to 6,000, ‘05s of VAT. How much will Mike’s Bistro bill JL? a) PI785.71 ©) P5,428,57 b) P 357.14 4) None of the above 40. M Corporation made total sales of P200,000 to the government. Purchases of supplies directly ‘attributable to such sales amounted to P120,000, net of VAT. Unattibuted input tax allocated to ‘such sales amounted to P4,800. The goverament withheld a 1% EWTT on such purchases. ‘How much will M Corporation receive ftom the government? a) 210,000 ©) P212,000 ) 200,000 4) Nove of the above 41. In number 40, aside from the supplies of 120,000, what can M Corporation deduct in computing its twxable income? 8) 19,200 ©) P5,200 ) P1400 4) None of the above 42. In Jamuary 2018, J. Reyes started a car repair business. He did not expect his gross receipts to exceed F3.0 Million a year, and thus did not register for purposes of the VAT. He also signified in his first quarter ITR his intention to be taxed under the 8% income tax rate option. However, by ‘mid-June 2018, his receipts had already reached the amount of P3,000,050,00. ‘When should J, Reyes register for VAT, and when will he start to become liable for VAT? Will he still pay OPT under Section 116 of the Tax Code? ‘) He should register in the month thatthe gross receipts exceeded P3,000,000. He will become lable for VAT sting July 2018. He wl be fable for OPT forthe months January to ane 1 'b) He should register within 10 days after the end of June or from July 1 to July 10, 2017. He shall be lie for VAT on August , 2018. He will no longer be liable to OPT. ©) He should register within 10 days after the end of December (the last month of the 12 month ‘petiod) or from January | to 10, 2019. He shall be liable for VAT beginning on the 1" day of the month following his registration, or February 1, 2019. He will be liable for OPT from. January to December, 2018, 4) None of the above 43. A Company, VAT-registered, engsged in stockbrokerage and dealership in securities, provided the following data for the 2 quarter of 2018 ‘Commission received (net) 150,000 ‘Commission uncollected but earned 250,000 ‘Stock transactions are (VAT excluded). Price Cost A Stock 500,000 350,000 B Stock 600,000 500,000 C Stock 800,000 650,000 Al stocks were traded in the stock exchange. Tox 86-13,‘Supplies bought P88,000, VAT included 1a. The percentage tax due is b. The VAT of Ais: 44, The Bureau of Internal Revenue may use “Oplan Kandado” against the following tapayer, except? a VAT registered person who falls to isue recip. '. VAT registered person who fils to file VAT returns ©. VAT registered person who undersiates its taxable sales by 30% 4 VAT registered person who undestates is purchase by 30% 45, A 3° pany, in behalf of a borrower, transfers his VATable land to a bank in settlement of a non- performing loan of P100,000. The lind had 2 book value of ¥70,000 and a FMV of PI20,000 at the time ofthe dation in payment. The 3° party rooeived from the borrower the amount of P80,000 for ‘the dation. What ae the tx consequences ofthe dation in payment, if any? '8) The daciom or transfer shall be subject to VAT equivalent to 12% of the highest of P80,000, the zonal valve, or assessor's value; 'b) The 3" party shall be liable for income tax on his enin of P 10,000 (P80,000 - 970,000), ©) The 3" Party is liable for donor's tax onthe transfer for insufficient consideration where the insufficiency in the consideration amounts to P40,000 (P20,000 - 80,000). 4) Allof the above ax 86-13