A = chapter 7-The pegular output VAT CHAPTER Jaw THE REGULAR output vAT Chapter | ‘overview and objectives pee pe ree ee ‘This chapter discusses the detaile« rules of 42% output VAT on vatable sales of goods, ‘services, oF PFO! scted to have comprehended: After this chapter, readers are: \T and the VAT base on the sales of goods f services SOURCES OF REGULAR OUTPUT VAT 4, Sale of vatable goods ie Sale of vatable services +3, Sale of vatable properties ‘Transactions deemed sales table an overview of the tax basis of the VAT:Chapter 7 —The Regular Output VAT Cash sales P 200,000 Sales on account (P 80,000 collected) 100,000 Installment sales (P120,000 collected) 300,000 Delivery charges to customers 15,000. Advances from customers 50,000 Total sales P_ 665,000 ‘The gross selling price and output VAT are as follows: Cash sales P 200,000 Sales on account (P 80,000 collected) 100,000 Installment sales (P120,000 collected) 300,000 Delivery charges ——15.000 Gross selling price P 615,000 » Multiply by: ——12% Output VAT 273,800 Unreasonably lower selling price If the selling price is unreasonably lower, the VAT shall be based on the fair value of the goods sold. ‘The gross selling price deemed unreasonably lower when it is lower by of the actual market value of the goods sold. The fair value of the goods shall be determined by the Commissioner of Internal Revenue. theless, if one of the parties is the government, the output VAT shall be sed on the actual selling price (Sec. 7, RR4-2007). ition 1 IAT seller made the following sales of goods to private customers during the Selling price _Fairvalue_ P 150,000 P 180,000 200,000 190,000 ——102,000 150,000 P__452,000 be computed as: Discount Sellingprice _Fairvalue_ _Taxbasis_ 17% P 150,000 P 180,000 P. 150,000 0% 200,000 190,000 200,000 32% 102,000 150,000 —150,000 P 500,000 Se P__60,000verter bat ed nace OE + selingprice Fatt 900 P 134,000 _Salesto__— Gy of Fernando (gov't) P 134,000 Pte 000 pecan i eed P 284,000 Multiply by: — 1h Output VAT P34.080 Secs a es eet ens caly Heenan price.doe not sy sales made to the ‘Timing of Output VAT reporting ‘The output VAT on the sale of vatable goods is reported in the month of sale. SALE OF VATABLE SERVICES. ‘The sale of services is subject to 12% VAT based on the gross receij Gross a ame a ee aircHiat toa concert of goss A VAT registered repairman had faletom ductes the wocl | the service provider had the following revenueChapter 7 - The Regular Output VAT —Collection_ Collections for services rendered P 250,000 ‘Advances from clients ___ 200,000 Gross receipts P 450,000 “Multiply by: 12% Output VAT 254.000 ‘Timing of Output VAT reporting The output VAT on the sale of vatable services is reported in the month of collection. " SALE OF VATABLE PROPERTIES The sale, barter or exchange of vatable real properties is subject to VAT on i the gross selling price. Under the regulations, gross selling price” means the higher of the: a. Consideration or selling price b. Fair value of the property _ Under the NIRC, the fair value of real property is the higher between the: a Zonal value; and b. Fair value per assessor's office. the absence of a zonal value, “gross selling price” shall mean the fair value ‘assessment or consideration stated in the sales document, whichever is ‘gross selling price is based on the zonal value or assessor's fair value e property, the zonal value or assessed value shall be..presumed sive of VAT. f r, @ real property dealer, sold a commercial lot in June 2020. The ta relate to the sale: P 4,500,000 4,000,000 2,500,000 3,800,000 ee BOE296 2_480,000 8631. ‘output VAT er than the P3.8M selling ees ilshighicis deemed exclusive ae mares croc bs au the selling price, the output VAT m , evans eet ‘hat the VAT billed Separately billed with ae ‘the property: pased onthe selling price Is ve Ir the gross selling Feames presumed’ Pe vena, ‘a real property dealer, sold a commercial lot in June 2020. The following datarelateto these be 4,000,000" Iresorsfarale » seo0o ace ete 7 456,000 , The gross selling price and the eee P 4,256,000" Output VAT Bi 456,000 Note: 4 ns uslitoncsimeaisen eaves 2ch'g Pies HF 12 Maher cone 2 ee ea ne consideration Appearing in the inclusive of VAT. output VAT shall be: i § _Anotherillustration ©.» DEF Realty Corporation, a VAT-registered "residential properties during the month: realty dealer, sold the following Zonal : Assessed. Selling tial lot P 1,500,000 P 1,200,000 Pp 1,700, ~ 900,000 500,000 300,000 VAT shall be nil, Recall p Ifsold ata price notento Chapter 4 that the sale of a residential © exempt ifthe selling aes P1,919,500, The sale of a residential Price does not exceed P3,199,200. the VAT an tem onsand VAT on properties med VAT ee pacmistderation on the sale of Bae isive but this is not the case on thea Chapter 7 The Regular Output VAT ‘The concept of unreasonably lower does not apply on the sale of property. ‘The higher of the fair value and selling price is always the basis of the VAT. ‘Timing of Output VAT reporting ‘The output VAT on the sale of vatable properties is reported in the mor sale or by installment method. mth of Installment reporting of Output VAT on real properties The output VAT on the sale of real properties may be reported in installment if the initial payment from such sale if it does not exceed 25% of the selling price. ion ‘August 1, 2020, a real property dealer sold a commercial lot with the P 6,000,000. 4,500,000 5,000,000 payment of P500,000 was paid with the balance due in 36 monthly ments of P125,000 starting September 1, 2020. P_720,000 paymen shall be projected until the end of the year of sale to determine initial payment: i Initial Selling —Payment_ __Price Ratio P 500,000 125,000 125,000 © 125,000 ——125,000 21,000,000 /P 5,000,000 =20%fies as a sale on the insta, 259 be sale gue in installments, Men thereafter shall be: p. 125,000 ~ __18,000 september P_143,000 third and fourth quarters of 2020 shall be, __——Fourth Quarter _ Sept —Oct__ _Nov, _"_Dec._ zon. 218,000 P18,000 P54.000 cutpt VAT isthe cumulative ofthe utp VAT forte eng aler ona deferred payment basis aalty dealer on a deferred payment basis, not on treated as a cash sale. The fair value or gross is higher is subject to VAT in the month of sie. m the sale shall no longer be subjected to VAT. auntie property witha for 4,000,000, The terms of the sale require? a ce payable in monthly installments 020.. B_600,000 Initial Selling Ratio P 400,000 200,000Chapter 7— The Regular Output VAT ‘The reportable output VAT in the third and fourth quarters of 2020 shall be: Fourth Quarter —__— July August. Sept _Oct,_ _Nov._ Dec. — ourputVAT B_: P.600K P 600K P= PP =: Note! The Output VAT is reported in the month’ of sale. Hehice, no’ output VAT is further imposable on future installments. Interest and penalties Interest and penalties actually or constructively received by the seller are likewise subject to VAT. Mlustration a VAT-taxpayer made a sale of real property with a fair value of 3,000,000 for P2,000,000.The P360,000 output VAT on the sale qualified for installment reporting. During the month, Sarangani is due to receive the following, net of VAT: P 200,000 12,000 ——4.000 2_216,000 table output VAT on this collection shall-be: P 200,000 /P2,000,000 x P360,000 P 36,000 12,000 «12% 1440 4,000 x12% 480 f P__372,920 . to be billed by Sarangant shall be: P 200,000 12,000, —-4.000 P 216,000 ——32,920 2.253.920 d “ordinary assets” not primarily held for sale to customers or held course of business but the same is used in the trade r, the sale thereof shall be subject to VAT being a iyer’s main business (Sec. 4:109-1(B)(p) of‘ordinary assets) such as lan, os ay improvements, and pra course of business in the ordinary © y course of business are sale of property Pies notin the OTS emnpt from VAT. oat Aastra corporation, 8 VAT CDaYCr gold the following properties: P 1,300,000 Old factory (book value = 1,500,000) vacant lot, held as 4,000,000 ‘The output VAT shall be computed a5: Selling price of old factory Multiply by: < 2 2156.00 Output VAT P 1,300,000 _ Note: A {L._ The gain on the sale of the old factory shall be subject to regular income tax. 2. The sale ofthe vacant lot shall not be subject to VAT because itis a capital asset. The ‘same shall be subject to the 6% capital gains tax. Query: What if Hill Foods Corporation is a nou-VAT taxpayer? The sale of the old factory shall not be, subject to VAT. The VAT on sale of ordinary, assets applies only to VAT-registered taxpayers. niption i volving goods or properties whic mans anced rah fro ee nee erie as sales by the consumptions, they Nevertheless, since these transactions ot are considered “deemed sales” for to be lananetion not in the course riginally intendet of business of goods for-sale or for use in tke re in the profits of VAT-registeredChapter 7— The Regular Output VAT 3. Consignment of goods if actual sale is not made within 60. days following the date such goods were consigned 4, Retirement from or cessation of business with respect to all goods on hand whether capital goods, stock in trade, supplies or materials as of the date of cessation, whether or not the business is continued by the new owner or successor 5. Cessation of status as a VAT-registered person bu are used for purposes other [ransf 1 ‘This occurs when than their intended purpose, such as when: 1. Goods or properties‘held for sale ‘are no longer sold but are transferred or disposed of by other means other than sale. _ 2, Properties originally intended for ‘use are no longer used but are ____ transferred, disposed of or exchanged with other properties. _ __ Examples of consumptions not in the course of business: 4. Withdrawal by the business owner for personal use goods held for sale or properties held for use goods held for sale or properties held for use to pay off debts with tors (Dacion en pago) goods held for sale or properties held for use as property dividends to ge of goods held for use for other properties disposal of properties held for use in exchange for cash or other grocery operator withdrew the following for personal use: —Fairvalue_ _Bookvalue_ “Pp. 10,000 P 16,000 18,000 15,000 ‘deemed sale shall be P2,160, computed as 12% x only on vatable goods. The fruits and vegetables are realtor, transferred a commercial lot with zonal ilue per assessor of P350,000 in exchange for the ized company, BHI Company. property held for sale, for shares of stocks output VAT shall be P48,000, computed as7-The ‘control in the stocks of Bit co, from VAT sy "Pay, GH Realty’ shall be exempt Since | wnat fn commer) dechange that is a VAT exempt trans, 3 - petd for sale in trust to his daughts, pts property Mest basis of P2,000,000 and a fair rey rt at M8 p2,500,000 3 aa sale subject to VAT. The output Var g,., re completed BI 94 xP2,500.000- S Fano 00, compute tsdesignated by the donor as revocabey cote nce an transmission a Foemann ore ePaper sto bemerdy bel IN Ho hota not be and/or beneficiary: ; profit se se output VAT is nil Transfer to an ots Dot _subject to VAT. es decir ee following properties for distribution ty shareholders as property P 2,000,000 3,000,000 25,000,000 Corporation shall be subject to P360,000 output VAT, computed as 12% The merchandise shall be deemed sold subject to VAT but the stocks are not subject to VAT on deemed sales because they are capital e that even the actual sales of stocks is VAT-exempt. within 60 days, are as° consumption, but the rule is apparently intended © x recognition of output VAT by ™ Orting of the sales on consignment. its own sales operations but also sells La e00ds on consignment for a commissio® " lons for the month ended April 30,202Chapter 7—The Regular Output VAT ‘Sales - own inventories P 500,000 Sales - reported by consignees 150,000 Sales ~in behalf of consignors 100,000 20,000 Commission income on goods sold for consignors ‘The billed prices of outstanding consignments still held by consignees as of April 30, 2020 are as follows: February 2020 P 50,000 March 2020 80,000 120,000 April 2020 ‘The Output VAT shall be computed as: Direct sales P 500,000 _ Galesthrough consignees 150,000 Commission income 20.000 Total sales/receipts P 670,000 x12% P Deemed sales (February) P 50,000 x12% nmen he February unsold consignment is more Hence, it is deemed sold. The March that when the owner of the business withdraws a certain for his personal consumption, much would it be when he from business where all of the assets will become his sal. The retirement or cessation from business will result in ll goods or properties of the business to the personal use or ‘owner or owners. Hence, it is also a “deemed sale.” continued by a new owner, the goods or properties of the ly sold to the new owner. Hence, the goods or taxpayer, ceased business operation in May on termination of business operation include:Basis . weet Output - ; .ble goods and properties of busin cot elie ae al ation The SScounts receivables and inventor, those vata because ey are capital assets. yi Has is closing his business. He had in his inventory 100 sacks of rice valued at 'P200,000. ui The rice inventories shall not they aré VAT-exempt goods. _ subject to VAT. General Rule: Business dissolution is deemed sale. ‘As a rule of thumb, one must note that when there is business dissolution, there is deemed sale, such as in the following cases: Change of ownership of the business a. Incorporation of a sole proprietorship . b. Sale by a proprietor of his entire business at ofapartnership creation ofa new partnership which takes aver the business ._by incorporation into a partnership n there is no business dissolution, there is no deemed sale such as it be subject to VAT upon cessation’ of business since Even if these are actually sold, their sales is not ae Properties held for sale or lease for the on resulting in the acquisition of corpo" amounting to P1 million. 240Chapter 7 — The Regular Output VAT A The inventories including other properties held by DEF shall not be considerec deemed sale because the same corporation is not dissolved. The same corporation still holds the inventory and there is no transfer of the same. The personality of the corporation is distinct and separate from its shareholders. However, the exchange of real estate properties by ABC is a vatable sale, if the exchange did not result in the acquisition of corporate control. Exception to the business dissolution rule: 1. Merger‘or consolidatio “| "There is business dissolutionbut not RUGS gopeRT a deemed saleuriderthelawa>' - a mn of statiis."ds VAT- | There is no business dissolution but Merger or consolidation Both merger and consolidation result in the dissolution of a corporation and the transfer of the assets of the dissolved corporation to the absorbing corporation. In principle, the assets of the dissolved corporation should be considered deemed sold. Legally, however, the dissolution of a corporation is not a deemed sale. The nused input tax of the dissolved corporation as of the date of merger or jlidation shall be absorbed by the surviving corporation. d sold: ze of business activity from VAT-taxable status to VAT-exempt of a request for cancellation of registration due to reversion to of request for cancellation of registration due to a desire to ipt status after the lapse of 3 consecutive years from the tration by a person who voluntarily registered despite request for cancellation of registration of one who ess with the expectation of gross sales or receipt 00 but who failed to exceed this amount during the of operations| a. jar output VAT chapter 7 ™° tion of business, it shall bg | inthe caseiof eure orgent market price of the good jowever ‘ost = onto sequever is Owe lustration ie ed business operation Assume @ vate es with ty “Bookvalue. _Fair value P 50,000 -P.~ 50,000 Cash 120,000 120,000 Accounts receivables: 180,000 400,000 aire. pay 00/000 - aatn00. ries. 000 ‘ Property, plant and equipment ——800,000 Total assets 21,350.00 ~The output VAT on the deemed sale shall be computed as: “Inventories P 200,000 Property equipment 600,000 : Basis - P 800,000 Multiply by: 12% Bu 96,000 Determination of fair value ’ ‘The Commissioner of Internal Revenue.shall determine. the appropriate tax _base in cases where the: - on isa'deemedsale oss selling prices unreasonably lower Requirement for Subsequent Sale of Goods or Properties ent sale of goods or properties deemed sold shalll not be subject oe or Properties previously deemed sold shall umber wherein the output tax on the deemed taxpayers the até ‘2x paid on the items sold. or nike this is essential to avoid further imposition subsequent sale. This is also essential for the VAT on his purchase of, ‘goods previously VAT taxpayers only aid rules of deemed sales and the taxation ly to VAT taxpayers. These d0 0, ice of an equivalent provisionChapter 7— The Regular Output VAT Mlustration Uber Corporation, a non-VAT merchandising business, made the following sales and consignment during the month: sale of goods P 200,000 Sale of equipment 500,000 Consignment - 80 days old 100,000 The percentage tax shall apply only to the P200,000 sales of goods. The sale of equipment and the 80-day consignment is riot part of the sales of non-VAT persons. Billing Requirements for Output VAT The output VAT must be specifically indicated in the VAT invoice or receipt. It must be billed separately in the case of sales of properties where the fair value exceeds the selling price. Determination of the Output VAT The amount of output VAT is dependent upon the price quoted by the VAT taxpayer. Such amount is understood to be inclusive of the VAT in the 4 ice of a special agreement to the contrary. tion 1 2) P 150,000 VAT (P168,000 x 12/112) 18.000 (invoice price) ———> P__168,00 computational procedure is employed if: is agreed to be inclusive of VAT, or at the seller absorbs the VAT. accept an audit engagement to a client at a fee of P100,000. lusive of VAT. nd the output VAT which Mr. Pedro shall indicate in his computed as follows: of VAT) —> P 100,000 6) ——12.000 is employed if it is agreed that the client or= chapter7—The Repular OUPuE aa y billed pute on VAT not separately 5 in the document of sale, the selling py, inthe VAT I separately therein shall be deemed to be inclusive of ie vat. The ‘VAT shall be computed from the agreed price as a factor of 12/112. Incorrect billing of VAT : Incorrer incorrect ied the total amoune bile’ by the taxpayer shay be deemed inclusive of the VAT. The VAT shall be recomputed as a factor of 12/112. Mustration ss _AVAT seller invoiced a sale of goods as follows: "Selling price P 100,000 Output VAT e 10,000 2_110,000 IT should have been P12,000, computed as P100,000 x 12 et epee trite rom che ur 12/12; ence, PUL78S1. The PH,785.71 Output VAT shalChapter 7 - The Regular Output VAT CHAPTER 7: SELF-TEST EXERCISES Discussion Questions 1, Briefly discuss the tax base of the output VAT on the sales of goods. Briefly discuss the tax base of the output VAT on the sale of services. Discuss the tax base of the output VAT on the sales of properties. Enumerate the transactions deemed sales. a ais Illustrate the computation of VAT if the price is agreed upon as exclusive or inclusive of VAT. ee Pa 2 3. 4 5. ‘True or False 1 1, Sellers of services are subject to VAT on their gross sales or receipts. Sellers of goods are subject to VAT on gross receipts. Sellers of properties are subject to VAT on the fair market value of the property sold or disposed of. 4. Gross receipts include agency monies and bank loans received by the taxpayer. ‘i When the discount exceeds 30% of the actual market value, the selling price is considered unreasonably lower. ; If the selling price exceeds the fair value, the basis of the output VAT is the fair value. If the selling price is below fair value, the basis of the output VAT is the fair value. If the selling price is unreasonably lower, the basis of the output VAT is the selling price. "Gross receipt” means collections including evidences of indebtedness such as promissory notes given by the client. : Advances given by the client are included in gross receipts. Client expenses reimbursed by the client to the business taxpayer are part of gross receipt. 2 Out-of-pocket expenses of the service provider reimbursed by the client are ‘part of gross receipt. mnly dealers in real properties are subject to VAT on the sale of real Desir of the VAT, fair value of real property means the higher of nt appraisal value and zonal value. is based on the fair value of the property, the same is presumed ive of the VAT. installment sale of goods may be reported in installment. sale of real property is always reported in installment. t reporting of output VAT on services is as allowed so long as not exceed 25% of the agreed contract price.ginary assets Is subject to output Var, ere sale of properties CON oy, the deferred pee sale. a L = 3, The sale of real pr be subject to VAT sins months they are collected, installment DS es are subjectto VAT © 1s not subject to output VAT, Inert and oP sos sch 25 VES ed ordinary assets by tie & ‘capital assets i 4 of yperties consi ze The sonation ‘of business Fon "deemed sale”- > 5. The dovoummerisatransaction “GeSme" 4 -aje subject to output VAT, ‘The distribution of cash divident 7's the form of stocks of another tion of ry Is smpt from VAT. ‘The of, an et of debt is a deemed sales 10. transition sb soe payment of debt is subject to VAT as a deemed ; transaction. 411. Consignment is deemed sold if m 12. The consignee is subject to VAT on 43, The consignor Is subject to. VAT on the sales of consigned goods by its 44: The vatable inventories and properties of a VAT taxpayer upon retirement or cessation of business are subject to VAT as deemed sales. 15, The ouitput VAT on deemed sales upon retirement or tessation of business shall be based on the market price or cost of goods whichever is lower. 16, The commissioner shall determine the market value in cases of transactions E “ans aa and Sales with unreasonably lower gross selling prices. 3 change in corporate control over a cot “sa a Ta corporation is considered a deemed 18. When a business changes its trade name, vatable iter it oe aes : eae ms or properties in its 7 consolidation of a corporation with another corporation is not ot returned by the consignee in 30 days. the commission income on sales of he otsidered a deemed sale “transaction. mn two corporations shall result in’a deemed sale _ Mialtiple Choice Theory: Pait 1.”SSC ee Chapter 7 ~ The Regular Output VAT 2, Whatis the tax basis of the output VAT on sales of goods? a. Gross selling price b. Gross receipts c Fair value d. Fair value or gross selling price whichever is higher 3. Whats the tax basis of the output VAT on exchange of properties? a. Gross selling price q b. Gross receipts c. Fair-value of properties received d. Fair value or gross selling price whichever is higher 4. Whatis the tax basis of the output VAT on sales of real properties? “a. Selling price b. Gross receipts c. Fairvalue d. Fair value or selling price whichever is higher 5. Whatis the tax basis of the output VAT on sales of goods with unreasonably lower selling price? a. Gross selling price b. Gross receipts c. Fair value d. Fair value or gross selling price whichever is higher 6. Whatis the tax basis of the output VAT on installment sales? a. Gross selling price i b. Installment received c. Fair value of property sold d._ Fair value or gross selling price whichever is higher " Whats the tax basis ofthe output VAT on deemed sales? a. Gross selling price —Selling price _ 240,0 -None- 172,500 P 77,500 300,000 P 100,000 380,000 P 120,000 247Cash e £Pee sory note given by the Buyer d. Noneofthese " 11. hich snot considera in the determination of the fax base ofthe Var, sale of real 12, Which ofthe following is subject to the Output tax? a. Sale of books b. Sale of agricultural or marine food products ¢. Sale of non-food agricultural or marine products d._ Sale of educational services by a school 13. Which is subject to Output tax? a. Gross receipts of domestic common carriers by land b. Gross receipts of international common carriers ©. Gross receipts of banks r . Gross receipts of non-life insurance companies 14, Which is subject to the 12% regular output tax?’ fails ofresidential dwelling with P1,500,000 unit price Gross receipts from ent acanling with P15,000 monthly rentalChapter 7 The Regular Output VAT Multiple Choice - Theory: Part 2 1. Which of the following is subject to output tax if sold by a person not engaged in business? a. Sale of personal residence b. Saleofcar c. Sale of investment in stocks d. None of these 2. Which of the following when sold will result in an output VAT? a. Vegetables ~ b. Furniture c Fruits d. Rice 3. Areal property is sold by a dealer for P1,900,000. The property had a zonal value of P2,000,000, assessed value of P1,800,000 and independent appraisal value of P2,400,000. } Whatis the “gross selling price” for VAT purposes? a. P1,800,000 c. 2,000,000 b. P1,900,000 . 4. P2;400,000 /Which of the following is not subject to output tax when sold by a realty dealer? a. Sale of properties held for sale b. Sale of properties used in business c. Sale of investment in stocks d. Exchange of properties held for sale in settlement of debt The output VAT on the installment sale of property may be reported in installment if . the ratio of initial payment exceeds 25% of the selling price. _ the ratio of initial payment exceeds 25% of the fair value. c. ratio of initial payment does not exceed 25% of the selling price. the ratio of initial payment does not exceed 25% of the fair value. ition of property dividend en pago ent of goods when actual sale is made within 60 days of status as VAT taxpayer sales transaction subject to VAT? ‘business by a non-VAT taxpayer o of properties by a person not engaged in business ty dividend by a VAT taxpayer? 410. Which is a deemed sale transaction: Changein corporate name 1 b Merger or consolidation of corporations tire business) * Sat ofan investment by shareholder 11. Statement 1:.1f the output VAT is erroneously billed; the amount shown in the invoice is deemed exclusive of VAT. “Statement 2: If the output VAT is not separately indicated in the invoice, it shall be computed as 12/112 ofthe invoice price. Which statement is false? + a. Statement 1 c. Both statements _ +b. Statement2: >.> = -dNeither statement 12. Statement 4: By revenue regulation, the VAT shall be displayed from the selling price in thé invoice. é Sa re ‘Statement 2: If the seller faitéd to indicate the on i Se aaeed ie VAT on the invoice, the sale a Statement 1 ¢. Both: Staten ‘Statements i: : a 4. Neither statement }. Statement 1: 4 at iT 4 Statement 2: ae taxpayers are generally subject to the output tax. YM never pay the 12% output tax. Which statement is correct2, enenans »¢,Both statements Sas d.Neither statement 250kk... Chapter 7—The Regular Output VAT 44, Which is subject to the 12% regular output VAT? a. Sale ofsilver to the Bangko Sentral ng Pilipinas b. Sale of services to a non-resident person c. Sale of office supplies to the Asian Development Bank d. Export sale by anon-VAT taxpayer 45. Which of the following receipts from a domestic-common carrier are not subject to regular output tax? Receipts from transport of passengers by land Receipts from transport of cargoes by land Receipts from transport of passengers by sea Receipts from transport of cargoes by air Boop ‘Multiple-Choice - Problems: Part 1 1. Anon-VAT taxpayer sold goods for P20,000, half of which are paid by the buyer who gave a promissory note for the balance: The output VAT is a PO P2400 b. P1200 P4800 2. AVAT-taxpayer’sold goods for P40,000 which excludes a P1,000 delivery and VAT. The buyer paid P30,000 downpayment and promised to pay the P11,000 balance plus the VAT in 30 days. What is the output VAT? a P4920 P3600 b. P4,800 4.PO 3. A VAT-taxpayer compiled the following for the purpose of filing his BIR Form 2550M: ‘Sales to VAT taxpayers P 200,000 tonon-VAT taxpayers 150,000 P_350,000 ¢.P 24,000 .P 42,000 d car dealer sold the following goods to a relative: -P 300,000 500,000 251putVAT? —_- p-42,000 cot 4. P.60,000 reskydeater sod parE TOES following terms, avarrsisered P 2,000,000 (far value) __ = 200,000 song acount p1g00.000 compute reoutPetYAT 526,000 dP 240,000 seller sold various merchandise at wholesale Price, VaT-registered clusive ofVAT: » i P. . 300,000 total retail price [eta 0 P 270,000 Less: Cash discount (5%)* rer _ Netpprice due in 15 days P_256500 “if customer pays in 15 days Whats the output VAT? a PO .P 32,400 b. 30,780 .P36,000 ART 2 feet y cane eos dehewriog Summary of sales for the Sis tono i pes P 200,000 gompute the outpur var, 4. 18,000 tis a VAT. total of P 400,000 our gust °F “Hot Siopao". During the month Month he of Made @ tort 300,000 were paid by custome's C.P24,000 .P 42,000 collection of P420,000: inclusiveLS ee Chapter 7 - The Regular Output VAT Compute the output VAT. a P50,400 cP 36,000 b. P48,000 Po 9, AVAT-registered practicing lawyer disclosed the following during a month: Total professional fees billed P 800,000 Total professional fees collected 600,000 Advances by certain clients 200,000 Compute the output VAT. a P120,000 ¢.P-72,000 y b, P96,000 A. P88,286 10. A VAT-registered service provider prepared the following list of cash : collections during a month: & Gross receipts inclusive of VAT P 504,000 Client advances 200,000 Proceeds of bank loan __ 300,000 Total B014,000 _ - Gompute the output VAT. a P54,000 c. P 84,480 b. P78,000 dP 108,643 P 800,000 ——125.000 2_675,000 P79, 380 .P-70875 seller of goods reported the following during a month: P 500,000 early payment P 50,000 —20,000 ____70,000 P_430,000iy sy indicated an amount of P300,000 on, ‘the VAT thereon. hi) indicated the following in a VAT invoice evidencing Jan 5,000 .P6,520 d.P 6,720 compute the output VAT assuming P6720 : following invoced sales during the fst ut# Mwah... P P 280,000 347,200 s 313,600CEE chapter 7 - The Regular Output VAT What is the reportable output VAT respectively in March? a. P33,600; P 41,664; P 37,632 b. P33,600; P 41,664; P 112,896 ¢ P-30,000; P 37,200; P 33,600 a. P30,000; P 37,200; P 100,800 A real property dealer sold an agricultural lot for 2,500,000 following values: : January, February and with the 8 Appraisal value 3,000,000 Zonal value 2,000,000 ‘Assessed value 1,500,000 } Compute the output VAT. a, 180,000 c.P300,000 b. 240,000 d.P-360,000 9. AVAT-registered building contractor who reports under the’ calendar year pasis had the following billings and collections (inclusive of VAT) regarding its construction contracts: —Bill___ Collection June P 448,000 P 403,200 July 504,000 453,600 336,000 302,400 ‘What is the output VAT respectively in June and July? a, P53,760; P 114,240 c. P 43,200; P 91,800 -b, P48,000; P 54,000 d.P 43,200; P 48,600 e immediately preceding problem, what is the output VAT in August? c.P 36,000 d.P32,400 e realty dealer sold a residential lot for P2,000,000. The lot ir value of P2,500,000 at the date of sale. The buyer agreed to pay in thly installments starting June 2019. VAT respectively in June 2019 and july 2019? q c.P-15,000; P 15,000 d. P 12000; P 12,000developer sold a condominium yy, thly c ‘output VAT realty ayer agreed to pay in-36 2020, aNVATe soon, TH nyeiue of P4,000,000 and ase see The Practhe date ell ao FS Sake every installment? output VAT ON EE 10,000 i woe 13333 a PO. i ob Pa ercial building at a selling pri, realtor sold @ commerci ; red realtor sold 2 Or installments of P1,000,000, Sha SND pa eer owing 00000 re ear depicts ‘ 1,000,000 a Installment dv ¥ Plus: Output Ba44.000 Invoice price sold? Whatis the flr value ofthe Property $2200.00 :P30,000,000 | realtor sold a commercial land for P1,500,000 on November 2020. A 20% al ccna ‘and the balance was due in 20 monthly cor aentofP 60,000 starting December 2020. What is the output VAT respectively for November and the quarter ending December 2020? a P180,000;P180,000 - c.P,36,000; P7,200 b, P36,000;P43200' d. P180,000;P 0 5. A real property developer exchanged one of its land inventories with a - Zonal yalue-of P2,000,000.and assessed value of P1,500,000. for the stocks ‘of another corporation. What's the output VAT on the exchange? cP2: C Plowm RE “ P»200,000 ent sales! 300,000 mn sales (30 days lay *400,000- #2256ee Chapter 7— The Regular Output VAT Compute the output VAT. a. P24,000 ©. P72,000 b. P60,000 .P 108,000 7, A VAT-registered seller received the following statement from its consignees: Gross price P 500,000 Less: Commission (20%) 100,000 Freight charges 20,000, ___——_ Net remittance 2.380.000. What should be the output VAT on the'sales? - c P44,000 c.P 57,600 © d. P45,600 _ 4, P.60,000 8. A VAT-registered seller had the following summary of sales and consignments in April: Cash sales P 200,000 Credit sales 150,000 Sales reported by consignees 250,000 Unsold January consignment 50,000 Unsold February consignment 30,000 Unsold March consignment 40,000 Unsold April consignment 65,000 "Assuming that the rules on deemed sale was properly applied in prior months, what is the output VAT for April? a P42,000 cP 78,000 b. P75,600 d. P-81,600 in Corporation, a security dealer, declared the following dividends in 1,200,000 800,000 c.P 144,000 d.P240,000 ye years of persistent losses, Luigi Corporation decided to It had the following items in its possession uponVAT __ The Regular ¢ —Fairvalue.. chapter” Baskeo00 P 1,200,000 ts ae Reset 4,200,000 > 800,000 Inventories equipment -_ propertiesand ‘ron te deemed sale transaction. VAT Of W.P216,000 4. P240,000 problems: Part 4 professional. He also owns a hotel and ha, 4, Mr. Yaobang is ist . avi reir ed his accounting staff to indicate zr, tated sales in hotel receipts: During the month, he had the following receipts from his business ang a See 000,000 | Gross receipts from profession econ ) Gross receipts from hotel eS f Total 21,800,000 Compute the output VAT. a 70, ¢.P 120,000 b. P96,000 d.P216,000 2, Mang Juan applied for the cancellation ‘of his VAT registration. His i - ype as ected te BIR. At that time, he had the following | i Supplies, bought from non-VAT suppliers | Seppies bought om VAT suppl Sietcoc00 Merchandise, bought from VAT suppliers y it : 100,000 Merchandise, bought from non-VAT suppliers 20.000 i B_ 250,000 Sings emt te des ©.P 21,600 500 4.P 30,000 /AT-registered. farm supply dealer sold the following during a month:Chapter 7 — The Regular Output VAT ‘What is the output VAT? a P 234,000 . P'180,000 b. P 204,000 dP 144,000 _ 4, AVAT-registered bookstore had the following revenues during a month: Commission income on sales of books © P’' 300,000 Sales of books held as inventory 400,000 Sales of school supplies ——900.000, Total 24,600,000 Compute the output VAT. a P192,000 ¢.P 144,000 b. P156,000 .P 108,000 5. AVAT taxpayer made the following sales during the quarter: Domestic sales: Q Sales of VAT-exempt goods P 1,200,000 Sales of vatable goods 900,000 » > Export sales 800,000 What is the output VAT? a P348,000 ¢.P 204,000 b. P252,000 d.P 408,000" 6. Oval Corporation owns a coliseum which caters to large indoor events. The coliseum had the following receipts during a month: P 400,000 500,000 100,000 150,000 250,000 50,000 ——120.000 21,570,000 c. P 80,400 d.P 71,786 ented the following gross receipts during the quarter: * short term loans P 4,000,000 ~long-term loans 1,200,000. : 800,000 ——200,000 26,200,000 259output VAT ter 71h _ ne output VAT P:120,000 rf 4.P 744,000 107,143 air carrier with with both domestic and Internatio fi wa soatath ithad the following gross receipts; 40,000,000 12,000,000 30,000,000 8,000,000 ¢.P.6,240,000 d.P 10,800,000 ships traversing the islands of Bohol and has afleet of eS me during a month: Cebu. e 8,000,000 ‘a P-960,000 d.P 1,080,000 te the output VAT. cP 1,680,000 4.P 1,800,000 n isa non-VAT registered o nh perator of 40 taxis. During a™° receipt of P1,300,000 under the “boundary” syst®™ ©.P312,000 4. P 321,000 a - S SS paarat gl eee a tee 15.‘Chapter 7— The Regular Output VAT 12. A non-VAT registered radio broadcasting company collected a total of 800,000 during a month. Compute the output VAT. a te 0 cP 85,714 b. P48,000 4. P-96,000 13, AVAT-registered real property dealer sold the following during a quarter: House and Lot - 2B-A P 2,000,000 House and Lot - 2B-D 3,000,000 House and Lot - 2C-E 4,000,000 Residential Lot - 1A ‘ 1,000,000 Residential Lot - 2B" 2,000,000 Total sales 212,000,000 a the total output VAT. cP 1,080,000 > P 720,000 4. P 1,320,000 14, AVAT-registered dealer sold two residential units to the same buyer with the following separate prices: ‘House and Lot - 1C-A P 1,500,000 House and Lot - 1C-B 2,000,000 Whatis the output VAT? a PO .P240,000 7B -P190000 .P-420,000 5, AVAT-registered realty dealer sold the following adjacent residential lots to ‘the same buyer. The separate deeds of sale had the following respective d.P 204,000 company had the following gross receipts during a month: from|life premiums — P_1,800,000- 200,000 1,100,000 300,000