Chapter 6 - Introduction to the value added Tax - i ed ED TAX = INTRODUCTION To THE VALUE ADDED 1” copter provi Sverview of the VAT ‘The vatable sales and » 2,200,000 ness Gross receipts from restaurant busines Gross receipts from exercise ofprofession = 5 3.300,000 Total exceeded P3M, Mr. Tabaco shall pay VAT Since he rate ar ee and professional practice. Mr. Tabaco shall ng ye common cari’ tax on the txt cab- shes IMlustration 3: Corporations with subsidiaries and brancl ra Corporal had the following subsidiaries and branches and their corresponding recorded 12-month sales: Subsidiaries: Branus Corporation - 55% owned. P 3,200,000 Alexus, Inc. - 70% owed 1.800.000 Total subsidiary sales P. 4,000,000 Branches: Dagupan City branch office P 800,000 San Fernando City branch office 700.000 Total branch sales 21,500,000 Petronicus Corporation reported the following sales: Sales to San Fernando branch office P 400,000 Sales to Branus Corporation Ban000 Sales to other customers { Total Parent company sales Eo Each corporation is a separate taxable 5 y Person. Branus, Alexus and Petronicus Corporation are separate corporations that should be separately registered. Branus should be registered rnon-VAT taxpayer. as a VAT taxpayer. Alexus should be registered as @ tea tity with their head office. Hence, Dagupan branch and San Fernando * ‘branch are not separate Biles vith Petrorica 300,000 900,000 800,000Chapter 6 — Introduction to the Value Added Tax Note that Petronicus sales:to San Fernando City branch is not considered because itis a sale to itself. tis not a realized sale, Petronicus Corporation shall be registered as a non-VAT taxpayer. Illustration 4: Married individual taxpayers Mr. and Mrs. Crocs had the following sales and gross receipts from their respective businesses during the last 12-month period: —MrCrocs_ _Mrs.Crocs_ __Total__ Gross receipts from profession P 2,200,000 P 1,700,000 P. 3,900,000 Sales.from sari-sari store —1.350.000 __1,350.000 Total P2,200,000 P_3,050,000 P 5,250,000 Each individual is a taxable person and is separately subject to business tax. The aggregation shall be made for each individual spouse. Hence, Mr. Crocs will pay the 3% percentage in the upcoming month, but Mrs. Crocs shall ‘pay VAT because she exceeded the VAT threshold. If any sales or receipts cannot be directly attributed to or identified as exclusively earned or realized by either spouse, the same shall be divided equally between them for the purpose of determining their respective sales or receipts for purposes of the threshold. Optional VAT Registration Taxpayers below the threshold can voluntarily register as VAT taxpayers. _ Such option is subject to the 3-year lock-in period. The. taxpayer is precluded to have his VAT registration revoked until the lapse of 3 years. r VAT Taxpayers with Mixed Transactions It must be noted that despite the VAT registration, VAT shall apply only to the vatable sales or receipts. His non-vatable sales or receipts remains from VAT. The exempt sales remain to be exempt while the receipts subject to percentage tax are subject to their specific percentage rates. The only exception to this is when the taxpayer opted to have the ‘AT apply to this non-vatable sales or receipts. the option to subject to exempt sales to VAT is not permanent. It by the taxpayer after the lapse of the 3-year lock in period. E ADDED TAX MODEL ble of a VAT taxpayer is computed as:Tax Chapter 6— Introduction to the Value Added one WAT ¥ the VAT on the vatable sales or receipts. The output VAT is presumed passed on by the seller on his sales or receipts. teume that ‘ABC Company, aVAT taxpayer, made’a P100,000 vatable sales on account. a ‘The taxpayer shall bill the following to the customer: Selling price, P 100,000 ‘Add: VAT (12% x P100,000) 12.000 Total invoice price P_112,000 This shall be recorded by the taxpayer in its books as follows: Accounts receivable ° P 112,000 e : P 100,000 Output VAT i000 Types of Output VAT 1 Regular Output VAT -'12% VAT imposed on domestic sales o1 | 1 ere hee ge : receipts | ys ‘Zero Outyuit VAT - 0% VAT imposéd on export and other 2ero-rated sales The detailed v 2 rules on output VAT will be discussed in Chapter 7 and Chapter INPUT VAT __ Input VAT is thé VAT paid'by the VAT sn he sire taxpayer on the domestic purchases from VAT suppliers importation of goods or services in the course of Payment of VAT on, law as incent Purchase or import, input VAT i sto the taxpayer such as in the case to ble input VAT”, “allowable deductible against output VAT is z Put VAT” or “creditable input VAT’- creditabli ut VAT. Those Pity. Not all paid input VAT is creditable . 200Chapter 6 — Introduction to the Value Added Tax Mustration Assume ABC Company in the previous illustration purchased goods from a VAT supplier. The supplier billed at P78,400, inclusive of VAT. i The VAT shall be checked on the invoice. If not indicated therein, it can be computed from the invoice as follows: Invoice price P 78,400 Divide by: VAT-inclusive rate (100% + 12%) __112% Purchase P 70,000 Multiply by: VAT rate 12% VAT on purchase 28400 This shall be recorded by the taxpayer in its books as follows: Purchases P 70,000 Input VAT 3,400 ‘Accounts payable P | 78,400 ‘The detailed rules on output VAT will be discussed in Chapter 9. VAT DUE At the end of each month, the input VAT is offset with the output VAT. A positive VAT due is paid to the BIR. A negative VAT is normally non- refundable but is carried over to the next succeeding months or quarter. Mlustration Continuing the two preceding two illustrations, ABC Company shall compute its VAT due as follows: Output VAT P 12,000 Less: Input VAT ——8400 VAT due Pb _3.600 At the end of the month, ABC Company shall close its VAT accounts as follows: Output VAT P 12,000 Input VAT VAT payable P 8,400 3,600 REPORTING : that VAT is pald quarterly but is paid monthly as follows:> 320,000 _ | P_375,000 1p VAT exceeds the output VAT. The input VAT remains on the book.Chapter 6 — Introduction to the Value Added Tax Output VAT P 69,600 ~ Input VAT* P. 44,400 VAT payable 25,200: VAT payable P 25200 - Cash P 25,200 To record payment of VAT due +#(P38,400 from February + P6,000 January carry over) In VAT reporting, the February 250M would ldok like: P 69,600 — 44.400 B_25,200 P 375,000 45,000 P 420,000. --P 560,000- S P 500;000 60,000 P 60,000 P 45,0u0- 15,000 P. 15,000 P 15,000 VAT due C y 25500 in March would look like: P 207,600. —167.400 The unutilized input input VAT in the followingadded 12" tothe value chapter 6~Introaucie” year had the following out VAT ang hates singe alent ry to April 2036: ‘op ‘AT during’ them Februar March Janus, 90000 PESO ae VAT 0.000 90,000 65,000 70,000 ee be reported and computed as follows: ee March Peaoia 90,000 255,000 Ree 205,000 70.009 return (BIR Form 2550M) for the first two months of the 'VAT and input VAT for the month. arter Perv mga ach at lb ee rs an ip January to March. Any VAT paid in the prior two months ogee Reporting ete will be monthly for April and d the following sales —— apes caaeeave OF any VAT, inChapter 6 — Introduction to the Value Added Tax Note: 4. Anegative VAT payable in a month means na VAT is to be paid. ‘A negative VAT payable in the first month of the quarter or at the end of the quarter My. be carried over to the succeeding month or quarter as the case may be. This will be discussed in detail under input VAT carry-over in Chapter 9. ‘The foregoing discussion covers the normal accounting procedures of VAT compliance for regular vatable sales. Sales subject ta special VAT rules There are sales or receipts that are subject to special or unique tax rules, such as the following: a. Sales to the government b. Zero-rated sales c. Exempt sales ‘The following table show a sumniary of the unique tax rules: including GOCCs and:GOCCs is vatable at 12% normal rate but 5 agencies or GOCCs to withhold a 5% final VAT purchases. The invoice sales or billing to the. government or GOCCs jeducted 5% final VAT based on sales or receipts. The taxpayer will e balance. eld tax shall be presumed as the actual VAT due of the ‘sale. There would: be no more VAT payable: Thus the a his claimable input VAT on that sale because the ly fixed or standardized by the government at 7%: 12% of sales or receipts d person made a single sale of goods to a ve of P48,000 output VAT. These goods 36,000 input VAT.the Value added Tax — introduction to gouek cord the folowing in is BOOKS: Thapar sa p 300,000 Tarvat ; P 336,000 Cash orachepurcneseefoeeds cash (PHHOK- F204), Pei o00 eit (mons) P 400,000 48,000 "Out VAT tee german andthe! woking VAT i P 300,000 Costs purchases P 300,000 » "To record the cast of sales to che government id P 48,000 8,000 t : P 36000 ifinl VAT - 20,000 wipe ouput VAT and withheld final VAT at month end no VAT due and payable on sales to the government. ence between the actual input VAT and the P 28,000 ate cae eles ot ebcoas tic ase aoe as) 00 - P28,000) excess actual input VAT is a loss which is added to cost als excsds the aca Input VAT, a reduction to cost or expenses P 48,000 ——28.000 P 20,000 —— 20,000 a Sales are non-vatable. In our 9% VAT to VAT taxpayers. With a zero he VAT due would be negative to claim the input VAT as a:Chapter 6 - Introduction to the Value Added Tax If claimed as tax refund, the taxpayer will be paid back in cash. If claimed as tax credit, the taxpayer can use it to reduce other internal revenue tax obligations to the BIR. If the input VAT on zero-rated sales is not applied with refund or tax credit, the claimable input VAT would be added to creditable input VAT deductible against output VAT on other vatable sales. Mlustration AVAT-registered person exported goods for $8,000 (equivalent to P400,000). ‘These goods were purchased for 200,000, before P24,000 input VAT. The taxpayer shall record the following in his books: Inventory/Purchases P 200,000 Input VAT | (24,000 : ef Cash P 224,000 To record the purchase of goods P 400,000 P. 400,000 P 200,000 24,000 P= 24,000 24,000 P 24,000 can be used to settle any internal revenue tax obligation of ax, excise tax, donor's tax, documentary stamp tax and [against output VAT at the end of the month. -P 24000 4 ; P 24,000 ‘VAT on zero-rated sales, If the input VAT ‘against output VAT.value Addéd TOX ted sales ct to 0% VAT: There ‘are domesti one coxport sales are subject ‘considered export sales ati or ne ae or or ‘engaged international transport Operation to economic zone - with inditee tax exemption Hee In ‘ aval sale 9 PETOOS Wan Development BaMy ectively subj oR eas ofectively 2erorrated sale ect aa iconv foitese types of sles Silat the treatment ang ‘The 0% Detailed discussion of these exceptional Sales wit ps fiscussed in Chapter 8- Exempt sales T, exemptsales are non-vatable sales such as: Exempt sales of goods, CL se rae i. Services specifically subject to percentage tax Exempt sales will not be subject to output VAT. Consequently, the seller ig input VAT. The input VAT traceable to exempt also not allowed to credit is part of costs or expenses of the seller and is deductible against gross subject to income tax. he month, a VAT-registered person sold unprocessed agricul Ena are ee for P150,000. He e mes supplies, exclusive of .P12,000 in i cpr oe put VAT, which were all the following in his books: P 150,000 ° 100,000 2,000 262,000Chapter 6 — Introduction to the Value Added Tax Note: 4, No output VAT is allowed to be charged on exempt sales. However, if the taxpayer ‘charged VAT on exempt sales, the same shall be considered taxable for purposes of the VAT. 2, The P12,000 input VAT is included in the supplies expense and is not claimable as tax credit. Comparison of Zero-rated Sales and Exempt sales __ Zero-rating is applicable on VAT taxpayers only. Hence, zero-rated sales apply ly to VAT taxpayers whereas exempt sales can occur for both VAT and non- taxpayers. However, VAT taxpayers may not have exempt sales if he opted subject exempt sales to VAT. ‘to the differences in the rules, there are four types of sales or receipts of the VAT: subject to 12% VAT and are allowed full credit of actual all sales of goods, properties or services other than: ment or GOCCsPhilippines is ‘normally even | rvatable goods © sale is: , 2, The sale of vat sale, except when re © subject to final withholding yay reg ae government OF cctively zero-rated such as sales to yar. a an. ‘ Philippines. __Abroad _ P 500,000 $ 10,000 —— 800,000 ___20,000 ‘exempt goods banana fruit in the Philippines is an exempt sale of vatable non-food tobacco in.the Philippines is a 1,000 export sale is zero-rated sales, - Private clients 700,000 P 1,800,000Chapter 6 — Introduction to the Value Added Tax Rice seeds are exempt goods while pesticides are vatable. IRRI is a VAT-exempt person with indirect tax exemption. The following domestic sales are exempt sales: DA. IRR Private clients Sale of rice seeds P 500,000 P 0 P 1,800,000 Sale of pesticides 0 ew Total B_500,000 p__0 P__1,800,000 The following are zero-rated sales: sce Ast Private clients Sale of rice seeds. P 0 P 700,000 P 0 Sale of pesticides 0 __ 300,000 Total P___o B.1900,000 P___0 400,000 sale of pesticides (i.e. vatable goods) to the Department of culture is a vatable sale to the government. The P3,200,000 sale of icides to private clients is a regular sale. sales subject to VAT of registrable persons sales of registrable persons are subject to VAT despite their non- on as VAT taxpayers but no input VAT credit is allowed. non-VAT taxpayers who issues VAT invoice or receipt non-VAT taxpayers who illegally charge VAT on their sales ‘ect to VAT without the benefit of input VAT plus the 50% and the usual 3% percentage tax. es billed by VAT taxpayers as regular sales that are billed through a VAT invoice or VAT re is regular sales. Furthermore, exempt sales which are not as “Exempt” in the VAT invoice or VAT receipts shall sales subject to VAT. is for P1,000,000. He purchased the goods for P 120,000P 120,000 ~ 60,000 —— 30.000 2__210,000 to identify the sales as exempt, he P 120,000Chapter 6 ~ Introduction to the Value Added Tax CHAPTER 6: SELF-TEST EXERCISES AAS ee ee Discussion Questions 1. Describe the scope of vatable sales. 2, Enumerate those VAT-exempt transactions under the NIRC. 3. Discuss the applicability of the VAT on sales. 4. What are the two VAT thresholds? Discuss the rule on registration for each threshold. 5. Illustrate the application of the VAT threshold to persons who exceed the VAT threshold during the year. 6. Enumerate other instances of vatable sales. 7. What are the classifications of vatable sales? How do they compare in terms — of treatment of output VAT and input VAT? 8. Illustrate the reporting of the value added tax in each taxable quarter. 9. Discuss the invoicing requirement of VAT-registered taxpayers: ‘Drill Exercises For each of the following items, indicate the following: “Exempt - for entity exempt from busiriess tax % tax - for those specifically subject to percentage tax Vatable - for those subject to either VAT or general percentage tax 5 _ Seller of agricultural food productsTrue or False 1 led the VAT-threshold in any 12-month period must 1. Apperson who a VATS ted and th = Sore) on receipts oF pies cans than those exempted and those fically OP S “f 3 een a aE sales or receipts not exceeding the VAT-threshold “may register VAT taxpayers. Apes siieaiiie siete receipts not exceeding the VAT-threshold register as a VAT-taxpayer. 7 er Smee deem tie expectation to exceed the VAT- ‘threshold must register as a VAT taxpayer. . Aregistrable person is exempt from VAT. AVAT-registered person is exempt from VAT on VAT-exempt sales. ‘Anon-VAT taxpayer shall not bill VAT on his sale. ;_ A VAT-registered person is liable to VAT on exempt sales and services amaad Percentage tax. franchise grantees of electricity is P10, . e VAT threshold for ane lectricity is P10,000,000. a sellers 2 800dS or services is P3,000,000. Srantees of gas and water is P10,000,000. eect 2 8as and water is Professional practitioners is P3,000,000. ¢ billed with an output VAT, shall not be billed with output VAT since it is #AT on his sale shall be subject VAT 3% percentage tax, andSe Chapter 6 — Introduction to the Value Added Tax 4, Exempt sales which are billed as regular sales shall be considered as regular vatable sales. 5, The VAT payable of a VAT-registrable person is the output VAT without benefit of Input VAT plus 3% percentage tax. No input VAT traceable to exempt can be claimed sales as tax credit. No input VAT traceable to government sales is claimable as tax credit. A VAT-registered person shall be subject to a final withholding VAT of 12% on sales to the government. 9, The VAT payable of any person is always 3% of the value-added on the sales of goods. | 10. The claimable input VAT on government sales is 7% of the sales. 11. The VAT payable on zero-rated sales is always zero. 12. There is no way VAT payable could be negative in a particular month or quarter. - 13. VAT is paid in three monthly installments similar to the percentage tax. t 14, Exempt sales must be indicated as such; otherwise, they will be regarded as 3 regular sales. “ 15. The standard input VAT is 5% of government sales. Pap Multiple Choice - Theory: Part 1 |. All ofthese are vatable, except a. Engineering contractors c. Employee Lawyers d. Brokers hich is not VAT-exempt? “Importation of agricultural or marine food products "Gross receipts of professional practitioners Receipts from taxicabs ¢. Sale of bamboo handicrafts d. Sale of vegetablesieee BE i introducer rapt ing wi 7aY VAT corn miller 5 mnnetee oo cain es : ber epay VATE sea carrier “3 ee " fey poroowing VAD ting alley pe wale tor -of cockpits « aporstar ofa racetrack 47. 7 18 jsvatable? 10. ee of buses and fepneys "14, Which will not pay VAT on its receipts? a . c. Bookstores ; b. Real property dealers d. Taxicab operators a ‘correct? are considered separate taxpayers for business tat ‘of the VAT threshold, A both exempt salt ipts from to percentage tax must be included eee Must pay VAT on services subject '° those who voluntarily register as V4"Chapter 6 — Introduction to the Value Added Tax 45. To franchise grantees of radio or television, the VAT-registration shall be a.. revocablein3years. —_c. revocable in 1 year. b. irrevocable in 3 years. d. irrevocable perpetually. 16. Which is not vatable as a separate entity? a. Abranch c. Aspouse b. Asubsidiary company d. A parent company. 17. Statement 1: Sellers of services are subject to VAT on gross receipts. Statement 2: Sellers of goods are subject to VAT on gross selling price. Which is correct? a. Both statements c. Statement 1 b. Neither statement d. Statement 2 _ 18, Statement 1: Asa rule, percentage tax is paid monthly. ‘Statement 2: VAT is paid monthly and quarterly. Which is false? _ a Both statements ¢. Statement 1 . Neither statement d. Statement 2 9, Statement 1: "Gross receipt” means collections and advances by clients. 2 : "Gross selling price” means gross sales including delivery and excise tax on the sales if any. c. Statement 1 d, Statement 2 ‘Bymenses of the service provider that are reimbursed by the art of the, Bross gore "_ ¢. Statement 1" BS ance -vaT-registered by VAT-regi Saxpayers, i ony non-VAT taxpayers again tak a 5 # from non-V, o the output VAT. AT Spi ‘pe billed on export sales ang Sxenp food products from VAT-sellers | products from non-VAT from non-VAT suppliers from VAT suppliersChapter 6 — Introduction to the Value Added Tax d. Sales to non-profit institutions 9, Whatis the VAT-due and payable on regular sales? a. Output VAT less Input VAT b. Output VAT less Input VAT plus 3% percentage tax ¢. Output VAT + 3% percentage tax -d. Output Vat +.3% percentage tax plus surcharge 10. Which is subject to withholding VAT? a. Regular sales of real properties b. Zero-rated sales ©. Sales to the government d. Exempt sales 11. AVAT taxpayer cannot claim input VAT credit on a. Regular sales c. Government sales b. Zero-rated sales __d. Exempt sales 12. Which is a possible source of input VAT? a. Importation __b. , Purchase from VAT;sellers ¢. ' Purchase from non-VAT sellers d. AandB 413. AVAT taxpayer can claim the actual input VAT eredit on’ a. Regular sales ¢. Government sales b. Zero-rated sales d.AandB 14 VAT taxpayer may claim only partial or full input VAT credit on he output VAT on government sales is c. None d. 12% of value added d, 12% of value added ‘on exempt sales is c. None: d..12% of value addedvar on! at rechine a VAT PP pliers or VAT suppliers a rn Batol ees trom VAT PENS © Fppotsales smapayatieon regular salt 2s posiy 20 soenet 1 ToT and payable on export sales is always negative, ‘Stateme! correct? Which statement 5 c. Statement 1. Both statements . Statement 2 VAT on government sales. ‘21. Statement 1; Sellers always Pay 'VAT on export sales ” Syatement 2: Sellers will not pay Which is incorrect? : ~ -¢. Both statements d. Neither statement 22, Which is a correct statement regarding the VAT? a. The taxable quarter of any taxpayer must be aligned to the calendar year. ‘b. The taxable je alli e eae individual taxpayer must be aligned to the i ane oct ie . ee of a corporate taxpayer must be aligned to the d. Allofthese oa. Storeraes : The VAT re schepras | prepared onamonthybags 7 HSE Evo months ofthe quarter ae ‘Statement 2: The VAT : return on the third month of the quarter reflects a -¢.Both statements @ Neither statementChapter 6 — Introduction to the Value Added Tax 25, The monthly VAT return is referred to as a. BIR Form 2551M ¢.BIR Form 2551Q b. BIR Form 2550M 4. BIR Form 2550Q Multiple Choice - Problems: Part 1 1. An agricultural supplier had the following sales during the last 12-month period: Sales of fertilizers and corn seeds P 1,200,000 Sales of seedlings ‘400,000 700,000 Farm equipment What is the business tax liability of this taxpayer? a. VAT onall these categories of sale 7 b. VAT on equipment and seedlings c. Percentage tax on equipment and seedlings i d. Percentage tax on farm equipment 2. Mrs Escala had the following sources of income in the past 12 months: Salaries P 1,200,000 Professional fees 800,000 Which is correct?. a. She shall be subject to VAT on the salaries and professional fees. b. She shall be subject to percentage tax on the salaries and professional = fees. = She shall pay percentage tax on the professional fees only. _d. She shall pay VAT on the professional fees only. ga Corporation had the following sales in the past 12-month period: P 2,000,000 1,200,000 — 1,000,000 P_4.200,000 shall pay VAT. branch 2 shall pay percentage tax.ae 4,200,000 — xecertae p-Az00.000 sa try 2 eae ee sy VAT. ae ae subsidiary? Say VAT. wn se Sao? a vain folowing sales in ee ast 12 months Mr. and Mrs. Bp? sales P 1,400,000 P ~~~ P 1,400,005 Fruitsand vege =» 1,200,000. 1,200,099 Foidmetsiles——__gn9.909 600.000 ae sein E8000 Escore Which sand Mrs-Lallo shall pay VAT. a . and Mrs. Lallo shall pay percentage tax. z aot ae pay VAT, but Mrs Lallo shall pay percentage tax. ‘5. rs Lallo shall pay VAT, but Mr. Lallo shall pay percentage tax. +4 Mr. Vegetta, a VAT-registered taxpayer, owns a mini-store with the following sales in the past 12 months: ~ pean eee P 1,800,000 ed rice and viands 1,200,000 ——500,000 P_3,500,000 2 all pay percentage tax on. the sales of rice, viands, 1 shall pay VAT on the sale of rice, viands, stacks a —- wz S = ene Pp. 2,000,000 g a 2 be Be ol eee 10eeee———————————_ Chapter 6 - Introduction to the Value Added Tax Which is correct? a. The taxpayer shall pay VAT on all receipts. b. The taxpayer shall pay VAT on'the commercial spaces. cc. The taxpayer shall pay percentage tax on all receipts. d._ The taxpayer shall pay’percentage tax on the commercial spaces. 8. Aservice provider had the following data during the ‘month: Revenue, including VAT P 268,800 Gross receipts, including VAT 180,000 Input VAT 12,000 ‘Assuming the taxpayer is VAT-registered, compute the VAT payable. a P7,283 ~ ¢.P 16,800 b. P9,600 dP 19,286 9, Assuming the taxpayer is a VAT-registrable person, compute the VAT payable? : a P7,283 c.P 16,800 b. P9,600 d.P 19,286 0, Aseller of goods had the following data during the month: invoice (total billed prices) P 436,800 cash collections 380,800 - returns and allowances, billed price 11,200 VAT 14,000 Assuming the taxpayer is VAT-registered, compute the VAT payable. "PO cP 31,600 P .P 35,600 ing the taxpayer is a VAT-registrable person, compute the VAT te . P45,600 .P 46,800 les and purchases were taken from the books of accounts of A —May__ _une _ 25,000 P 400,000 P 600,000 000 420,000 200,000Bait EE sales and purchases during the mont, p 300,000 280,000 sale is made to regular - hares " -¢.PA1,000 i ih p34000 «= P50,000 The sale is mde by a regstrable person ag a P20,000° c.P41,000 b P3400 4.P 50,000 -Multiple-Choice - Problems: Part 2 sale‘ was invoited by a VAt-seller at P500,000. Compute for the Output VAT. cP53,571 .P60,000 ‘registered seller wishes to bill the sale of unprocessed meat for At what amount should the sale be billed? P5371TEE TT ae Chapter 6 — Introduction to the Value Added Tax What should be the invoice price? a. P5,500 ©. P5,665 b. P5545 .P5,680 4. The sale of a residential lot was invoiced for P1,680,000. Whats the Output VAT? a PO c.P200,000 b. P180,000 .P201,600 5. The sale ofa residential dwelling was invoiced for P3,920,000. Whatis the Output VAT? a PO ©. P462,000 b. P420,000 .P470,400 6. The sale of fruits was invoiced in a VAT invoice at P24,000. Whats the output VAT? a PO ©. P2,880 b. P2571 4.P4,000 ° 7. Ataxpayer had the following purchases of vatable goods, exclusive of VAT: Purchases from non-VAT suppliers P 180,000 Purchases from VAT-suppliers —1.000.000 _ Total purchases P.1.180,000 "Whatis the input VAT? ‘a 107,143 ©, P126,429 4.P141,600 ——6.000 bP s6.000 c.P 6,720 d.P 7,200SS rotnevalue Add i er ng gross receipts: company 8 bast Curréne ed TAX if ae 700,000 P 700,000 P 4,600.01 4 ifeinsuranc® 1,920,000 200,000 Premiums opie insurane 140,000 10,000 es products ae ys aid not register as a VAT taxpayer. ‘The a s the current month? hati the VAT payable FO" ¢.P24,000 a PO dP 108,000 ‘businesses had the following saley | Last - Current 1z-months_ P 1,800,000 P; ..200,000 4,500,000 150,000 140,000 13,000 gidsier to 2 VAT payable for the current month. ¢.P:18,000 d.P-29,000° is engaged in mixed transactions: what is the VAT payable? ie to the government from gots 19.Chapter 6 — Introduction to the Value Added Tax 45, A VAT taxpayer sold goods to the government for 1,000,000 and: paid 40,000 input VAT traceable to the sale. What {s the creditable input VAT ‘on government sale? a PO ©. P 50,000 b. P40,000 .P 70,000 46. A VAT-taxpayer exported P1,000,000 worth of goods. It incurred P36,000 input VAT on such sales. What is the creditable input VAT? a PO c.P 50,000 b. P36,000 dP 70,000 17. A non-VAT-taxpayer exported P1,000,000 worth ‘of goods. It incurred "_ P36,000 input VAT on such sales. What is the creditable input VAT? PO c. P'50,000 P 36,000 a. P-70,000 8. A taxpayer collected the following from lessors of commercial spaces: ling for rentals P 1,500,000 75.000 P.1.425,000 c.P180,000 d. P200,000 da 5% creditable withholding tax plus P48,150 cash . & P5373 d.P5,400 ed a sum of P74,900 and a P3,500 certificate of g tax. What is the output VAT? c.P 8,400 d.P 8,988