Chapter 2 Problems and Solutions
Joy, Inc. purchased the following from abroad: Sea shells and coral decors – P650,000; Fresh
tuna and salmon – P250,000. What is the total amount of taxable importation? (answer must
all be numbers, no comma, no peso sign and no decimals)
650000 (just the sea shells and coral decors as these are nonfood items)
Love imported various personal and household effects with a value aggregating
P500,000. P420,000 of these was subject to 8% customs duty by the BOC. What is the vat on
importation? (answer must all be numbers, no comma, no peso sign and no decimals)
54432 Importations subjected to customs duty 420000
Add: Customs duty (420,000 x 8%) 33600
Total tax base 453600
X VAT rate 12%
VAT amount 54432
A bookstore company imported the following items (all excluding VAT): Books – P700,000;
professional instruments – P400,000; School supplies – P800,000. What is the VAT on
importation? (answer must all be numbers, no peso sign, no comma & no decimals)
144000 Professional instruments 400000
Add: School supplies 800000
Total tax base 1200000
X VAT rate 12%
VAT amount 144000
Mr. Peace, a VAT-registered food retailer, imported the following from China: Fruits – P750,000;
Vegetables – P540,000; Frozen meat -P150,000; Marinated milkfish – P300,000. What is the VAT
on importation? (answer must all be numbers, no peso sign, no comma & no decimals)
36000 (just the marinated milkfish – 300,000 x 12% = 36000)
Ms. Amiable imported various merchandise from abroad. The importation was invoiced at
$5,000. She also incurred the following costs of importation: Insurance – P4,000; Freight –
P15,000; Wharfage fee – P4,000; Arrastre charge – P7,000; Brokerage fee – P8,000; Facilitation
fee – P5,000; Customs duties P24,000 and excise tax – P18,000. The applicable exchange rate
was P51.00: $1. What is the VAT on importation? (answer must all be numbers, no peso sign,
no comma & no decimals)
40200 Invoice amount in pesos ($5000 x P51) 255000
+ Insurance 4000
+Freight 15000
+Wharfage fee 4000
+Arrastre charge 7000
+Brokerage fee 8000
+Customs duties 24000
+Excise tax 18000
Total tax base 335,000
X VAT rate 12%
VAT amount 40200
Facilitation fee of P5,000 is not included as it is an illegal payment.
Golden Arches is licensed franchisee of Mcdo, a non-resident franchisor. If Golden paid
P7,500,000 royalties (ex-VAT), VAT is (answer must all be numbers, no peso sign, no comma
& no decimals)
900000 (7500000 x 12%)
Pacman imported a brand-new Jaguar, 2018 model for his wife. Total landed costs is P15M,
exclusive of P3M custom duties, P2M excise tax & P1M facilitation fee. VAT payable is how
much? (answer must all be numbers, no comma, no peso sign & no decimals)
2400000 Total landed cost excluding other charges 15000000
+Customs duties 3000000
+Excise tax 2000000
Total tax base 20000000
X VAT rate 12%
VAT amount 2400000
Facilitation fee of P1M is not included as it is an illegal payment.
World Power Corp. imported an article from Japan. The invoice value was $7,000 ($1=P50). The
following additional costs were incurred: Insurance – P15,000; Freight – P10,000; Postage –
P5,000; Wharfage – P7,000; Arrastre charges – P8,000; Brokerage – P25,000; Facilitation – P3,000;
Customs duty – P50,000; Excise tax – P30,000. The company likewise spent P50,000 for trucking
fee from customs warehouse to its warehouse in Quezon City. The career is a VAT-registered
entity. VAT on importation is how much? (answer must all be numbers, no peso sign, no
comma & no decimals)
60000 Invoice value in pesos ($7000 x P50) 350000
Insurance 15000
Freight 10000
Postage 5000
Wharfage 7000
Arrastre charges 8000
Brokerage 25000
Customs duty 50000
Excise tax 30000
Total tax base 500000
X VAT rate 12%
VAT amount 60000
Facilitation fee of P3,000 is not included as it is an illegal payment. Trucking fee of
P50,000 from customs bonded warehouse to company’s warehouse is no longer part of the
tax base.
