CHAPTER 2- VALUE ADDED TAX ON IMPORTATION

Multiple Choice: Theory- Agricultural or marine food products: Part 1

1.  Which agricultural product is VAT exempt on importation?

a.  Charcoal

 b.  Wood

c.  Lumber

d.  Corn

2. Which importation is subject to VAT?

a.  Importation from abroad.

 b.  Purchase of goods from economic zones in the Philippines

c.  Both A and B

d.   Neither A nor B

3. Which is not subject to VAT on importation?

a.  Importation of goods for personal use.

 b.  Importation of goods fro business use.

c.  Purchase of goods from Ecozone entities.

d.  Purchase of goods from other domestic sellers.

4. Which of the following is subject to VAT on importation when imported?

a.  Books

 b.  Table sugar

c.  Mushroom

d.  Ordinary salt

5. Which is non-food agricultural product is exempt from VAT on importation?

a.  Chicken manure

 b.  Eggs

c.  Live hogs

 

d.  Cattle

6. Which of the following is not exempt from VAT?

a.  Grapes

 b.  Orange

c.  Orchids

d.  Kiwi fruit

7. Which seeding is vatable?

a.  Grafted mango seedlings

 b.  Pomelo seedlings

c.   Narra seedlings

d.  Guava seedlings

8. Which agricultural produce is exempt from VAT?

a.  Rubber hem

 b.  Abaca hem

c.  Copra

d.  Firewood

9. Which is vatable?

a.  Bamboo shoots

 
 b. Banana hearts
c.  Banana fruits

d.  Bamboo poles

10. Which is VAT exempt?

a.  Cotton soft wood

 b.  Cotton seeds

c.  Cotton wool

d.   None of these

 

11. Which is taxable to value added tax?

a.  Sheep

 b.  Sheep wool

c.  Cut sheep meat

d.  All of these

12. Which is VAT exempt?

a.  Coconut lumber

 b.  Coconut broom sticks

c.  Coconut shells

d.  Coconut meat

13. Which is subject to VAT on importation?

a.  Wheat
 b.  Coffee bean

c.  Barley

d.  Cocoa

14. Which agricultural product is subject to VAT?

a.  Honey

 b.  Rattan cane

 
c. Sugar cane
d.  Sugar beets

15. Which is subject to VAT on importation?

a.  Cocoon silk

 b.  Pineapple silk

c.  Furniture

d.  All of these

16. Seedlings of this tree are exempt form VAT on importation?

 

a.  Rubber tree

 b.  Paper tree

c.  Palm oil tree

d.  Mahogany tree

17. The importation of which of the following is subject to VAT?

a.  Rubber

 b.  Corn

c.  Cacao

d.  Peanut

18. Feeds of the following animals are considered as specialty feeds, except for

a.  Zoo animals

 b.  Aquarium fish

c.  Livestock

d.  Fighting cocks

19. Which of the seeds is non-VAT exempt?

a.  Corn seeds

 b.  Mustard seeds

c.  Flower seeds

 
d. Cabbage seeds
20. Which of the following feeds is subject to VAT on importation?

a.  Formulated horse feeds

 b.  Corn grits

c.  Swine feeds

d.  Broiler feeds

 

Multiple Choice: Theory- Agricultural or marine food products: Part 2  

1.  Which is VAT exempt?

a.  Peacock feathers

 b.  Eggs

c.  Hamster

d.  Leather

2. Which is vatable on importation?

a.  Tea leaves

 b.  Tobacco leaves

c.  Cayenne pepper

d.  Chinese cabbage

3. Which of these is VAT exempt on importation?

a.  Almonds

 b.  Blueberries

c.  Ginseng roots

d.  All of these

4. Which is not exempt from VAT?

a.  Sunflower seeds

 
 b. Bees wax
c.  Peanut

d.   None of these

5. Which is not generally considered as pet under the regulation?

a.  Rabbit

 b.  Zoo animals

c.  Race horse

d.  Fighting cocks

 

6. Which of these is non-vatable?

a.  Love birds

 b.  Parrots

c.  Goldfish

d.  Milkfish

7. Which is not a VAT-exempt poultry?

a.  Ducks

 b.  Geese

c.  Turkeys

d.  Gamefoul roosters

8. Which of theses animals

a nimals is vatable when imported?

a.  Cow
 b.  Rabbit

c.  Goat

d.  Race horse

9. Which is a vatable agricultural input?

a.  Fertilizer

 b.  Pesticides

 
c. Seeds
d.  Seedlings

10. The following are generally considered as pets hence vatable when imported except for

a.  Janitor fish

 b.  Goldfish

c.  Catfish

d.  Koi fish

11. Which of these is taxable with VAT on importation?

 

a.  Yellowfin tuna

 b.  Pink salmon

c.  Blue marlin

d.  Butterfly fish

12. Which of the following seafood is considered as vegetable; hence, VAT-exempt?

a.  Kelp

 b.  Sea lettuce

c.  Sea grapes

d.  All of these

13. Which of these is vatable?

a.  Sea shells

 b.  Octopus
c.  Squid

d.  Shrimps

14. Examples of mollusk and shellfish:

A.  Crabs B. Oysters C. Lobsters D. Clams

Which of these is subject to VAT

V AT on importation?

a.  A and D

 
 b. B and C
c.  All of these

d.   None of these

15. Which of these agricultural

a gricultural products is not considered as in its original state?

a.  Kopra

 b.  Muscovado sugar

c.  Refined sugar

d.  Ordinary salt

 

16. By revenue regulation, which of the items below is not considered original state?

a.  Marinated fish

 b.  Dried fish

c.  Frozen meat

d.  Smoked fish

17. Which product is non-taxable with VAT on importation?

a.  Fresh cow milk

 b.  Olive oil

c.  Butter

d.  Parmesan cheese

18. Which of the items below is taxable with VAT?

a.  Shrink-wrapped meat

 b.  Vacuum-packed vegetables

c.  Tetra-packed fresh fruit juice

d.  Canned fruits

19. Which is not considered as simple processing?

a.  Freezing

 b.  Stripping

 
c. Broiling
d.  Marinating

20. The following advanced technological means of packaging is deemed not to alter the nature of an
agricultural marine food products being in original state. Which is the exception?

a.  Canning

 b.  Vacuum-packing

c.  Plastic shrink wrapping

d.  Tetra-packing

e xempt importation 
Multiple Choice: Theory- Other exempt
 

1.  Which is not exempt from VAT on importation?

a.  Importation of books

 b.  Importation of school supplies

c.  Importation of magazines

d.  All of these

2. Which importation
importation is not VAT-exempt?
VAT-exempt?

a.  Importation of personal and household effects of residents coming to resettle

r esettle in the
Philippines

 b.  Importation of personal and household effects of foreigners coming to settle

 permanently in the Philippines
Philippines

c.  Importation of personal

personal and household effects which are subject to custom
custom duties

d.  All of these

3. The importation of professional instruments and implements may be subject to VAT when the

a.  Volume is not in commercial quantity.

 b.  Goods accompany the person or arrive within 30 days before and after his arrival.

c.  Importation involves vehicles and machineries.

d.  All of these

4. Which importation
importation is exempt from VAT?

a.  Importation of books by a school

 b.  Importation of books by a student

c.  Importation of books by a bookstore

d.  All of these

5. The importation of which

which transport medium is exempt
exempt from VAT?

a.  Sea

 b.  Air

 
c. Land
 

d.  A and B

6. Examples of
of Transport vehicles:

a.  Bus

 b.  Cars

c.  Vessels

d.  Aircraft

Which of these is not exempt from VAT when imported?

a.  C and D

 b.  A and B

c.  All of these

d.   None of these

7. Which importer is exempt from VAT in importation of fuel, goods and supplies?
a.  Domestic carriers

 b.  International carriers

c.  Domestic carriers on their international operations

d.  Either B and C

8. Which of the following items is subject to VAT on importation to an individual who is intending to
settle in the Philippines?

a.  Vehicles

 b.  Professional instruments

c.  Household effects

d.  Personal effects

9. The importation of fuel, goods

goods and supplies is not exempt
exempt from VAT when used in

a.  Domestic operation

 b.  International shipping operations

c.  Household effects

d.  Personal effects

 

10. Which is vatable?

a.  Importation of life saving equipment

 b.  Importation of safety or rescue

rescue equipment
equipment

c.  International transport operations

d.  Any of these

11. The importation of vessel or aircraft for domestic operations is

a.  Vatable.

 b.  Always VAT exempt.

c.  VAT exempt if the importer complies with maximum service life set by law.

d.  Vatable if the importer complies with maximum sevice life set by law.

12. The importation of fuels, goods and supplies for domestic shipping or air transport operation is
a.  Vatable.

 b.  Always VAT exempt.

c.  Vatable if the importer is a domestic carrier.

d.  Exempt if the importer is a domestic carrier.

13. The importation of farm machineries and equipment is exempt when imported by

 
a. A member of the cooperative
 b.  A trader engaged in business.

c.  An agricultural cooperative

cooperative..

d.  A or C

14. Who has the burden of proving exemption from VAT on importation?

a.  The government

 b.  The importer-buyer

c.  The seller

 

d.  Both A and C

15. Which is a qualified exempt importation?

a.  Importation of a cooperative of farm

far m equipment

 b.  Importation by a cooperative of rice

c.  Importation of books

d.  Importation of
of marine food products

16. Which is not a qualified exempt importation?

a.  Importation of fuels or supplies by a person engaged in domestic transport operations

 b.  Importation of fuels or supplies by an international carrier

c.  Importation of cargo vessels and aircraft by those engaged in international transport
operations

17. Which of these is non-vatable?

a.  Purchase of services from a foreign service provider who is not engaged in business

 b.  Purchase of goods from a foreign service provider who is engaged in business abroad

c.  Purchase of goods from economic zone enterprises

d.   None of these

18. Who shall pay the VAT on importation when a VAT on importation
importation when a VAT-exempt entity
subsequently sells an imported article or goods to a non-exempt entity?

a.  The exempt buyer

 b.  The non-exempt buyer

c.  Both A and C

d.   Neither A nor C

19. Importation is not subject to VAT when

a.  Made by a VAT-registered business

 b.  Made by a non-VAT-registered business

c.  It involves exempt goods

d.  Coursed through an exempt importer

 

20. Which is not included in landed cost?

a.  Dutiable value

 b.  Custom's duty

c.  Excise tax

d.  VAT

21. Which is not included in the landed cost?

a.  Purchase price

 b.  All incident cost of bringing the goods to the customs warehouse

c.  Taxes other than VAT paid prior to the withdrawal of the goods

d.  Cost of transporting the goods from customs warehouse the importer's warehouse or
residence

Multiple Choice- Problem 1 

1.  Oceanizers, Inc. Purchased the following from abroad:

Sea shells and coral decors P320,000

Tuna and salmon P120,000

Total P440,000

What is amount of taxable importation?

a.  P0

 b.  P120,000

c.  P200,000

d.  P320,000

2. Mr.A imported various personal and household

household effects with
with a value ag
aggregating
gregating P400,000
P400,000.. P320,000
of these was subjected to a 8% customs duty by the BOC. What is the VAT on importation?

a.  P0
 

 b.  P41,472

c.  P42,240

d.  P48,000

3. A bookstore company imported the following items:

Landed Cost

Books P 350,000

Professional instruments 200,000

School Supplies 350,000

Total P 900,000

What is the total VAT on importation?

a.  P 0

 b.  P 66,000
c.  P 72,000

d.  P 108,000

4. Mr. C, a VAT- registered food retailer, imported the followin

following
g from China:

Landed Cost

Fruits P 250,000

Vegetables 180,000

Frozen meat 50,000

Marinated milkfish 100,000

Total 580,000

Compute the VAT on importation.

a.  P 0

 b.  P 12,000

c.  P 51,600

d.  P 69,600
 

5. Alexis furnitures, a percentage

perce ntage taxpayer, imported the following household equipment:

Landed costs

Machineries, for business use P 1,150,000

Heating system, for home use 250,000

Total 1,400,000

Compute the VAT on importation.

a.  P 0

 b.  P 27,000

c.  P 150,000

d.  P 168,000

6. Danes AgriCorp imported the following:

Landed Costs
Seeds P 400,000

Fertilizers 750,000

Farming equipment 450,000

Herbicides and Pesticides 250,000

Total P1,850,000

Compute the VAT on importation.

 
a. P 0
 b.  P 42,000

c.  P 72,000

d.  P 84,000

7. Home Appliance Company imported the following for personal use:

Furniture P 600,000

Rattan 250,000

Lumber 450,000
 

Compute the VAT on importation.

a.  P 30,000

 b.  P 72,000

c.  P 156,000

d.  P 204,000

8. Mr. Huligan imported rice from Viertnam. Details of his importation show the following:

Total invoice value P 1,000,000

Freight and insurance in transit P 350,000

BOC and other charges P 300,000

Compute the VAT on importation.

a.  P 0

 b.  P 120,000
c.  P 126,000

d.  128,400

9. An agricultural supply dealer imported the following:

Corn grits P 200,000

Hog feeds P 350,000

Specialty feeds P 300,000

Compute the VAT on importation

a.  P 0

 b.  P 36,000

c.  P 42,000

d.  P 102,000

10. The following data relates to the importation of cigarettes by Mr. Shinto:

Total invoice value P 1,000,000

BOC charges P 300,000

 

Customs duties P200,000

Excise taxes P300,000

Compute the VAT on importation.

a.  P 120,000

 b.  P 156,000

c.  P 180,000

d.  P 216,000

Multiple Choice: Problems 2 

1.  Don Pepito imported a harvester from the United States with a total cost of P 1,100,000
 before Customs duties. The
The importation is subject
subject to 10% Customs duties.
duties. What is the VAT on
importation?

a.  P 158,400

 b.  P 145,200

c.  P 129,600

d.  P 0

2. In the immediately preceding problem, assuming that the importation is made by an agricultural
cooperative, What is the VAT on importation?

a.  P 158,400

 b.  P 144,000

c.  P 129,600

d.  P 0

3. Mr. Smile, a professional practitioner, imported the following:

Calculators and computers for his firm P 900,000

Books P 600,000

Total P 1,500,000
 

How much is subject to VAT on importation?

a.  P 0

 b.  P 900,000

c.  P 1,200,000

d.  P 1,500,000

4. Mr. Juan Manuel Marquez arrives in the Philippines with an immigration visa. He had with him the
following:

Clothing, shoes and apparels P 100,000

Professional instruments and implements P150,000

Personal car P300,000

Total costs of personal belonging P550,000

Compute the total amount subject to the VAT on importation?

a.  P 0

 b.  P 200,000

c.  P 300,000

d.  P 550,000

5. Mr. Xhi, a non-VAT taxpayer, made the following domestic purchases of goods:

Purchase of scrap metals from a PEZA- locator P200,000

Purchase of machine from a VAT supplier P800,000

What is the imposable VAT on importation?

a.  P 0

 b.  P 24,000

c.  P 96,000

d.  P 120,000

6. Atlantis Shipping Company imported P 3,000,000 worth of vessel fuels and supplies for domestic use.
The company earmarked 60% of this for domestic use while 40% is reserved for its international
operations.

What is the VAT on importation?

 

a.  P 0

 b.  P 144,000

c.  P 216,000

d.  P 360,000

7. Mr. Beer, a VAT-

V AT- registered trader, imported an equipment with a dutiable valu
valuee of $40,000 from
abroad. The importation is subject to P 100,000 BOC charges before 10% customs duties on dutiable
value. The exchange rate to the peso was P 43.00:$1.

Compute the VAT on importation.

a.  P 218,400

 b.  P 227,040

c.  P 232,400

d.  P 239,040

8. If an importer paid 15% customs duties in the amount of P 24,000 plus P 134,000 charges in the
Bureau of Customs, what is the VAT on importation?

a.  P 0

 b.  P 18,960

c.  P 35,280

d.  P 38,160

9. Shanum Company had the following data regarding its importation:

Invoice price in US dollar $ 12,000

Other costs to bring goods to the Philippines P 145,000

BOC charges P 100,000

Customs duties is 10% of dutiable value

Peso-Dollar Exchange rate P 42.80:$1

Compute the VAT on importation.

a.  P 0

 b.  P 81,643.20

c.  P 91,032.00
 

d.  P 98,935.20

10. Mr. Dolinger imported various merchandise from abroad. The importation was invoiced at $ 5,000.
Mr. Dolinger also incurred the following costs of importation:

Insurance P 4,000

Freight P 15,000

Wharfage fee P 4,000

Arrastre charge P7,000

Brokerage fee P8,000

Facilitation fee P5,000

Mr. Dolinger was also assessed P 24,000 and P 18,000 customs duties and excise tax, respectively. The
applicable exchange rate was P 42.50:$1

What is the VAT on importation?

a.  P 25,500

 b.  P 30,540

c.  P 35,100

d.  P 35,700