1

CPA Review School of the Philippines

Manila
VALUE ADDED TAX Dela Cruz / De Vera / Llamado

1. One of the following statements is incorrect

a. Imported goods which are subject to excise tax are no longer subject to VAT.
b. VAT on importation is paid to the Bureau of Customs before the imported goods are released
from custody.
c. Expenses incurred after the goods are released from Customs custody are disregarded in
computing the VAT on importation.
d. When a person who enjoys a tax-exemption on his importation subsequently sells in the
Philippines such imported articles to a non-exempt person, the purchaser-non-exempt person
shall pay the VAT on such importation.

2. Which of the following input taxes can be refunded, converted into tax credit certificates or carried
over to the next quarter at the option of the VAT-registered taxpayer?
a. Input tax on raw materials
b. Input tax on importation of supplies
c. Input tax attributed to zero-rated sales of goods and services
d. Input tax on purchase of services

3. Value Added Tax is a/an

a. Indirect tax
b. Direct tax
c. Local tax
d. Personal tax

4. Statement 1- A taxpayer whose gross sales or receipts exceeded the amount of P3,000,000 shall
pay VAT even if he is not VAT registered; consequently, he is also entitled to input taxes.
Statement 2- Importer of goods for personal use is not subject to VAT if he is not-VAT registered.
a. Both statements are true
b. Both statements are false
c. Only statement 1 is true
d. Only statement 2 is true

5. Which statement is correct?

a. Zero rated sales are exempt from the VAT.
b. A person whose sales or receipts do not exceed P250,000 is exempt from VAT and OPT.
c. A person who issues a VAT invoice on a VAT exempt transaction is nevertheless subject to
VAT on the said transaction.
d. Entities which are exempt from income tax are also exempt from VAT.

6. Which of the following importation is subject to VAT?

a. Importation of frozen meat
b. Importation of bamboo poles
c. Importation of drugs, vaccines, and medical devices for COVID-19 treatment.
d. Importation of grapes for sale

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7. Which of the following is subject to VAT?

a. Sale of smoked fish
b. Sale of lechon
c. Sale of vitamin supplements
d. Sale of newspaper
e. Sale of drugs for diabetes, high cholesterol, hypertension, cancer, mental illness, TB, and kidney
diseases

8. One of the following is not a major business internal revenue tax in the Tax Code
a. VAT
b. Excise Tax
c. Income Tax
d. Percentage Tax

9. The allowable transitional input tax is

a. The lower between 2% of the value of beginning inventory or actual VAT paid on such inventory
b. The higher between 2% of the value of beginning inventory or actual VAT paid on such
inventory
c. The actual VAT paid on the beginning inventory
d. 2% of the value of beginning inventory

10. The VAT due on the sale of taxable goods, property and services by any person whether or not he
has taken the necessary steps to be registered
a. Input tax
b. Output tax
c. Excise tax
d. Sales tax

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

a. Transfer, use or consumption not in the ordinary course of business, of goods or properties
originally intended for sale or for use in the course of business
b. Distribution or transfer to shareholders or investors of goods or properties as share in the profits
of a VAT-registered person or to creditors in payment of debt
c. Retirement from or cessation of business, with respect to inventories of taxable goods on hand
as of the date of such retirement or cessation
d. Consignment of goods if actual sale is made within 60 days following the date such goods were
consigned

12. One of the following is not an activity subject to VAT

a. Sale in retail of goods by a dealer
b. Sale of bamboo poles by a dealer
c. Sublease of real property in the course of business
d. Importation of ordinary feeds for poultry chicken

13. J. Torres made the following sales during the year:

Sales, VAT-taxable transactions ₱1,960,000

Sales, VAT zero-rated transactions 1,990,000
Sales, VAT-exempt transactions 540,000
Total ₱4,490,000

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Is he required to VAT-register?

(a) YES. The VAT-taxable and VAT zero-rated sales total ₱3,950,000 (₱1,960,000 +
₱1,990,000) which exceeds the minimum turnover of ₱3,000,000.
(b) NO. The sales from VAT-taxable transactions do not exceed the threshold of ₱3,000,000.

14. Which of the following is not correct?

I. Any person who is not subject to mandatory registration because his actual or expected gross
sales/receipts from non-exempt businesses for the past 12 months do not exceed ₱3,000,000,
may opt to register under the VAT system, but shall not be allowed to cancel his VAT
registration for the next three years.
II. Any person who is VAT-registered but enters into transactions which are exempt from VAT
may opt that the VAT apply to his transactions which would have been exempt but shall not be
allowed to cancel his VAT registration for the next three years.
III. Franchise grantees of radio and/or television broadcasting whose annual gross receipts of the
preceding year do not exceed P10M may opt for VAT registration, but shall not be allowed to
cancel his VAT registration for the next three years.
a. III only
b. II only
c. I only
d. I, II and III

15. (a) Before January 1, 2021, which of the following sales of real properties held primarily for sale to
customers shall NOT be subject to VAT?
a. Sale of parking lot where the selling price is P1,800,000
b. Sale of 2 adjacent residential lots in favor of one buyer from the same seller at P725,000 per lot.
c. Sale of condominium unit at a price of ₱2,600,000.
d. None of the above

Before January 1, 2021, the VAT exemption shall only apply to the following sales of real properties:

(a) Real property not primarily held for sale or for lease in the ordinary course of business;
(b) Real property utilized for low-cost and socialized housing;
(c) Residential lot valued at ₱1.5 Million and below;
(d) House and lot and other residential dwellings valued at ₱2.5 Million and below.

IF 2 or more adjacent residential lots are sold in favor of 1 buyer by the same seller, for the purpose
of using the same as 1 residential lot, the sale shall be exempt if the aggregate value of the
properties do not exceed ₱1.5 Million.

15. (b) Beginning January 1, 2021, which of the following sales of real properties held primarily for sale to
customers shall NOT be subject to VAT?
a. Sale of parking lot where the selling price is P1,800,000
b. Sale of 2 adjacent residential lots in favor of one buyer from the same seller at P725,000 per lot.
c. Sale of condominium unit at a price of ₱4,000,000.

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d. None of the above

Beginning January 1, 2021, the VAT exemption shall only apply to the following sales of real properties:

(a) Real property not primarily held for sale or for lease in the ordinary course of business;
(b) Real property utilized for socialized housing;
(c) House and lot and other residential dwellings with a selling price of not more than ₱3,199,200.

16. ABC Restaurant recorded the following sales during the month (based on menu prices):
To regular customers P 560,000
To senior citizen 224,000
To person with disability 112,000
The output VAT is
a. P 60,000
₱560,000 x 12/112
b. P 72,000
c. P 69,600
d. P 79,200

17. The taxpayer is a VAT registered real estate dealer who sold a commercial lot in 2019 with the
following details:
Selling Price (net of VAT) P 6,000,000
Zonal Value 6,300,000
FMV, in the assessment rolls 5,800,000
Payments, exclusive of VAT, made by the buyer:
March 15, 2019 P 750,000
October 15, 2019 750,000
March 15, 2020 2,250,000
October 15, 2020 2,250,000

The output taxes on March 15, 2019 and March 15, 2020 are:
a. P90,000; P94,500
b. P756,000; P270,000
c. P283,500; P756,000
d. P94,500; P283,500

Formula: Output VAT x (Installment/Selling Price)

Output VAT (₱6.3 M x 12%) = 756,000

750,000
Output VAT (March 15, 2019) = 756,000 x = 94,500
6,000,000

2,250,000
Output VAT (March 15, 2020) = 756,000 x = 283,500
6,000,000

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18. A is engaged in two (2) lines of businesses, one is VAT-registered and the other is Non-VAT. His
records show the following (VAT not included):
Sales:
From VAT business P 4,000,000
From Non-VAT business 6,000,000

Purchases of goods from VAT suppliers:

For VAT business 2,000,000
For Non-VAT business 3,000,000
For both businesses 20,000

Operating expenses 1,800,000

The VAT payable is

a. P 600,000
b. P 240,000
c. P 237,600
d. P 239,040

VAT Business Non-VAT Business

Output VAT 480,000
ITCs:
Directly attributable (240,000) (360,000)
Allocated (960) (1,440)
VAT Payable 239,040

19. Monthly VAT declaration is filed on or before the

a. 10th day from the end of each month
b. 20th day from the end of each month
c. 25th day from the end of each month
d. 30th day from the end of each month

20. Quarterly VAT return shall be filed on or before the

a. The 10th day from the end of each quarter
b. The 20th day from the end of each quarter
c. The 15th day from the end of each quarter
d. The 25th day from the end of each quarter

Note: Beginning 2023, only the Quarterly VAT return shall be filed, and only the Quarterly
VAT shall be paid.

21. An individual taxpayer operates a Grocery Store and is not VAT-registered. His annual gross sales
amounted to P2,900,000 for the year although his operations resulted to a net loss for the year 2018.
He is subject to
a. 3% OPT
b. VAT
c. MCIT – 2%
d. None, because operation resulted in a loss.
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If he was qualified and chose to be taxed under the 8% income tax rate, he shall be subject to:
a. 3% OPT
b. VAT
c. MCIT – 2%
d. None of the above.

22. Which of the following lessors of residential units is/are subject to VAT?
A B C D
No. of apartment units 100 20 16 18
Monthly rent/unit P14,800 P15,000 P15,400 P15,100

a. B and D
b. C and D
c. B, C and D
d. D only

23. “A” imported an article from the US. The invoice value of the imported article was $7,000 ($1 –
P50). The following were incurred in relation with the importation (net of VAT):
Insurance P15,000
Freight 10,000
Postage 5,000
Wharfage 7,000
Arrastre charges 8,000
Brokerage fee 25,000
Facilitation fee 3,000
The imported article is subject to P50,000 customs duty and P30,000 excise tax. “A” spent P5,600
(inclusive of vat) for trucking from the customs warehouse to its warehouse in Quezon City. The
VAT on importation is:
a. P 60,600
b. P 35,000
c. P 50,500
Value of imported goods
d. P 60,000
Customs duties
Excise tax
All other charges
VAT Base
VAT rate x 12%
VAT on importation

24. Assuming that the imported article above was sold for P600,000, VAT exclusive, the VAT payable
is
a. P 11,400
b. P 12,000
Output VAT
c. P 9,500
d. P 9,200 ITCs:
ITC on importation
ITC on trucking services
VAT Payable

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25. The A Bakers sells cakes and pastry to well known hotels in the Metro Manila area. The hotels are
allowed credit based on the track record of the hotels. The sale by the store in April 2018 was
P224,000 including the VAT. 75% of the sales are normally on account. How much is the output
tax for the month of April 2018?
a. P 22,000
b. P 20,000
c. P 16,500 GSP 224,000 x 12/112
d. P 24,000

26. “A”, trader, made the following sales of goods during the month of June 2018, exclusive of VAT:
Cash Sales P 200,000
Open Account Sales 100,000
Installment Sales 100,000
Note: Receipt from installment sales 40,000
Consignment made (net of vat):
June 15, 2018 100,000
May 15, 2018 100,000
April 15, 2018 100,000
Output tax is
a. P 50,000 Total Sales
b. P 34,000 Transaction deemed sale (April consignment) _______
c. P 60,000
Total _______
d. P 72,000
Output VAT (12%) _______

27. A, VAT-registered, made the following purchases during the month of January 2018
Goods for sale, inclusive of VAT P 224,000
Supplies, exclusive of VAT 20,000
Office air conditioner, total invoice amount 56,000
Home appliances for residence, gross of VAT 17,600
Repair of store, total invoice amount evidenced
by ordinary receipt of the contractor 4,400
Creditable input taxes are
a. P 26,400 c. P 24,000
b. P 29,400 d. P 32,400

28. A taxpayer registered under the VAT system on January 1, 2018. His records during the month
show:
Value of inventory as of Dec. 31, 2017 purchased from VAT registered persons P 50,000
VAT paid on inventory as of Dec. 31, 2017 6,000
Value of inventory as of Dec. 31, 2017, VAT exempt goods 60,000
Sales, net of VAT 140,000
Sales, gross of VAT 45,000
Purchases, net of VAT 70,000

VAT payable is
a. P 11,100
b. P 7,221
c. P 3,100
d. None of the above.

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Output VAT
ITCs:
ITC on purchases
Transitional ITC: Higher of:
Actual input VAT paid on
beginning inventory or
2% of Beg. Inventory
VAT Payable

29. A VAT taxpayer purchased the following machineries for the second quarter of 2018 (VAT not
included):
Life Cost
Asset 1 April 10 4 years P 800,000
Asset 2 April 20 5 years 1,000,000
Asset 3 May 14 3 years 600,000
Asset 4 May 20 2 years 400,000
Asset 5 June 10 3 years 600,000
Asset 6 June 15 6 years 1,200,000

I. The input tax for April 2018 is

a. P 216,000
b. P 4,000
c. P 98,000
d. P 122,000

II. The input tax for May 2018 is

a. P 124,000
b. P 120,000
c. P 8,000
d. P 4,000

III. The input tax for June 2018 is

a. P 4,400
b. P 8,400
c. P 216,000
d. P 146,000

IV. The input tax for the quarter ending June 2018 is
a. P 126,400
b. P 134,400
c. P 136,400
d. P 12,400

Unamortized Amortized
Life Cost VAT VAT VAT
Asset 1 April 10 4 years 800,000 96,000 2,000
Asset 2 April 20 5 years 1,000,000 120,000 2,000
Asset 3 May 14 3 years 600,000 72,000 72,000
Asset 4 May 20 2 years 400,000 48,000 48,000
Asset 5 June 10 3 years 600,000 72,000 2,000
Asset 6 June 15 6 years 1,200,000 144,000 2,400

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V. On January 2022, how much unutilized VAT may the taxpayer apply against any output VAT
until it is fully utilized?
a) P 65,000
b) P 70,500
c) P 76,800
d) None of the above.

Accumulated
Number of months
ITC amortization
of amortization
Amortization as of Dec.
until Dec. 2021
2021
Asset 1 2,000 45 90,000
Asset 2 2,000 45 90,000
Asset 6 2,400 43 103,200

Unutilized
Accumulated
Beginning ITC ITC as of
amortization
Jan. 2022
Asset 1 96,000 (90,000) 6,000
Asset 2 120,000 (90,000) 30,000
Asset 6 144,000 (103,200) 40,800
76,800

30. A VAT taxpayer purchased the following machineries for the second quarter of 2022 (VAT not
included):
Life Cost
Asset 1 April 10 4 years P 800,000
Asset 2 April 20 5 years 1,000,000
Asset 3 May 14 3 years 600,000
Asset 4 May 20 2 years 400,000
Asset 5 June 10 3 years 600,000
Asset 6 June 15 6 years 1,200,000

The input tax for April 2022 is

a. P 116,000
b. P 216,000 Hint: Beginning 2022, all input VAT on
c. P 98,000 purchases of capital goods shall be
d. None of the above
allowed as ITCs upon purchase/payment.
The input tax for May 2022 is
a. P 4,500
b. P 120,000
c. P 8,000
d. None of the above

The input tax for June 2022 is

a. P 4,400
b. P 230,000
c. P 216,000
d. None of the above

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The input tax for the quarter ending June 2022 is

a. P 126,400
b. P 134,400
c. P 552,000
d. None of the above

31. The following are the data of City Appliance Marketing Corporation, for the last quarter of 2017.
Sales up to December 15, total invoice value P 336,000
Purchases up to December 15, net of input tax 215,000

Additional information:
On December 16, 2017, City Appliance Marketing Corporation retired from its business and the
inventory valued at P190,000 was taken and transferred to New City Appliance Corporation. There
is a deferred input tax from the third quarter of P3,500.
How much is the total VAT due and payable by City Appliance Marketing Corporation in its
operations and retirement from business in the last quarter of 2017?
a. P 22,500
b. P 3,500
c. P 6,350
d. P 29,500

City Appliance (4th Q of 2017)

Output VAT:
From sales (336,000 x 12/112)
From deemed sales transaction (190,000 x 12%)
ITCs:
ITC on purchases (215,000 x 12%)
Deferred input tax
VAT Payable

32. Assuming that New City Appliance Corporation has the following data for the first quarter of 2018:
Sales, total invoice value P 448,000
Purchases, total invoice value 224,000

How much is the VAT payable of New City Appliance Corporation for the first quarter of 2018?
a. P 28,000
b. P 1,200
c. P 30,000
d. P 24,000 New City Appliance (1st Q of 2018)
Output VAT:
From sales (448,000 x 12/112)
ITCs:
ITC on purchases (224,000 x 12/112)
From deemed purchase transaction
VAT Payable

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33. A Refining Company manufactures refined sugar. It had the following data during the first quarter
of 2018:
Sales of refined sugar, net of VAT P 2,000,000
Purchases from farmers of sugar cane used in manufacture of refined sugar 500,000
Purchases of Packaging materials, gross of VAT 784,000
Purchases of labels, gross of VAT 112,000

The VAT payable is

a. P 124,000
b. P 112,500
c. P 70,000
d. P 62,000

Output VAT:
From sales of refined sugar (2.0M x 12%)
ITCs:
Presumptive ITC (500,000 x 4%)
From purchases of packaging materials (784,000 x 12/112)
From purchases of labels (112,000 x 12/112)
VAT Payable

34. “A” is a VAT-registered dealer of appliances. The following data are for the last quarter of 2018:
Sales, net of output tax P 6,800,000
Purchases, net of input tax 5,500,000
Sales returns 200,000
Purchase returns 300,000
Deferred input tax 9,500

The VAT payable for the last quarter of 2018 by A is

a. P 120,500
b. P 70,500
c. P 80,000
d. P 158,500

Output VAT:
From sales, net of returns (6.6 M x 12%)
ITCs:
From purchases, net of returns (5.2 M x 12%)
Deferred ITD
VAT Payable

35. A VAT registered person is engaged in the sale of VAT taxable goods and at the same time is also
engaged in a non-VAT business, in the same business establishment. During the year, total sales of
the VAT business amounted to P336,000, inclusive of VAT. The sales of the non-VAT business
amounted to P200,000 with a separate percentage tax of P6,000 for a total of P206,000. During the
same quarter, repairs on the building amounted to P50,000 plus VAT of P6,000. Supplies purchased
for common use amounted to P10,000 plus P1,200 VAT. Purchase of supplies directly

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attributable/related to VAT-taxable sales amounted to ₱15,680, gross of VAT. The VAT payable
is
a. P 24,000
b. P 25,000
c. P 30,000
d. P 26,400

Output VAT:
From sales (336,000 x 12/112)
ITCs:
From purchases of supplies (15,680 x 12/112)
ITC allocated to VAT-taxable sales (7,200 x (300,000/500,000))
VAT Payable

36. Allan de Santos contracted Abel Yulo, a VAT-registered architect, to renovate the bedrooms in
Allan’s house. Yulo billed Santos the total amount of ₱224,000 (₱200,000 + VAT of ₱24,000).
How much will Allan pay Yulo if the income payment is subject to a 10% CWT?

a. P 201,600
b. P 244,000 Amount, net of VAT ₱200,000
c. P 204,000 Plus: VAT (12% x ₱200,000) 24,000
Less: CWT (10% x ₱200,000) (20,000)
d. None of the above
Amount due the payee ₱204,000

Note: The tax base for the CWT excludes the business
tax (i.e. VAT, OPT, or excise tax).

37. M, building contractor, showed to you the following data

Contract price, net P 5,000,000
Cash received for labor (VAT included) 3,000,000
Cash received for materials (VAT included) 360,000
Receivables 2,000,000
Advances on other contracts still unearned (with VAT) 1,120,000
Cash received and held in trust, to be paid to one of his
suppliers, Acme Warehouse, gross of VAT 560,000

Payments to VAT-registered suppliers:

For materials, net of VAT 500,000
For supplies, net of VAT 100,000
For services of sub-contractors (VAT included) 1,680,000

Operating expenses 200,000

The VAT payable of M is

a. P 228,000
b. P 348,000
c. P 350,000
d. None of the above.

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Output VAT:
From receipts for labor (3.0 M x 12/112)
From receipts for materials (360,000 x 12/112)
From advances on other contracts (1.12 M x 12/112)
ITCs:
From purchases of materials (500,000 x 12%)
From purchases of supplies (100,000 x 12%)
From purchases of services (1.68 M x 12/112)
VAT Payable

38. A, a VAT taxpayer, billed his customer:

Selling Price P 500,000
Value Added Tax 70,000
Total P 570,000
The output tax is
a. P 70,000 ₱570,000 x 12/112
b. P 60,000
c. P 61,071
d. P 68,400

39. A PEZA-registered enterprise is paying the 5% preferential tax in lieu of all other taxes. It is not
VAT-registered. Can the same enterprise claim a TCC or refund from any VAT that it pays on its
purchases?
a) Yes, because it should not be paying the VAT as it is exempt from all taxes whether direct or
indirect.
b) No. Since it is VAT-exempt, it is not allowed to claim a refund of input tax paid.
c) Yes, because the issuance of a VAT invoice to the PEZA-registered enterprise was erroneous.
d) None of the above.

40. JL went out on a date with Ceil, and her uncle, Tito Chris (senior citizen), in Mike’s Bistro for
Ceil’s birthday. They ordered food which they all shared, and the total bill amounted to ₱6,000,
gross of VAT.
How much will Mike’s Bistro bill JL?
a) P1,785.71 c) P5,428.57
b) P 357.14 d) None of the above

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Solution:

Total sales to senior citizen, gross of VAT (₱6,000/3) ₱

Less: 12% VAT
Sales, net of VAT ₱
Senior Citizen discount (20%)

Mike’s Bistro’s bill shall show a total amount due of ₱5,428.57 computed as
follows:

Total Sales, gross of VAT ₱

Less: Senior Citizen VAT exemption
Less: Senior Citizen discount
Total amount due ₱

41. In the first quarter of 2019, M Corporation had the following transactions: (1) Sales to the
government in the amount of ₱200,000 (net of VAT); and (2) Purchases of supplies of ₱160,000,
net of VAT, directly attributable to sales to the government.
The government withheld a 1% EWT on its purchases from M Corporation.
(a) How much will M Corporation receive from the government?
a) P210,000 c) P212,000
b) P200,000 d) None of the above

Sales to government 200,000

Add: 12% VAT 24,000
Less: 1% EWT (2,000)
Less: 5% Final Withholding VAT (10,000)
To be received from government 212,000

(b) Compute the VAT payable/(overpayment) of M Corporation for the 1st quarter of 2019.

a) P4,800 c) P0
b) P19,000 d) None of the above

Output tax (12% of 200,000) 24,000

Standard input tax (7% of 200,000) (14,000)
VAT payable 10,000
Less: 5% FVAT withheld (10,000)
VAT payable 0

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(c) How much of the actual input VAT can M Corporation deduct for purposes of computing its
income tax?

a) P10,000 c) P5,200
b) P19,200 d) None

Actual input tax from purchases (12% x 160,000) 19,200

Standard input tax used (14,000)
Excess that may be deducted/expensed 5,200

(d) If the sales and purchase transactions occurred in the 1st quarter of 2021, how much would M
Corporation receive from the government, and what would be its VAT payable/(overpayment)
for the quarter?

a) ₱212,000; ₱4,800 c) ₱212,000; (₱5,200)

b) ₱200,000; ₱10,000 d) None of the above

Hint: Beginning 2021, sales to the government including GOCCs shall be treated
as regular sales. However, a 5% creditable withholding VAT shall still be
withheld by the government on its purchases.

Sales to government 200,000

Add: 12% VAT 24,000
Less: 1% EWT (2,000)
Less: 5% Creditable Withholding VAT (10,000)
To be received from government 212,000

Output tax (12% of 200,000)

Input tax (12% of 160,000)
VAT payable
Less: 5% Creditable Withholding VAT
VAT payable/(overpayment)

42. In January 2021, J. Reyes started a car repair business. He did not expect his gross receipts to exceed
₱3.0 Million a year, and thus did not register for purposes of the VAT. He also signified in his first
quarter ITR his intention to be taxed under the 8% income tax rate option. However, by mid-June
2021, his receipts had already reached the amount of ₱3,000,050.00.

When should J. Reyes register for VAT, and when will he start to become liable for VAT? Will he
still pay OPT under Section 116 of the Tax Code?
a) He should register in July 2021 which is the month following the month where his gross receipts
exceeded ₱3,000,000. He will become liable for VAT starting July 2021. He will be liable for
OPT for the months January to June 2021, and shall pay such OPT on or before July 25.

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b) He should register within 10 days after the end of June or from July 1 to July 10, 2021. He shall
be liable for VAT on August 1, 2021. He will no longer be liable to OPT.
c) He should register within 10 days after the end of December (the last month of the 12 month
period) or from January 1 to 10, 2022. He shall be liable for VAT beginning on the 1st day of
the month following his registration, or February 1, 2022 He will be liable for OPT from
January to December, 2021.
d) None of the above.

43. A Company, VAT-registered, is engaged in stockbrokerage and dealership in securities. It provided

the following data for the 2nd quarter of 2018:

Commissions received from stockbrokerage:

Commission received (net of VAT) P150,000
Commission uncollected but earned 250,000

Stock transactions are (VAT excluded):

Price Cost
A Stock P500,000 P 350,000
B Stock 600,000 500,000
C Stock 800,000 650,000
All 3 stocks were sold in the stock exchange.

Supplies bought P88,000, VAT included

a. The percentage tax due is: None
b. The VAT payable of A is: P56,571

Output VAT:
From commissions received (150,000 x 12%) 18,000
From sale of shares (total gain of 400,000 x 12%) 48,000 66,000
ITCs:
Purchases (88,000 x 12/112) (9,429)
VAT Payable 56,571

44. The Bureau of Internal Revenue may use “Oplan Kandado” against the following taxpayer, except?
a. VAT registered person who fails to issue receipts.
b. VAT registered person who fails to file VAT returns.
c. VAT registered person who understates its taxable sales by 30%.
d. VAT registered person who understates its purchase by 30%.

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45-46) VAT Forms

45. Domestic Inc., VAT-registered, had the following data (net of business taxes) for the 4th quarter of
2022:

Quarterly
October November December Totals
Sales:
VATable sales to private entities 3,000,000 1,500,000 500,000 5,000,000
Exempt sales 100,000 200,000 100,000 400,000
Sales to the government 200,000 50,000 50,000 300,000
Export sales 100,000 40,000 60,000 200,000
Total 3,400,000 1,790,000 710,000 5,900,000

Quarterly
October November December Totals
Purchase of goods
from VAT suppliers related to:
VATable sales to private entities 10,000 10,000 20,000 40,000
Exempt sales 10,000 15,000 5,000 30,000
Sales to the government 0
Export sales 0
Total 20,000 25,000 25,000 70,000

Quarterly
October November December Totals
Purchase of services
from VAT suppliers related to:
VATable sales to private entities 0
Exempt sales 0
Sales to the government 100,000 55,000 45,000 200,000
Export sales 5,000 15,000 20,000
Total 105,000 70,000 45,000 220,000

Purchase of depreciable capital

goods from VAT supplier ₱3,000,000
Life in years 3

The corporation had excess input tax credit from the previous quarter in the amount of ₱3,900.

The depreciable capital goods were all purchased in October, and were for the benefit of all of the
taxpayer’s lines of businesses.

In November, the corporation also applied for a VAT refund in the amount of ₱2,000.

Compute the VAT payable for October 2022, November 2022, and the 4th Quarter of 2022.

(A) ₱6,888; ₱175,900; ₱69,519

(B) ₱10,788; ₱175,900; ₱65,619
(C) ₱6,888; ₱173,900; ₱71,519
(D) None of the above
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Hints:
(1) Starting 2021, sales to the government shall treated just like a regular sale, but subject to a
5% creditable VAT.

(2) Starting 2022, input VAT from the purchase of capital goods need not be amortized.

October 2022
Output VAT (₱3.2 M x 12%) + (₱100,000 x 0%) 384,000
ITC:
Excess ITC from previous quarter 3,900
Purchase of goods (₱10,000 x 12%) 1,200
Purchase of services (₱105,000 x12%) 12,600
Purchase of capital goods
₱360,000 x (₱3.3 M/₱3.4 M) 349,412 (367,112)
Net VAT 16,888
Credit: Creditable VAT withheld (₱200,000 x 5%) (10,000)
VAT Payable 6,888

November 2022
Output VAT (₱1.55 M x 12%) + (₱40,000 x 0%) 186,000
ITC:
Excess ITC from previous quarter -
Purchase of goods (₱10,000 x 12%) 1,200
Purchase of services (₱70,000 x12%) 8,400
Purchase of capital goods -
Applied for refund (2,000) (7,600)
Net VAT 178,400
Credit: Creditable VAT withheld (₱50,000 x 5%) (2,500)
VAT Payable 175,900

4th Q of 2022
Output VAT (₱5.3 M x 12%) + (₱200,000 x 0%)
ITC:
Excess ITC from previous quarter
Purchase of goods (₱40,000 x 12%)
Purchase of services (₱220,000 x12%)
Purchase of capital goods
₱360,000 x (₱5.5 M/₱5.9 M)
Applied for refund
Net VAT
Credit: Creditable VAT withheld (₱300,000 x 5%)
Monthly VAT paid in first 2 months
VAT Payable

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46. If the financial data is for the 4th Quarter of 2023, compute the VAT payable for October 2023,
November 2023, and the 4th Quarter of 2023.

(A) ₱6,888; ₱175,900; ₱69,519

(B) ₱0; ₱0; ₱267,307
(C) ₱0; ₱0; ₱252,307
(D) None of the above

4th Quarter of 2023

Output VAT (₱5.3 M x 12%) + (₱200,000 x 0%) 636,000

ITC:
Excess ITC from previous quarter 3,900
Purchase of goods (₱40,000 x 12%) 4,800
Purchase of services (₱220,000 x12%) 26,400
Purchase of capital goods
₱360,000 x (₱5.5 M/₱5.9 M) 335,593
Applied for refund (2,000) (368,693)
Net VAT 267,307
Credit: Creditable VAT withheld (₱300,000 x 5%) (15,000)
Monthly VAT paid in first 2 months 0
VAT Payable 252,307

Note: Beginning January 1, 2023, the filing and payment of the VAT shall be done quarterly.

The End

Tax 93-13