1st Final Departmental Examinations Reviewer

A.Y. 2023 - 2024

Subject Code: ACCO 20173

Course Subject: Business Tax

1. Which of the following statement(s) is true with regards to Value Added

Tax?

a) VAT is an indirect national tax levied on the value added in the production of a
good or service as it moves through various stages of production

b) VAT is a progressive tax

c) VAT is wholly the liability of the buyer to pay the tax

d) The payment of tax cannot be shifted or passed to the consumer

2. Which of the following statement(s) is/are true?

I: An unemployed student sold his/her iPhone15 Pro Max for P65,000. This
transaction is subject to VAT.

II: A VAT-registered person engaged in the business of selling goods who

sold his/her equipment used in business is subject to VAT as an incidental
transaction.

III: Importation of goods for personal consumption is not subject to VAT

provided that it will not be used for business purposes.

IV: A non-resident alien performs services in the PH even though not

engaged in a business (isolated transaction) is subject to VAT.

a) I, II and IV

b) II and IV

c) II and III
 d) All of the statements are true

e) None of the statements are true

3. In 2024, the spouses Kim and Chui have gross receipts and gross sales of
P2,850,000 and P2,200,000, respectively, which are derived from their
practice of profession and their trading business. Assuming they are not
VAT registered, will they be subject to VAT?

a) Yes, because their aggregate gross receipts/sales exceeded the VAT threshold of
P3,000,000.

b) No, because for purposes of VAT threshold, husband and wife shall be considered
as separate taxpayers.

c) Yes, because their gross receipts/sales are not specifically exempt from vat as
provided in the Tax Code.

d) None of the above.

4. Which of the following is correct?

a) An article may be subjected both to VAT and OPT.

b) An article may be subjected to VAT, OPT, and Excise Tax all at the same time and
in the same article or transaction.

c) An article may be subjected to either VAT or OPT while also being subjected to
Excise Tax.

d) None of the above.

5. Which of the following is incorrect?

a) A vat-taxable transaction may be exempt from VAT.

b) A taxpayer may have two transactions where one is subject to VAT and the other
is subject to OPT.
 c) An Excise Tax applies to neither VAT nor OPT.

d) None of the above.

6. Kwangya sari-sari store, NON-VAT, purchased alcoholic drinks from Naevis, a

NON-VAT manufacturer of alcoholic drinks with a gross sales of P5,000,000
for the year.

a) Kwangya is subject to VAT and excise tax; Naevis is subject to OPT and VAT

b) Kwangya is not subject to VAT but subject to excise tax; Naevis is subject to OPT
and excise tax

c) Kwangya is subject to OPT and excise tax; Naevis is subject to VAT only because
her Gross Sales exceeds P3,000,000.

d) Kwangya is subject to OPT; Naevis is subject to VAT and excise tax.

7. Which of the following statement(s) is/are true?

Statement 1: Sale of drugs and medicines of pharmacy run by the hospital to
outpatients are subject to VAT
Statement 2: Pharmacy items used in the performance of medical
procedures in hospital units such as the operating and delivery rooms and by
other departments are considered part of medical services rendered by the
hospital, hence, not subject to VAT

a) Only Statement 1

b) Only Statement 2

c) Both Statements are true

d) Both Statements are false

8. The following are VAT transactions, except:

a) Gross Receipts from lending activities to its members.

b) Gross Receipts from non-lending activities to its members.

c) Gross Receipts from non-lending activities to its non-members.

d) None of the above.

9. One of the following is not a transaction deemed sale:

a) Retirement from or cessation from business with respect to all goods on hand as
of the date of such retirement or cessation.

b) Distribution or transfer to shareholders or investors of goods or properties as

share in the profits of a VAT-registered person or creditors in payment of debt.

c) Transfer, use, or consumption not in the course of business of goods or properties

originally intended for sale or for use in the course of business.

d) Consignment of goods if actual sale is made within 60 days following the date
such goods were consigned.

10. Gross selling price includes all of the following except one:

a) Total amount which the purchaser pays to the seller

b) Total amount which the purchaser is obligated to pay to the seller

c) Excise Tax

d) Value-added Tax
11. All of the following are subject to zero rated VAT, except

a) Incoming flights of Domestic Common Carrier by Air or Sea

b) Sale of goods or services to Ecozones/ Tourism Enterprise Zones

c) A direct export by VAT registered entity which is paid in acceptable foreign

currency and accounted for in accordance with the rules and regulations of the
BSP.

d) Sale of power or fuel generated from renewable sources of energy.

12. Which of the following transactions may claim input VAT?

a) VAT paid on importation for personal use

b) VAT paid from VAT registered business evidenced by VAT invoices

c) VAT paid from VAT registered business evidenced by ordinary receipts

d) VAT paid by a NON-VAT person from VAT registered with VAT invoices.

13. A taxpayer who is not registered under the VAT system with a sales
exceeding 3 million is?

a) Optional VAT registration

b) Once registered under the VAT system, it shall be irrevocable for the next 5 years.

c) Is allowed to pay output VAT without the benefit of input VAT.

d) Cannot claim transitional input VAT once decided to register under the VAT
system.
14. Beginning 2021, what institution is required to deduct and withhold a
creditable vat of 5% on the purchase of goods or services subject to VAT?

a) National government or any political subdivision thereof

b) Government-owned or controlled corporations

c) Both (a) or (b)

d) Neither (a) or (b)

15. Which of the following importation is subject to value added tax?

a) Importation of machinery for the importer’s factory

b) Importation intended for resale

c) Importation for personal use of the importer

d) All of the above.

16. Which of the following statements is/are true?

I: Facilitation Fee paid is not included in landed cost in determining VAT on

importation.

II: Freight from customs house to warehouse is not included in landed cost
in determining VAT on importation but may claim input VAT.
 a) I only

b) II only

c) Both statements are true

d) Neither of the statements are true.

17. Ningning is engaged in a mixed transaction: ¼ is VAT exempt sales, ½ is

regular VAT subject sales and the remaining ¼ is VAT zero rated sales. There
is an amount of input VAT which is not traceable to any of her sales.
Assuming she opted for a tax refund on her input tax attributable to export
sales, what is the portion of input VAT that is creditable against output VAT?

a) 1/2

b) 1/4

c) 3/4

d) 100%

18. What is correct regarding the BIR Form 2550Q?

a) This return shall be filed and the tax paid within twenty five (25) days after the end of
each taxable quarter.

b) This return shall be filed and the tax paid within twenty five (30) days after the end of
each taxable quarter.

c) This return is also called the Annual Value-Added Tax Return.

d) None of the above.

19. Starting January 2023, the filing of monthly VAT return is:

a) Mandatory
 b) Not allowed

c) Optional only

d) Mandatory every last quarter of the taxable year

20. When shall Quarterly Percentage Tax Return be filed and paid?

a) Within 30 days after each taxable quarter

b) Within 25 days after each taxable quarter

c) Within 10 days after each taxable quarter

d) Within 5 days after each taxable quarter

21. Ms. Pinilit, a non-vat taxpayer whose annual sales is less than P3 million
from her grocery store, is required to pay?

a) Value-added Tax

b) Donor’s Tax

c) Estate Tax

d) Other Percentage Tax

22. Donam is a seller of agricultural food products who is VAT-exempt. His

annual gross sales during 2024 amounted to P3,000,000. To what business
tax is he liable?

a) 1% Percentage Tax under SEC 116 of the Tax Code

b) 12% Value Added Tax

c) 3% Common Carrier’s Tax under Sec 117 of the Tax Code

d) None of the above.

23. Kim Minjeong Airlines is an international air carrier engaged in the transport
of Passengers and Cargo from PH to abroad.

a) Gross Receipts from Passenger is VAT exempt while Cargo are subject to Common
Carriers Tax under Sec 118.

b) Gross Receipts from Passenger is VAT exempt while Cargo are subject to Common
Carriers Tax under Sec 117.

c) Gross Receipts from Passenger is VATABLE while Cargo is VAT exempt.

d) Gross Receipts from Passenger is ZERO RATED VAT while Cargo is tax exempt.

24. Which of the following statement(s) is/are true?

Statement 1: A franchise is a privilege to serve the public acquired by special
grants from private organizations
Statement 2: There are franchise holders whose gross receipts are subject to
12% VAT even if not vat registered.

a) Only Statement 1

b) Only Statement 2

c) Both Statements are true

d) Both Statements are false

25. Which of the following statement(s) is/are true?

Statement 1: Radio and/or television broadcasting whose gross receipts in
the preceding year did not exceed P10,000,000 shall have the option to
register for VAT which cannot be cancelled for the next 3 years
Statement 2: Radio and/or television broadcasting whose gross receipts in
the preceding year did not exceed P10,000,000 shall have the option to
register for VAT which cannot be cancelled or irrevocable
 a) Only Statement 1

b) Only Statement 2

c) Both Statements are true

d) Both Statements are false

26. Which of the following statement(s) is/are true?

Statement 1: Boxing Exhibitions shall be exempt if it is world oriental
championship one of the contender is a citizen of the Philippines and said
exhibitions are promoted by a citizen or citizens of the Philippines or by a
corporation which 60% or capital is owned by such citizens
Statement 2: Boxing Exhibitions shall be exempt if it is local championship
one of the contender is a citizen of the Philippines and said exhibitions are
promoted by a citizen or citizens of the Philippines or by a corporation which
50% or capital is owned by such citizens

a) Only Statement 1

b) Only Statement 2

c) Both Statements are true

d) Both Statements are false

27. Statement 1: All boxing exhibitions held in the Philippines shall be subjected
to amusement tax.
Statement 2: Admission charges to amusement places are required for the
imposition of amusement tax.

a) Both statements are correct.

b) Both statements are incorrect.

c) Only the first statement is correct.

d) Only the second statement is correct

28. What BIR form is used in filing Quarterly Percentage Tax Return?

a) BIR Form 2551Q

b) BIR Form 2550Q

c) BIR Form 2552Q

d) BIR Form 2553Q

29. The following transfers are subject to Documentary Stamp Tax (DST),
except:

a) Sale of shares of stocks

b) Sale of real properties

c) Donation of real properties

d) Inheritance of shares of stocks

30. Statement 1: The amount of Documentary Stamp Tax (DST) is either fixed or
based on par or face value of the document or instrument.
Statement 2: The tax return for DST shall be filed and the tax due shall be
paid at the same time within 10 days after the close of the month when the
taxable document was signed, issued, accepted, or transferred.

a) Both statements are correct.

b) Both statements are incorrect.

c) Only statement 1 is correct.

d) Only statement 2 is correct.

31. Ms. Una, non-VAT registered lessor of residential and commercial units had
the following date for the 1st quarter of 2021:

Gross
Receipts(1st
Quarter)

Lease of Residential Units

Monthly Rental of P13,000/Unit P2,500,000

Monthly Rental of P18,000/Unit 1,000,000

Lease of Commercial Units 2,300,000

Input Vat from suppliers 150,000

How much is the business tax due for the 1st quarter of Ms. Una?

a) P99,000

b) P174,000

c) P396,000

d) P246,000

32. Lola Moto, a senior citizen went to Mcdonalds to treat his 4 grandsons on
account of his retirement. Then consumed foods and beverages with a gross
amount of P1,120 inclusive of VAT. How much is the amount to be paid by
Lola Moto?

a) P896

b) P920
 c) P1,056

d) P1,110

33. Sale of P3,500,000 books covered by the United Nations Educational,

Scientific, and Cultural Organizations (UNESCO)

Printing of 500 copies of the “World Heritage Sites” book for P2,250,000

Publication of the book entitled “700 Science Experiments for Everyone”

worth P100,550

Sale of books for the principal purpose of paid advertisements of a specific

brand for P500,000

How much is/are the VAT-exempt transaction/s?

a) P5,850,550

b) P6,350,550

c) P6,350,000

d) P500,000

34. Benny, a business owner, has the following transactions:

Sale of goods to Senior Citizens 5,000,000

Sale of goods to PWDs 3,500,000
Sale of Gold to the BSP 15,000,000
Transport of Passengers by air from MNL to DAVAO 6,500,000

How much is exempt from VAT?

 a) P30,000,000

b) P8,500,000

c) P21,500,000

d) P23,500,000

35. The following are the data of Francois International for the last quarter of
2023

Sales up to Dec 15 (invoice value) P380,800

Purchases up to Dec 15(net) 150,000

Additional Information:
On December 16, 2023, the Company retired from its business and the
inventory valued at P190,000 remained unsold. There is a deferred input tax
from the third quarter of P3,500
How much is the total value-added taxes payable of Francois International?

a) P42,100

b) P21,500

c) P22,800

d) P19,300
36. Pinaasa Inc., a vat taxpayer, had the following data in a month:

Cash sales P200,000

Open account Sales 500,000

Consignment:

0 to 30 days old(on which there were 600,000

remittances from consignees of
P200,000)

31-60 days old 700,000

61 days old and above 900,000

How much is the output tax?

a) P348,000

b) P216,000

c) P264,000

d) P108,000

37. Karina, a VAT-registered real estate dealer, sold a real property with the
following terms of payment for Fiscal Year 2024 ending April:

Payments made by the buyer:

June 2024 of P700,000

November 2024 of P500,000
January 2025 of P2,200,000
July 2025 of P2,200,000

Selling price: P10,000,000

 Zonal value: P12,000,000
FMV per assessment: P9,800,000

What is the output tax to be declared and filed for the third quarter ending
January 2025?

a) P264,000

b) P388,800

c) P1,440,000

d) P324,600

38. Daehan, a vat-registered lessor of commercial units received P1,337,500

rentals during 2024 from various clients, net of the 5% creditable
withholding tax on rental income. How much is the correct output VAT?

a) P150,000

b) P142,500

c) P154,080

d) P160,500

39. Stannum Company had the following data for the 1st quarter of the current
year (VAT exclusive):

Taxable sales 600,000

Exempted sales 300,000
Zero-rated sales 100,000
Input tax which cannot be directly attributed to any of the above sales
50,000
 How much is the VAT Payable for the quarter if the input tax attributable to
zero rated sales is claimed as tax credits?

a) P42,000

b) P37,000

c) P32,000

d) P50,000

40. BTS Shell sold fuel to an international shipping carrier whose voyage is from
a port in the Philippines directly to a foreign port without docking or
stopping at any other port in the Philippines for P15,550,670. How much is
the output VAT?

a) P1,866,080

b) P1,799,100

c) P2,510,400

d) P0

41. Giselle Aeri, VAT-registered, had the following purchases for the first quarter
of 2024:

From Ae-Karina, VAT registered, per invoice 112,000

From Ae-Ningning, NON-VAT, net of tax 55,000
From Ae-Winter, VAT registered, net of tax 80,000
From Drama Corp, VAT registered, gross
(not supported by official receipt) 11,200
 How much Giselle Aeri may claim Input VAT?

a) P21,600

b) P23,040

c) P29,640

d) P28,200

42. Roi, the owner of the warehouse, which used to be vat exempt, because its
annual receipts never exceeded P3,000,000, decided to register under the
vat system on January 2, 2021. The following data were from the 1st quarter
ending March 31, 2021:

Rental from warehousing services, net of vat P336,000

Purchases of supplies in February, gross of vat 112,000

Inventory of supplies

Inventory of supplies, January 1, 2021 100,000

Vat on Inventory of supplies, January 1, 2021 10,000

How much was the vat payable for the quarter ending March 2021?

a) P26,320

b) P18,320

c) P14,000

d) P0
43. Katarinabluu, a VAT-registered manufacturer of refined sugar, had the
following data in 2024:

Sale of refined processed sugar, net of VAT 3,000,000

Purchase of raw sugar cane from farmers 600,000
Purchase of labels and packaging, gross of VAT 448,000
Advanced VAT paid before releasing from refinery 50,000

How much is the VAT still payable?

a) P228,240

b) P184,240

c) P238,000

d) P232,000

44. Mr. Pinagpalit, a VAT- registered trader has the following transactions during
2021:

Sale of goods to private entities, net of VAT P2,500,000

Purchases of goods sold to private entities, gross of 12% 896,000

VAT

Sale to a government owned corporation (GOCC), net of VAT 1,000,000

Purchase of goods sold to GOCC, net of VAT 700,000

How much is the VAT payable to BIR?

a) P190,000

b) P390,000

c) P204,000
 d) None of the above

45. Mingkuk, a VAT-registered trader, has the following transactions during

2020:

Sale of Goods to private entities, net of VAT 3,500,000

Sale to Government-Owned Corporation (GOCC), net of VAT 2,000,000
Purchases of goods sold to private entities, net of 12% VAT 800,000
Purchase of goods to GOCC, net of 12% VAT 700,000

How much is the Standard Input Tax and the VAT payable, respectively?

a) P150,000 , P430,000

b) P140,000 , P324,000

c) P130,000 , P530,000

d) P120,000 , P350,000

46. Aerichandesu company imported a non-essential article from South Korea.

The following are the invoice value and additional costs incurred in
connection with the importation:

Invoice ($1: P55) $5,500

Customs duty 5%
Insurance P15,000
Freight P4,500
Wharfage P8,000
Arrastre charges P7,500
Brokerage fee P20,000
Facilitation fee P2,000
Excise tax P17,000
 The company spent P56,000 gross of VAT for the trucking fee from customs
warehouse to its warehouse in Pasig City. The VAT on importation is:

a) P47,349

b) P54,243

c) P53,475

d) P46,755

47. Ning Yizhuo is a VAT-registered business engaged in a variety of

transactions. She had the following data during 1st quarter of 2024:

Regular Sales 4,000,000

VAT Exempt Sales 1,000,000
Export Sales 2,000,000
Sales to Government 3,000,000

Input VAT from regular sales 50,000

Input VAT from exempt sales 10,000
Input VAT from sales to gov’t 40,000
Input VAT from export sales 30,000
Input VAT not traceable to any of her sales 20,000

All of the amounts are VAT exclusive. Assuming all input VAT related to
export sales was refunded, the VAT still payable and due is?

a) P586,000

b) P540,000

c) P732,000

d) P930,000
48. Comprehensive Problem:
JUSTIN Corporation, a manufacturer of mackerel in a can, decided to register
under the VAT system for the first time starting January 2024. The following
data are the result of operations for the first taxable quarter of 2024:

Sales data:
Sale of mackerel to VAT-reg wholesaler (net), P15,000,000
Sale of mackerel to NON-VAT wholesaler (per invoice), P5,600,000
Sale of mackerel to Pasig City, gross of VAT, P2,800,000
Export of mackerel to South Korea, P8,500,000

Purchases data: (VAT inclusive)

Purchases of raw mackerel from a fishermen P5,600,000
Purchases of raw agricultural inputs P1,120,000
Purchases of other materials P2,240,000
Purchases of tin cans P896,000

Other data: (net of any tax)

Mackerel donated to a victim of typhoon, P500,000
Consignment of mackerel not returned within 60 days, P300,000

Inventory per balance sheet, January 1, 2024: (VAT inclusive)

Materials purchased from VAT-reg store P448,000
Supplies from NON-VAT supplier P1,600,000

VAT paid in January and February P1,220,000

Assuming input tax attributable to export sales was used as a tax credit
against output tax and the corporation opted to file optional 2550M
(monthly VAT return), the VAT still payable and due is?

a) P1,220,200

b) P1,022,200
 c) P1,268,680

d) P988,088

49. Monica, a VAT taxpayer, is engaged in mixed transactions:

Exempt Sales Export Sales Regular Sales

Output VAT n/a - 300,000

Input VAT 12,000 36,000 200,000

What is the creditable input vat?

a) P200,000

b) P248,000

c) P236,000

d) P0

50. Spicy company is a small hair salon business located on the streets of REAL
WORLD. It had the following data for the 3rd quarter of 2024:

Collections from the services rendered last month of the prior quarter,
P20,000

Income statement this quarter:

Net income, P152,000
OPEX, P63,000
Cost of services, P235,000
Service Revenue this quarter is all cash basis.There is no A/R billed on this
quarter.
 Journal entry made for the advanced collection of services to be render in
the first month of the next quarter:
Cash 30,000
Unearned Service Revenue 30,000

Percentage tax paid previous quarter, P12,800

Determine the percentage tax payable under Sec 116 of the tax code.

a) P4,560

b) P14,100

c) P15,00

d) P2,200

51. Kryz Company, non-vat registered, has the following transactions:

Transport of passengers by land 1,800,000

Transport of goods and cargoes by land 1,570,000
Transport of passengers by air 1,250,000
Transport of goods and cargoes by sea 1,660,000

How much is the common carriers tax?

a) P54,000

b) P55,000

c) P56,000

d) P158,000

52. A franchisee, had the following data on revenues and receivables in 2022
covered by the franchise:
 Revenues 4,000,000
AR, beg. 600,000
AR, end 800,000

What is the correct franchise tax if the franchisee is a radio television

broadcasting company and a gas and water utility company, respectively?

a) P115,000 , P77,000

b) P113,000 , P75,000

c) P114,000 , P76,000

d) P112,000 , P74,000

53. Lucid Dream Telephone Company had the following data for the first quarter
of 2024:

Telephone call billings:

Manila to Cebu 56,000
Manila to South Korea 88,000
South Korea to Manila 56,000

All of the amounts are tax included, how much is the Overseas
Communications Tax to be remitted by Lucid Dream Telco, if any?

a) P8,800

b) P8,000

c) P14,400

d) P0 VAT
54. December 1, 2015, Samantha borrowed P1,000,000 from BDO payable
within 10 years. The loan pays an annual interest of P100,000 payable every
December 1 beginning December 1, 2016. On December 1, 2020, Samantha
pre-terminated the loan by repaying the principal in full. The gross receipts
tax still due from BDO due to the pre-termination in 2020 is

a) P5,000

b) P16,000

c) P21,000

d) P25,000

55. A domestic insurance company gave the following Information for the
month:

Gross receipts from its insurance policies Premium on life

insurance policies

Premium on life insurance P 2,100,000

Premium on non-life insurance 1,500,000

Gross receipts as agent of a non-resident foreign

insurance co

Premium on non-life insurance P4,000,000

Premium on property insurance 1,000,000

The percentage tax due for the month is:

a) P355,000

b) P430,000

c) P242,000
 d) P605,000

56. SM Town Coliseum Arena had the following gross receipts for the first
quarter of 2024:

Professional basketball P10,350,000

Amateur basketball P3,565,800
Professional boxing P8,000,000
Padis comma day/night club P7,600,000
Tickets from concert of aespa, sold out P15,000,000
Billiards and bowling P3,675,000

Professional boxing is composed of professional boxers: Yu Jimin - South

Korean, and Minjong Taglamig - Filipino. They are fighting for an
international title and the promoter is a Filipino.

Determine the Amusement tax due under Sec 125 of the tax code.

a) P2,920,500

b) P4,255,370

c) P3,455,370

d) All of the above is false. The only way to answer is by doing the opposite.

57. Lalisa purchased horse racing tickets amounting to P6,000. Fifty-percent

(50%) of the tickets purchased won double, entitling her a prize of P60,000.
How much cash should be given to Lalisa by the operator?

a) P54,720

b) P55,820
 c) P56,820

d) P57,720

58. In 2021, Bing bong invested P5,500,000 in the shares of stock of Shriek
Corporation. The corporation's shares are listed and are traded in the local
stock exchange. Trillanes subsequently sold the shares in 2022 for
P5,000,000 through the local stock exchange.

The percentage tax on the sale is:

a) P15,000

b) P25,000

c) P30,000

d) P50,000

59. Better things corporation manufactures non-essential products. During the

quarter, the product has a selling price of P3,040,000 before any tax and a
VAT of P422,400. How much is the excise tax?

a) P0

b) P304,000

c) P480,000

d) P352,000

60. Omega Corporation, a newly formed corporation organized and established

in the Philippines, issued shares of stocks to one of its incorporators, Ms.
Santiago, for P350,000 on March 1, 2021. The par value of the stocks issued
is P300,000. How much is the documentary stamp tax?

a) P2,000
b) P3,000

c) P4,000

d) P5,000

Summary of Answers

1. A 31. C

2. B 32. C

3. B 33. A

4. C 34. D

5. C 35. A

6. D 36. B

7. C 37. B

8. A 38. A

9. D 39. B

10. D 40. D

11. A 41. A
12. B 42. B

13. C 43. C

14. C 44. A

15. D 45. B

16. C 46. D

17. A 47. A

18. A 48. B

19. C 49. C

20. B 50. D

21. D 51. A

22. D 52. C

23. A 53. B

24. B 54. C

25. B 55. C

26. B 56. A

27. B 57. D

28. A 58. C

29. D 59. C

30. C 60. B
 Summary of Answers – Explained

1. (A)
2. (B) I: It must be engaged in the business of selling iPhones and VAT registered or even
NON-VAT but the annual sales exceed P3M.
III: Importation whether for personal or business use is subject to VAT
3. (B): The husband and wife are considered or treated as separate taxpayers, hence, the
threshold of P3,000,000 should be based on their individual gross receipts/sales.
4. (C): VAT and OPT cannot be subjected to the same subject or transaction. Excise Tax is
in addition to VAT or OPT.
5. (C): A: The sale of an article not exempt from VAT is not subject to VAT if the seller is not
VAT registered and the amount of annual sales or receipts is equal to or less
than the VAT threshold. - Correct
B: The taxpayer or seller is engaged in mixed transactions. - Correct
C: Excise Tax is in addition to VAT or OPT.
6. (D): Only manufacturers/producers of non-essential goods/services are subject to excise
tax.
Naevis, though a NON-VAT, is subject to VAT because its gross sales exceeds P3M.
7. (C)
8. (A): Gross receipts from lending activities by credit or multi-purpose cooperatives duly
registered with the Cooperative Development Authority (CDA) are VAT-exempt. The
exemption is not only limited to the gross receipts on loans extended to its members but
also to other persons who are not members.
9. (D): Item D is an actual sale. It will be considered as transaction deemed sale if the
actual sale of the consigned goods is made beyond 60 days following the date such
goods are consigned.
10. (D)
11. (A): Only outgoing flights are subject to zero rated VAT. Incoming flights are not taxable
in the PH.
12. (B)
13. (C)
14. (C)
15. (D): Generally, all importations, regardless of purpose, are subject to VAT unless
exempt under the law.
16. C: Invoice price + customs duty + excise tax, if any + other chargers before releasing to
customs warehouse like insurance, freight, etc. = LANDED COST x 12% = VAT on
importation
Freight from customs house to warehouse are charges after releasing from customs
warehouse, thus, not included in computation of LANDED COST.

17. (A): There is no input VAT on ¼ VAT exempt sales

The ¼ VAT attributable to zero rated sales are refunded and therefore not claimable as
deduction against output VAT.

18. (A): BIR Form 2550Q shall be filed and the tax paid within twenty five (25) days after
the end of each taxable quarter.
19. (C)
20. (B)
21. (D)
22. (D): Percentage tax rate under Sec 116 of the Tax Code, as amended, are as follows:
● Prior to July 1, 2020 = 3%
● From July 1, 2020 to June 30 2023 = 1%
● From June 30, 2023 to Present = 3%
23. (A)
24. (B)
25. (B)
26. (B)
27. (B)
28. (A)
29. (D)
30. (C): The tax return for DST shall be filed and the tax due shall be paid at the same time
within 5 days after the close of the month when the taxable document was signed,
issued, accepted, or transferred.
31. (C) (P3,300,000X12%) = P396,000
32. (C)
Amount allocated to Grandsons = 1,120 X ⅘ = P896
Amount allocated to Lola Moto = 1,120 X ⅕ /1.12 X 80%= P160
Amount to be paid by Lola Moto = P895 +160 = P1,056

33. (A) P5,850,550

3,500,000 + 2,250,000 + 100,550 = 5,850,550
 Sale, importation, printing, or publication of books, and any newspaper, magazine,
journal, review bulletin, or any such educational reading material covered by UNESCO
are exempt from VAT, including the digital or electronic format of importing educational,
scientific, and cultural materials. Provided, that the materials enumerated herein are not
devoted principally to the publication of paid advertisements. (Sec. 109)

34. (D) P23,500,000

Sale of goods to Senior Citizens - Exempt
Sale of goods to PWDs - Exempt
Sale of Gold to the BSP - Exempt
Transport of Passengers by air from MNL to DAVAO - subject to VAT

35. (A)

OUTPUT VAT

Sales up to Dec. 15= 380,800/1.12X12 P40,800

Transaction Deemed Sales= 190,000X.12 22,000

INPUT VAT

On purchases = 150,000X.12 (18,000)

Deferred input vat (3,500)

VAT PAYABLE P42,100

36. (B)

Cash sales P200,000

Open account Sales 500,000

0 to 30 days old remittances from consignees 200,000

61 days old and above 900,000

Total P1,800,000

X Vat rate 12%

Output Vat P216,000

37. (B)

June 2024 Payment 700,000

November 2024 Payment 500,000
Initial Payment 1,200,000
Divided by: Selling Price 10,000,000
Ratio of Initial Payment = 12%

Output VAT is: (12M zonal x 12%) P1,440,000

November to January: (3rd quarter cumulative output VAT)

November: (1,440,000 x 500k/10M) 72,000
December: -
January: (1,440,000 x 2.2M/10M) 316,800
Output VAT in 3rd quarter 388,800

As a rule, if the ratio of initial payment to selling price does not exceed 25%, it is qualified
as installment sales, thus, the output VAT of P1,440,000 is also payable through
installment. If the ratio exceeds 25%, the entire P1,440,000 is payable in June 2024
(Also known as cash and deferred sale).

Initial payment includes all payments “within the year of sale” (Down Payment +
installment payments within the year + excess of mortgage over cost, if any)

Note: Installment output VAT is only applicable on the sale of “Real properties” by
VAT-subject real estate dealers. If it’s not the sale of real properties, there is no
installment output VAT.
 38. (A) P150,000

Amount received 1,337,500

Divide by (95% net + 12% VAT) 1.07

Gross Rental Income exclusive of VAT 1,250,000

VAT Rate 12%

Output VAT 150,000

39. (B)

On taxable sales (600,000 x 12%) P72,000

On zero-rated sales (100,000 x 0%) 0

Output tax P72,000

Less: Input tax (700,000/1,000,000 x 50,000) P35,000

VAT payable P37,000

40. (D) P0

Gross Sales 15,550,670

Zero Rate 0%

Output VAT 0

Sale of fuel to persons engaged in international shipping or air transport operations is

considered as a zero-rated transaction, provided that the goods, supplies, equipment
and fuel shall be used exclusively for international shipping or air transport operations.

41. (A)
 From Ae-Karina (112k x 12/112) 12,000
From Ae-Winter (80k x 12%) 9,600
Total Input VAT 21,600

There is no input VAT from Ae-Ningning since she’s NON-VAT, there is no VAT passed
on the purchases of Giselle Aeri.
Not allowed to claim input VAT from Drama Corp since it is not evidenced by VAT invoice
or OR.

42. (B)

Output Vat(P336,000X12%) P40,320

Input Vat

Purchases of supplies in February(P112,000/1.12X.12) (12,000)

Transitional Input Vat-higher amount between actual input vat of (10,000)

(P10,000 vs. P100,000 x 2%)

Vat payable P18,320

43. (C)

Output VAT (3M x 12%) 360,000

Presumptive Input VAT (600k x 4%) (24,000)
Regular Input VAT (448k x 12/112) (48,000)
VAT Payable 288,000
Advanced VAT paid (50,000)
VAT still payable 238,000

44. (A)
Output Vat (P2.5 +1M) X 12% P420,000

Less: Actual input VAT on purchases (180,000

5% withheld by the goverment (50,000)

VAT Payable P190,000

45. (B) P140,000 , P324,000

Output VAT (3,500,000+2,000,000)*12% 660,000

Input VAT:

Standard Input Tax (2,000,000*7%) (140,000)

On purchases of goods (800,000*12%) (96,000)

5% Withholding from the government (2,000,000*5%) (100,000)

VAT Payable 324,000

46. (D)

Invoice ($5,500 x P55) 302,500

Customs duty (302.5k x 5%) 15,125
Insurance 15,000
Freight 4,500
Wharfage 8,000
Arrastre charges 7,500
Brokerage fee 20,000
Excise tax 17,000
Landed Cost 389,625
VAT rate x 12%
VAT on Importation 46,755
47. (A)

Regular Sales (4M x 12%) 480,000

Export Sales (2M x 0%) 0
Sales to Government (3M x 12%) 360,000
Total output VAT 840,000
Less: input VAT
Regular sales (50,000)
Sales to gov’t (40,000)
Not traceable - regular (20k x 4/10) (8,000)
Not traceable - gov’t (20k x 3/10) (6,000)
VAT Payable 736,000
Creditable Withholding VAT (3M x 5%) (150,000)
VAT payable and still due 586,000

48. (B)

Output VAT:
To VAT-reg wholesaler (15M x 12%) 1,800,000
To NON-VAT wholesaler (5.6M x 12/112) 600,000
To Pasig City (2.8M x 12/112) 300,000
Export to South Korea (8.5M x 0%) 0
Donated - deemed sale (500k x 12%) 60,000
Consignment - deemed sale (300k x 12%) 36,000 [60 days]
Total output VAT 2,796,000

Less: Input VAT:

Presumptive (1,120,000 x 4%) (44,800)
Other materials (2,240,000 x 12/112) (240,000)
Tin cans (896,000 x 12/112) (96,000)
*Transitional input VAT (48,000)
VAT Payable 2,367,200

Less: VAT credits

Creditable Withholding VAT (2.8M / 1.12 x 5%) (125,000)
VAT paid previous months (1,220,000)
VAT still payable and due 1,022,200
 *Materials purchased from VAT-reg store (448k / 1.12 x 2%) 8,000
Supplies from NON-VAT supplier (1.6M x 2%) 32,000
Total 40,000
Versus: Actual input VAT (448k x 12/112) 48,000
Allowed as transitional input VAT (higher) 48,000

49. (C) P236,000

Input VAT attributable to export sales 36,000

Input VAT attributable to regular sales 200,000

Total Creditable Input VAT 236,000

50. (D)

Collections, prior quarter P20,000

This quarter: (workback method)
Net income 152,000
OPEX 63,000
Cost of services 235,000
Gross receipts 450,000 450,000
Advanced collections 30,000
Total Collections 500,000
Tax rate x 3%
Percentage tax payable P15,000

The tax base of OPT are collections or gross receipts for sale of services.
If the problem is silent, not VAT-registered, unless the gross receipts exceed P3M.
The Gross receipts computed through workback are all cash gross receipts.
The percentage tax paid from the previous quarter of the same taxable year are not creditable
against current quarter since OPT and even VAT are filed quarterly which the balance is not
cumulative.

If the problem is silent, it is subject to the graduated income tax table, hence subject to OPT. If it
is taxed under 8%, the OPT is P0 (exempt).

IMPORTANT NOTE (UPDATED ABOUT TAX LAW): due to newly tax law signed by the
President on January 4, 2024: RA 11976 “Ease of Paying Taxes Act” - the tax base of VAT
and OPT when it comes to sale of services is now “Gross Sales”, meaning all revenue
whether collected (gross receipts) or not, is now taxable. The taxation of sale of goods
and sale of services has now the same treatment.

Since there is still no RR from BIR, you may still use the old law (Gross
receipts/collections as tax base for sale of services) for departmental examination
purposes.

51. (A) P54,000

Transport of passengers by land 1,800,000 * 3% = 54,000

52. (C) P114,000 , P76,000

Revenues 4,000,000

AR, beg. 600,000

AR, end. (800,000)

Collections 3,800,000

Franchise Tax rate 3%

Franchise Tax 114,000

Revenues 4,000,000
 AR, beg. 600,000

AR, end. (800,000)

Collections 3,800,000

Franchise Tax rate 2%

Franchise Tax 76,000

53. (B)

88,800 / 1.10 x 10% = 8,000

Manila to Cebu (domestic calls) are vatable

South Korea to Manila (incoming calls) are not taxable in the PH

54. (C) P21,000

55. (C)
56. (A)

Professional basketball (10,350,000 x 15%) 1,552,500

Padis comma day/night club (7.6M x 18%) 1,368,000
Total Amusement tax due 2,920,500

Amateur basketball is subject to local amusement tax

Professional boxing is exempt since it meets the 3 requisites for exemption
Tickets from concert of aespa are subject as well to local amusement tax
Billiards and bowling are VATABLE

57. (D) P57,720

Gross Winnings 60,000

Less: Tax on Winnings

Gross Winnings 60,000

Cost of Winning tickets (6,000*50%) (3,000)

Net Winnings 57,000

4% (2,280)

Amount to be paid to Lalisa 57,720

58. (C) P30,000
(Stock Transaction Tax = P5M x 006 = P30,000)

59. (C)

VAT 422,400
Divide: VAT rate / 12%
SP after excise tax 3,520,000
SP before any tax (3,040,000)
Excise tax 480,000

Take note that the excise tax is included in the tax base of VAT.
Total manufacturing costs (DM+DL+OH) + mark up + excise tax = SP x 12% = VAT

60. (B) P3,000

Par Value of the shares issued 300,000

Divided by 200

1,500

DST rate 2

DST Due 3,000