CHAPTER 1 True or False 1. True 2. True 3. True 4. True 5. False 6.

False (business tax, a form of

consumption tax) 7. True 8. True 9. False (only domestic consumption) 10. False (country of destination)
11. True (the tax is imposed upon the buyer) 12. False (tax applies only on domestic consumption) 13.
False (sale abroad is a foreign consumption) 14. False (subject to tax to the buyer) 15. True (particularly
business tax) 16. True 17. True 18. False (the former is a broader concept) 19. False (it is payable by all
who imports) 20. True 21. True 22. True 23. True (statutory taxpayer = seller, economic taxpayer =
buyer) 24. True 25. True Multiple Choice – Theory: Part 1 1. C 2. A 3. D 4. C 5. A 6. A 7. C 8. D 9. C 10. A
11. B 12. A 13. C 14. B 15. A 16. B 17. D 18. C 2

BUSINESS & TRANSFER TAX MANUAL 19. B 20. A

Multiple Choices – Theory: Part 2 1. A 2. D 3. A 4. C 5. B 6. B 7. C 8. A 9. A 10. C 11. D 12. C 13. B 14. B 15.
C 16. B 17. A 18. C 19. B 20. A Multiple Choice – Problem Part 1 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 14. 15.

D B A D D C A, (P77,600 x 125%0 ÷ 97%) = P100,000 A, (P30,000 + P10,000) ÷ 97% = P41,237 B A C,

(P206,000 x 3%) = P6,180 C, (P200,000 sales – P120,000 purchase) not (P200,000 sales – P140,000 cost
of sales) 13. A C, the VAT on importation is impose upon purchase D, (P300,000 + P1,200,000)

Multiple Choice – Problem Part 2 1. C, (P200,000 importation + P150,000 domestic sales) Note: The
domestic purchase is taxable to the seller. Export sales are not subject to consumption tax.

2. D, Only the importation is subject to consumption tax since consumption tax on sales (Business tax)
applies only to sellers regularly engaged in business. 3. B, P300,000 x 12% = P36,000 4. C, P200,000 x
12% = P24,000 5. C, P36,000 – P24,000 6. B, P 300,000 x 3% = P9,000 3

BUSINESS & TRANSFER TAX MANUAL 7. 8. 9. 10.

C, P300,000 Philippine sales x 12% = P36,000 B, P100,000 purchase from abroad x 12% = P12,000 C,
P300,000 Philippine sales x 3% = P9,000 C, same in