CHAPTER 6

Drill exercises
1. Seller of agricultural food products Exempt
2. Furniture shop Vatable
3. Vegetable trader Exempt
4. A private high college Exempt
5. A private hospital Exempt
6. A dentist Vatable
7. Hospital drugstore Vatable
8. A non-profit elementary school Exempt
9. A government college Exempt
10. Restaurant Vatable
11. Bus operator % Tax
12. Hotel Vatable
13. Operator of domestic sea vessel Vatable
14. Life insurance company % tax
15. Mall Vatable
16. Domestic airliner Vatable
17. Lessor vessels or aircraf Vatable
18. Banks % tax
19. Operator of taxi % tax
20. International carriers % tax
21. Keepers of garage % tax
22. Book publishers Exempt
23. Quasi-banks % tax
24. Dealer of household appliances Vatable
25. Dealer of commercial lot Vatable
26. Insurance agent Vatable
27. Employee Exempt
28. Contractor Vatable
29. Processor of sardines Vatable
30. Auto parts dealer Vatable
31. Manufacturer of hog feeds Exempt
32. Seller of fertilizer and seeds Exempt
33. Fisherman Exempt
34. Fish vendor Exempt
35. Textile manufacturer Vatable

True or False 1
T 1. A person who exceeded the VAT-threshold in any 12-month period must register as a VAT-
taxpayer.
T 2. The VAT applies on receipts or sales other than those exempted and those specifically subject to
percentage tax.
T 3. A person with vatable sales or receipts not exceeding the VAT-threshold may register as a non-
VAT taxpayers.
T 4. A person with vatable sales or receipts not exceeding the VAT-threshold may register as a VAT-
 taxpayer.
Note: (by optional registration) the statement did not say “must”
T 5. A person who commences business with an expectation to exceed the VAT-threshold must
register as a VAT-taxpayer.
Note: see revenue regulation provisions
F 6. A registrable person is exempt from VAT.
Note: He is vatable.
T 7. A VAT-registered person is exempt from VAT on VAT-exempt sales.
Note: VAT exempt sales are not subject to VAT regardless of the seller
T 8. A non-VAT taxpayer shall not bill VAT on his sale.
F 9. A VAT-registered person is liable to VAT on exempt sales and services specifically subject to
percentage tax.
Note: Only on vatable sales
F 10. The threshold for franchise grantees of electricity is P10,000,000.
Note: Franchise grantees of gas and water only.
T 11. The VAT threshold for sellers of goods or services is P3,000,000.
T 12. The VAT threshold for franchise grantees of gas and water is P10,000,000.
T 13. The VAT threshold applicable to professional practitioners is P3,000,000.
T 14. Exempt sales shall not be billed with an output VAT.
F 15. A sale to the government shall not be billed with output VAT since it is exempt from VAT.
Note: It is subject to 12% output VAT

True or False 2
F 1. Export sales shall be billed with output VAT.
Note: No output VAT because the VAT rate is 0%
F 2. The export sale of a VAT-taxpayer is an exempt sale.
Note: It is a zero-rated sale. For a non-VAT taxpayer, it is exempt.
F 3. A non-VAT-registered person who invoiced VAT on his sale shall be subject to 12% VAT without
the benefit of an input VAT 3% percentage tax, and 25% surcharge.
Note: 50% surcharge
T 4. Exempt sales which are billed as regular sales shall be considered as regular vatable sales.
F 5. The VAT payable of a VAT-registrable person is the output VAT without benefit of input VAT plus
3% percentage tax.
Note: Output VAT but without benefit of input VAT, no percentage tax.
T 6. No input VAT traceable to exempt can be claimed sales as tax credit.
F 7. No input VAT traceable to government sales is claimable as tax credit.
Note: The 7% standard input VAT is claimable in lieu of the actual input VAT.
F 8. A VAT-registered person shall be subject to a final withholding VAT of 12% on sales to the
government.
Note: 5% final withholding VAT
F 9. The VAT payable of any person is always 3% of the value-added on the sales of goods.
Note: Sometimes it becomes 12% of the sale when no input VAT is claimable
T 10. The claimable input VAT on government sales is 7% of the sales.
T 11. The VAT payable on zero-rated sales is always zero.
Note: Technically true because the VAT payable is always negative
F 12. There is no way VAT payable could be negative in a particular month or quarter.
T 13. VAT is paid in three monthly installments similar to the percentage tax.
Note: Two monthly installments, and a quarterly payment
F 14. Exempt sales must be indicated as such; otherwise, they will be regarded as regular sales.
T 15. The standard input VAT is 5% of government sales.

Multiple Choice – Theory: Part 1

1. All of these are vatable, except
a. Engineering contractors
b. Lawyers
c. Employee
d. Brokers

2. What is non VAT-exempt?

a. Importation of agricultural or marine food products
b. Gross receipts of professional practitioners
c. Receipts from taxicabs
d. Gross receipts of hospitals

3. Which is vatable?
a. Sale of fertilizers
b. Sales of fruit
c. Sale of bamboo handicrafs
d. Sale of vegetables

4. All of these businesses are vatable, except

a. Non-life insurance business
b. Banks
c. Security dealers
d. Merchandisers

5. Which is vatable?
a. Fruit dealer
b. Department store
c. Cooperative
d. Meat vendor

6. Which of the following will pay VAT?

a. Farmer
b. Food processor
c. Rice or corn miller
d. Fruit dealer
7. Which will not pay VAT?
a. International carrier
b. Domestic air carrier
c. Domestic sea carrier
d. All of these

8. Which of the following is vatable?

a. An operator of cockpits
b. A disco
c. A bowling alley
d. An operator of a race track

9. Which is vatable?
a. Local water districts
b. Gasoline stations
c. Internet service providers
d. Schools

10. Which is vatable?

a. Sale of buses and jeepneys
b. Sale of vessels
c. Sale of aircraf
d. Lease of vessels or aircrafs

11. Which will not pay VAT on its receipts?

a. Hospitals
b. Real property dealers
c. Bookstores
d. Taxicab operators

12. Which is vatable?

a. Sales of agricultural or marine food products
b. Gross receipts of medical practitioners
c. Sales of books
d. Sales of fertilizers, seeds and seedlings

13. Which statement is correct?

a. Husband and wife are considered separate taxpayers for business tax purposes.
b. For purposes of the VAT threshold, both exempt sales and receipts from services subject to
percentage tax must be included.
c. A VAT-registered taxpayer must pay VAT on services subject to percentage tax.
 d. All of these

14. What is the general lock-in period for those who voluntarily register as VAT taxpayers?
a. 3 years
b. 5 years
c. 1 year
d. Perpetual

15. To franchise grantees of radio or television, the VAT-registration shall be

a. Revocable in 3 years.
b. Irrevocable in 3 years.
c. Revocable in 1 year.
d. Irrevocable perpetually.

16. which is not vatable as a separate entity?

a. A branch
b. A subsidiary company
c. A spouse
d. A parent company

17. Statement 1: Sellers of services are subject to VAT on gross receipts.

Statement 2: Sellers of goods are subject to VAT on gross selling price.
Which is correct?
a. Both statements
b. Neither statement
c. Statement 1
d. Statement 2

18. Statement 1: As a rule, percentage tax is paid monthly.

Statement 2: VAT is paid monthly and quarterly
Which is false?
a. Both statements
b. Neither statement
c. Statement 1
d. Statement 2

19. Statement 1: “Gross receipt” means collections and advances by clients.

Statement 2: “Gross selling price” means gross sales including delivery charges and excise tax on the
sales if any.
Which is incorrect?
a. Both statements
b. Neither statement
 c. Statement 1
d. Statement 2

20. Statement 1: Discounts that are contingent to a future event are deductible from gross selling price.
Statement 2: Expenses of the service provider that are reimbursed by the client forms part of the
gross receipt.
Which is incorrect?
a. Both statements
b. Neither statement
c. Statement 1
d. Statement 2

Multiple Choice – Theory: Part 2

1. Which is non-vatable?
a. Exempt sales billed as regular sales by VAT persons
b. Export sales of VAT-registered persons
c. Regular sales of registrable persons
d. Export sales of non-VAT registered persons

2. Statement 1: Input VAT is creditable only by VAT-registered taxpayers.

Statement 2: Input VAT is deductible by non-VAT taxpayers against their gross income for purposes of
income tax.
Which statement is correct?
a. Statement 1
b. Statement 2
c. Both statements
d. Neither statement

3. Statement 1: A VAT taxpayer who purchases goods from non-VAT suppliers will effectively pay a VAT
equivalent to the output VAT.
Statement 2: No output VAT shall be billed on export sales and exempt sales.
Which is incorrect?
a. Statement 1
b. Statement 2
c. Both statements
d. Neither statement

4. Which is the tax payable by a non-VAT taxpayer who issues a VAT invoice or VAT official receipt?
a. Output VAT plus 3% percentage tax
b. Output VAT less input VAT, plus 3% percentage tax and 50% surcharge
c. Output VAT plus 3% percentage tax and 50% surcharge
d. 3% percentage tax
5. What is the business tax payable by a person who is VAT-registrable?
a. The output VAT
b. The input VAT
c. Output VAT less input VAT
d. Output VAT plus 3% percentage tax

6. The claimable input VAT is 12% of purchases from

a. VAT-registered taxpayers.
b. Non-VAT-registered taxpayers.
c. A or B
d. None of these

7. Which is a source of input VAT?

a. Purchase of agricultural or marine food products from VAT-sellers
b. Purchase of agricultural or marine food products from non-VAT-sellers
c. Purchase of vatable goods or services from non-VAT suppliers
d. Purchase of vatable goods or services from VAT suppliers

8. Which is not a sales category for VAT taxpayers?

a. Exempt sales
b. Zero-rated sales
c. Sales to the government
d. Sales to non-profit institutions

9. What is the VAT due and payable on regular sales?

a. Output VAT less input VAT
b. Output VAT less input VAT plus 3% percentage tax
c. Output VAT + 3% percentage tax
d. Output VAT + 3% percentage tax plus surcharge

10. Which is subject to withholding VAT?

a. Regular sales of real properties
b. Zero-rated sales
c. Sales to the government
d. Exempt sales

11. A VAT taxpayer can claim the actual input VAT credit on
a. Regular sales
b. Zero-rated sales
c. Government sales
d. A and B
12. Which is a possible source of input VAT?
a. Importation
b. Purchase from VAT-sellers
c. Purchase from no-VAT sellers
d. A and B

13. A VAT taxpayer can claim the actual input VAT credit on
a. Regular sales
b. Zero-rated sales
c. Government sales
d. A and B

14. A VAT taxpayer may claim only partial or full input VAT credit on
a. Regular sales
b. Zero-rated sales
c. Government sales
d. A and B

15. The output VAT on government sales is

a. 12% of sales
b. 0% of sales
c. None
d. 12% of value added

16. The output VAT on export sales is

a. 12% of sales
b. 0% of sales
c. None
d. 12% of value added

17. The output VAT on exempt sale is

a. 12% of sales
b. 0% of sales
c. None
d. 12% of value added

18. No input VAT is creditable on

a. Government sales
b. Regular sales
c. Export sales
d. Exempt sales
19. The claimable input VAT on government sales is
a. 12% of purchases from VAT suppliers
b. 12% of purchases from non-VAT suppliers or VAT suppliers
c. 7% of purchases from VAT suppliers
d. 7% of sales

20. Statement 1: The VAT due and payable on regular sales is always positive.
Statement 2: The VAT due and payable on export sales is always negative.
Which statement is generally correct?
a. Both statements
b. Neither statement
c. Statement 1
d. Statement 2

21. Statement 1: Sellers always pay VAT on government sales.

Statement 2: Sellers will not pay VAT on export sales.
Which is incorrect?
a. Statement 1
b. Statement 2
c. Both statements
d. Neither statement

22. Which is a correct statement regarding the VAT?

a. The taxable quarter of any taxpayer must be aligned to the calendar year.
b. The taxable quarter of an individual taxpayer must be aligned to the calendar year.
c. The taxable quarter of a corporate taxpayer must be aligned to the calendar year.
d. All of these.

23. Statement 1: The VAT returns for the first two months of the quarter are prepared on a monthly
basis.
Statement 2: The VAT return on the third month of the quarter reflects a monthly balance.
Which is incorrect?
a. Statement 1
b. Statement 2
c. Both statements
d. Neither statement

24. Statement 1: VAT paid in the first two months of the quarter is deductible against the Output VAT for
the entire quarter.
Statement 2: The VAT paid in a quarter is deductible against the output VAT of future quarters of the
taxable year.
 Which is correct?
a. Statement 1
b. Statement 2
c. Both statements
d. Neither statement

25. The monthly VAT return is referred to as

a. BIR Form 2551M
b. BIR Form 2550M
c. BIR Form 2551Q
d. BIR Form 2550Q

Multiple Choice – Problems: Part 1

1. An agricultural supplier had the following sales during the last 12-month period:
Sales of fertilizers and corn seeds 1,200,000
Sales of seedlings 400,000
Farm equipment 700,000

What is the business tax liability of this taxpayer?

a. VAT on all these categories of sale
b. VAT on equipment and seedlings
c. Percentage tax on equipment and seedlings
d. Percentage tax on farm equipment

2. Mrs. Escala had the following sources of income in the past 12 months:
Salaries 1,200,000
Professional fees 800,000

Which is correct?
a. She shall be subject to VAT on the salaries and professional fees.
b. She shall be subject to percentage tax on the salaries and professional fees.
c. She shall pay percentage tax on the professional fees only.
d. She shall pay VAT on the professional fees only.

3. Aciga Corporation had the following sales in the past 12-month period:
Home office sales 2,000,000
Branch 1 sales 1,200,000
Branch 2 sales 1,000,000
Total company sales 4,200,000

Which is correct?
a. Home office shall pay VAT.
 b. Branch 1 and branch 2 shall pay percentage tax.
c. The home office and branches shall all pay VAT.
d. A and B

4. Assuming Aciga Corporation is a parent corporation with two subsidiaries with the following sales in
the past 12-month:
Home office sales 2,000,000
Branch 1 sales 1,200,000
Branch 2 sales 1,000,000
Total company sales 4,200,000

Which is incorrect?
a. Aciga Corporation shall pay VAT.
b. Subsidiary 1 and Subsidiary 2 shall pay percentage taxes.
c. All companies in the group shall pay VAT.
d. A and B

5. Mr. and Mrs. Lallo had the following sales in the past 12 months:
Mr. Lallo Mrs. Lallo Total
Fruits and vegetables sales 1,400,000 - 1,400,000
Fish and meat sales - 1,200,000 1,200,000
Grocery sales 800,000 600,000 1,400,000
Total 2,200,00 1,800,000 4,000,000

Which is correct?
a. Both Mr. and Mrs. Lallo shall pay VAT.
b. Both Mr. and Mrs. Lallo shall pay percentage tax.
c. Mr. Lallo shall pay VAT, but Mrs. Lallo shall pay percentage tax.
d. Mrs. Lallo shall pay VAT, but Mr. Lallo shall pay percentage tax.

6. Mr. Vegetta, a VAT-registered taxpayer, owns a mini-store with the following sales in the past 12
months:
Sales of meat and vegetables 1,800,000
Sales of cooked rice and viands 1,200,000
Sales of snacks and sofdrinks 500,000
Total sales 3,500,000

Which is correct?
a. Mr. Vegetta shall pay percentage tax on the sales of rice, viands sofdrinks and snacks.
b. Mr. Vegetta shall pay VAT on the sale of rice, viands, snacks and sofdrinks.
c. Mr. Vegetta shall pay VAT on all sales.
d. Mr. Vegetta shall pay percentage tax on all sales.
7. A non-VAT realty lessor had the following receipts during a month:
Bed spacers’ rooms with P2,000 monthly rental each 120,000
Houses for rent with P10,000 monthly rental each 1,000,000
Commercial spaces with P5,000 monthly rental each 900,000

Which is correct?
a. The taxpayer shall pay VAT on all receipts.
b. The taxpayer shall pay VAT on the commercial spaces.
c. The taxpayer shall pay percentage tax on all receipts.
d. The taxpayer shall pay percentage tax on the commercial spaces.

8. A service provider had the following data during the month:

Revenue, including VAT 268,800
Gross receipts, including VAT 180,000
Input VAT 12,000

Assuming the taxpayer is VAT-registered, compute the VAT payable.

a. P7,283
b. P9,600
c. P16,800
d. P19,286

Note: Closest answer. A seller of goods is taxable on “gross receipts” not on revenues.
Output VAT (180,000 x 12/112) = P19,286 – P12,000 input VAT = P7,286

9. Assuming the taxpayer is a VAT-registrable person, compute the VAT payable?

a. P7,283
b. P9,600
c. P16,800
d. P19,286

Note: The output VAT is the VAT due and payable if the taxpayer did not register as VAT taxpayer.

10. A seller of goods had the following data during the month:
Sales invoice (total billed prices) 436,800
Total cash collections 380,800
Sales returns and allowances, billed price 11,200
Input VAT 14,000

Assuming the taxpayer is VAT-registered, compute the VAT payable.

a. P0
b. P26,800
c. P31,600
 d. P35,600

Note: Billed prices are inclusive of VAT.

Output VAT (P436,800 – P11,200) x 12/112 = P45,600 – P14,000 input VAT = P31,600

11. Assuming the taxpayer is VAT-registrable person, compute the VAT payable.
a. P0
b. P26,800
c. P45,600
d. P46,800

12. The following sales and purchases were taken from the books of accounts of a VAT taxpayer:
Sales April May June
Sales 625,000 400,000 600,000
Purchases 400,000 420,000 200,000

What is the VAT payable in April?

a. P75,000
b. P48,000
c. P27,000
d. P0

Note: Data from the books of accounts are exclusive of VAT. Sales and purchases accounts exclude
VAT.
Output VAT (12% of sales) – 75,000; 48,000; 195,000
Input VAT (12% of purchases) – 48,000; 50,400; 122,400
VAT due – 27,000; 2,400; 72,600

13. What is the VAT payable in June?

a. P72,600
b. P72,000
c. P48,000
d. P45,600

A VAT taxpayer had the following sales and purchases during the month:
Sales, excluding VAT 300,000
Purchases, inclusive of P14,000 VAT 280,000

14. The sale is VAT-exempt

a. P20,000
b. P34,000
c. P50,000
 d. P57,000

Note: The input VAT on exempt sales will be part of costs. Thus, P300,000 – P280,000 = P20,000.

15. The sale is made to the government

a. P20,000
b. P34,000
c. P41,000
d. P41,000

Note: The P280,000 purchases is inclusive of VAT. Hence, the standard input VAT (7% of the P300,000
sales can be deducted from the P280,000 purchases. This is because excess actual input VAT over the
standard input VAT is included as part of costs and expenses. While the excess of standard input VAT
over the actual input VAT is included as gain part of gross income.
Hence, P300,000 sales – P280,000 – (7% x P300,000) = P41,000

16. The sale is made to regular customers

a. P20,000
b. P34,000
c. P41,000
d. P50,000

Note: The input VAT must be removed from the purchases (cost of sales).
Hence, P300,000 sales – P280,000 purchases – P14,000 input VAT = P34,000

17. The sale is made by a registrable person

a. P20,000
b. P34,000
c. P41,000
d. P50,000

Note: Input VAT on sales of registrable persons cannot be claimed as input VAT. Since, there is not
express provision that disallowed tax credits can be claimed as a deduction, it is safe to treat it as
nondeductible against gross income. It must be emphasized that the claim of deductions and tax
credits are construed against the taxpayer.

Multiple Choice – Problems: Part 2

1. A sale was invoiced by a VAT-seller at P500,000. Compute for the Output VAT.
a. P0
b. P50,000
c. P53,571
d. P60,000
 Note: P500,000 x 12/112 = P53,571

2. A VAT-registered seller wishes to bill the sale of unprocessed meat for P50,000. At what amount
should the sale be billed?
a. P50,000
b. P51,500
c. P53,571
d. P60,000

Note: Meat is VAT exempt he

3. A VAT-registered department store had an un-invoiced sale with the following selling prices:
1 cavan rice 2,500
Vegetables 1,500
Cooking oil 200
Noodles 1,300
Total sales 5,500

What should be the invoice price?

a. P5,500
b. P5,545
c. P5,665
d. P5,680

Note:
1 cavan rice 2,500 2,500
Vegetables 1,500 1,500
Cooking oil (200 x 112%) 200 224
Noodles (1,300 x 112% 1,300 1,456
Total sales 5,500 5,680

4. The sale of a residential lot was invoiced for P1,680,000.

What is the Output VAT?
a. P0
b. P180,000
c. P200,000
d. P201,600

Note: The sale is exempt since it did not exceed the P1,919,500 price ceiling on the sale of residential
lots.

5. The sale of a residential dwelling was invoiced for P3,920,000.

What is the Output VAT?
a. P0
b. P420,000
 c. P462,000
d. P470,400

Note: The price exceeds the P3,199,200 price ceilings. Hence, the invoice is inclusive of VAT. The VAT is
computed as P3,920,000 x 12/112 = P420,000.

6. The sale of fruits was involved in a VAT invoice at P24,000.

What is the output VAT?
a. P0
b. P2,571
c. P2,880
d. P4,000

Note: The sale of fruit is VAT exempt. However, if it is invoiced in a VAT invoice not on an “exempt”
invoice, the sale will be treated as a regular vatable sale.
The VAT can be computed as P24,000 x 12/112 = P2,571.

7. A taxpayer had the following purchases of vatable goods, exclusive of VAT:

Purchases from non-VAT suppliers 180,000
Purchased from VAT-suppliers 1,000,000
Total purchases 1,180,000

What is the input VAT?

a. P107,143
b. P120,000
c. P126,429
d. P141,600

Note: P1,000,000 purchases from VAT suppliers x 12%.

8. A non-VAT registered taxpayer purchased goods which was invoiced by the seller as follows:
Selling price 50,000
Output VAT 6,000
Total invoice 56,000

What is the claimable input VAT?

a. P0
b. P6,000
c. P6,720
d. P7,200

Note: A non-VAT taxpayer cannot claim input VAT.

9. In the immediately preceding problem, what is the claimable input VAT if the purchaser is a VAT-
registered taxpayer?
a. P0
b. P6,000
 c. P6,720
d. P7,200

Note: The input VAT of the purchaser shall be the output VAT billed by the seller.

10. An insurance company had the following gross receipts:

Last Current
12-months month
Sales of fertilizers and seeds 4,600,000 700,000
Sales of equipment 1,920,000 200,000
Input VAT on processed foods 140,000 10,000

What is the VAT payable for the current month?

a. P0
b. P14,000
c. P24,000
d. P108,000

Note: The VAT payable shall be computed out of vatable receipts (non-life premiums only)
Output VAT (P200,000 x 12%) = P24,000 – P0 input VAT = P24,000

11. A VAT-registered taxpayer with several businesses had the following sales:
Last Current
12-months month
Sales of fertilizers and seeds 1,800,000 200,000
Sales of equipment 1,500,000 150,000
Input VAT on processed foods 140,000 13,000

Compute the VAT payable for the current month.

a. P0
b. P5,000
c. P18,000
d. P29,000

Note: Even if the taxpayer did not exceed the VAT threshold in the past 12 months if it is registered as
a VAT taxpayer, it will be nonetheless subject to VAT.
Output VAT (P150,000 x 12%) – P13,000 input VAT = P5,000

12. 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. P0
b. P200,000
c. P236,000
d. P248,000
 Note: Input VAT traceable to exempt sales are non-creditable.
P36,000 + P200,000 = P236,000.

13. In the immediately preceding problem, what is the VAT payable?

a. P100,000
b. P64,000
c. P52,000
d. P0

Note: (P300,000 – P236,000 = P64,000)

14. The taxpayer made a sale P400,000 to the government from goods he purchased for P300,000 from
VAT taxpayers.
What is the actual input VAT?
a. P0
b. P20,000
c. P28,000
d. P36,000

Note: The P300,000 purchases is understandable exclusive of VAT because there is no

15. A VAT taxpayer sold goods to the government for P1,000,000 and paid P40,000 input VAT traceable
to the sale. What is the creditable input VAT on government sale?
a. P0
b. P40,000
c. P50,000
d. P70,000

Note: The creditable input VAT on government sale is the standard input VAT equivalent to 7% of the
sale. Hence, 7% x P1,000,000 = P70,000

16. A VAT-taxpayer exported P1,000,000 worth of goods. It incurred P36,000 input VAT on such sales.
What is the creditable input VAT?
a. P0
b. P36,000
c. P50,000
d. P70,000

17. A non-VAT-taxpayer exported P1,000,000 worth of goods. It incurred P36,000 input VAT on such
sales. What is the creditable input VAT?
a. P0
b. P36,000
c. P50,000
d. P70,000

Note: The export sales of non-VAT sellers is an exempt sales. Input VAT traceable to it are
noncreditable but are part of costs and expenses.
18. A taxpayer collected the following from lessors of commercial spaces:
Billing for rentals 1,500,000
Less: Creditable withholding tax 75,000
Net receipt 1,425,000

Compute the output VAT?

a. P0
b. P160,714
c. P180,000
d. P200,000

Note: The output VAT must be based on the gross receipts not on the net receipts. The billing should
be understood to include the output VAT but since there is no answer for 12/112 x P1,500,000. The
same is impliedly exclusive of VAT.
The Output VAT should therefore be computed as P1,500,000 x 12% = P180,000.

19. A VAT taxpayer received a 5% creditable withholding tax plus P48,150 cash from a VAT invoice. What
is the output VAT?
a. P5,159
b. 5,778
c. 5,373
d. 5,400

Note: If X is invoice price, (95%X + 12% = P48,150); X = P45,000;

Then the Output VAT is P45,000 x 12% = P5,400.

20. A VAT taxpayer received a sum of P74,900 and a P3,500 certificate of creditable withholding tax.
What is the output VAT?
a. P9,396
b. P8,568
c. P8,400
d. P8,988

Note: Invoice price = P74,900 + P3,500 = P78,400.

Then the Output VAT shall be P78,400 x 12/112 = P8,400.