A VAT-registered taxpayer engaged the services of a non-resident service provider.

The
contract price was P500,000 which was paid by the VAT-registered taxpayer in full. How
much was the amount of withholding VAT to be withheld by the VAT-registered taxpayer
using 12% VAT rate?
a. P 60,000 c. P 35,000
b. P 50,000 d. P 25,000
Response: a
Score: 1 out of 1 Yes

Question 2
 Where a VAT registered person purchases or imports capital goods, which are
depreciable assets for income tax purposes, the aggregate acquisition cost of which
(exclusive of VAT) in a calendar month exceeds One Million pesos (P1,000,000.00),
regardless of the acquisition cost of each capital good, shall be claimed as credit
against output tax. statements is false?
a. If the estimated useful life of a capital good is five (5) years or more - The input tax
shall be spread evenly over a period of sixty (60) months and the claim for input tax
credit will commence in the calendar year when the capital good is acquired.
b. If the estimated useful life of a capital good is less than five (5) years — The input tax
shall be spread evenly on a monthly basis by dividing the input tax by the actual number
of months comprising the estimated useful life of the capital good.
c. Capital goods or properties refers to goods or properties with estimated useful life
greater than one (1) year and which are treated as depreciable assets under Sec. 34(F)
of the Tax Code, used directly or indirectly in the production or sale of taxable goods or
services.
d. The aggregate acquisition cost of depreciable assets in any calendar month refers to
the total price, excluding the VAT, agreed upon for one or more assets acquired and not
on the payments actually made during the calendar month.
Response: a
Score: 1 out of 1 Yes

Question 3
 Sale of the following drugs are exempt from VAT, except
a. Sale of drugs and medicines prescribed for diabetes.
b. Sale of drugs and medicines prescribed for high cholesterol
c. Sale of drugs and medicines prescribed for d hypertension
d. Sale of drugs and medicines prescribed for polio.
Response: d
Score: 1 out of 1 Yes

Question 4
 Statement 1 - Adjacent residential lots, although covered by separate titles and/or
separate tax declarations, when sold or disposed to one and the same buyer, whether
covered by one or separate Deed of Conveyance, shall be presumed as a sale of one
residential lot.
Statement 2 - Adjacent residential lots, covered by separate titles and/or separate tax
declarations, when sold or disposed to different buyers, shall be presumed as a sale of
one residential lot.
Statement I Statement II
a. True True
b. True False
c. False True
Response: b
Score: 1 out of 1 Yes

Question 5
 Which of the following statements is false?
a. Lease of residential units with a monthly rental per unit not exceeding Fifteen
Thousand Pesos (P15,000.00) is exempt from VAT.
b. Lease of residential units where the
monthly rental per unit exceeds Fifteen Thousand Pesos (P15,000.00), but the
aggregate of such rentals of the lessor during the year do not exceed Three
Million Pesos (P3,000,000.00) is exempt from VAT.
c. Lease of residential units where the monthly rental per unit exceeds Fifteen
Thousand Pesos (P15,000.00), but the aggregate of such rentals of the lessor during
the year do not exceed Three Million Pesos (P3,000,000.00) shall be exempt from VAT
and to the three percent (3%) percentage tax under Section 116 of the Tax Code.
d. Lease of residential units where the monthly rental per unit exceeds Fifteen
Thousand Pesos (P15,000.00), but the aggregate of such rentals of the lessor during
the year do not exceed Three Million Pesos (P3,000,000.00) is subject to three percent
(3%) percentage tax under Section 116 of the Tax Code.
Response: d
Score: 0 out of 1 No

Question 6
 Which is subject to VAT?
a. Sale or lease of goods and services to senior citizens and persons with disabilities.
b. Transfer of Property pursuant to Section 40(C)(2) of the Tax Code, as amended.
c. Association dues, membership fees, and other assessments and charges collected
on a purely reimbursement basis by homeowners’ associations and condominium
corporations established under Republic Act No. 9904 (Magna Carta for Homeowners
and Homeowners’ Association) and Republic Act No. 4726 (The Condominium Act),
Respectively.
d. Sale or lease of goods or properties or the performance of services
other than the transactions mentioned in the preceding paragraphs, the gross
annual sales and/or receipts do not exceed the amount of Three Million Pesos
(P3,000,000.00) by a VAT-registered person.
Response: d
Score: 1 out of 1 Yes

Question 7
 Which is not included in the term “residential units”?
a. apartments and houses & lots used for residential purposes
b. buildings or parts or units thereof used solely as dwelling places
c. Pension houses.
d. dormitories, rooms and bed spaces
Response: c
Score: 1 out of 1 Yes

Question 8
 The input tax on purchases of goods, properties or services related to zero-rated sale
shall be available as
a. input tax credit
b. tax credit certificate
c. tax refund
d. All of the above
Response: d
Score: 1 out of 1 Yes

Question 9
 Which of the following importation is exempt from VAT on importation?
a. Importation of professional instruments and implements for barter or sale,
accompanying such persons, or arriving within a reasonable time.
b. Importation of vehicles, vessels, aircrafts, machineries and other similar goods for
use in manufacture.
c. Importation of professional instruments and implements in commercial quantity
accompanying such persons, or arriving within a reasonable time..
d. Importation of goods that are brought from their former place of abode, by persons
who are actually coming to settle in the Philippines and that the goods imported are
exempt from payment of duties and taxes.
Response: d
Score: 1 out of 1 Yes

Question 10
 The aggregate acquisition cost of depreciable assets in any calendar month refers to
the total price, excluding the VAT, agreed upon for one or more assets acquired and not
on the payments actually made during the calendar month.
Statement 2 - An asset acquired on installment for an acquisition cost of more than
P2,000,000.00, excluding the VAT, will be subject to the amortization of input tax
despite the fact that the monthly payments/installments may not exceed P1,000,000.00.
Statement I Statement II
a. True True
b. True False
c. False True
d. False False
Response: a
Score: 1 out of 1 Yes

Question 11
 Which is subject to VAT?
a. Transport of passengers, goods or cargo by international carriers.
b. Sale, importation or lease of passenger or cargo vessels and aircraft, including
engine, equipment and spare parts thereof for domestic or international transport
operations.
c. Importation of fuel, goods and supplies by persons engaged in international shipping
or air transport operations from a port in the Philippines to other port in the Philippines .
d. Services of banks, non-bank financial intermediaries performing quasi-banking
functions, and other non-bank financial intermediaries such as money changers and
pawnshops, subject to percentage tax under Secs. 121 and 122, respectively, of the
Tax Code.
Response: c
Score: 1 out of 1 Yes

Question 12
 Where a VAT registered person purchases or imports capital goods, which are
depreciable assets for income tax purposes, the aggregate acquisition cost of which
(exclusive of VAT) in a calendar month exceeds One Million pesos (P1,000,000.00),
regardless of the acquisition cost of each capital good, shall be claimed as credit
against output tax. statements is false?
a. If the estimated useful life of a capital good is five (5) years or more - The input tax
shall be spread evenly over a period of sixty (60) months and the claim for input tax
credit will commence in the calendar year when the capital good is acquired.
b. If the estimated useful life of a capital good is less than five (5) years — The input tax
shall be spread evenly on a monthly basis by dividing the input tax by the actual number
of months comprising the estimated useful life of the capital good.
c. Capital goods or properties refers to goods or properties with estimated useful life
greater than one (1) year and which are treated as depreciable assets under Sec. 34(F)
of the Tax Code, used directly or indirectly in the production or sale of taxable goods or
services.
d. The aggregate acquisition cost of depreciable assets in any calendar month refers to
the total price, excluding the VAT, agreed upon for one or more assets acquired and not
on the payments actually made during the calendar month.
Response: a
Score: 1 out of 1 Yes

Question 13
 The following data are taken from the books of accounts of a VAT-registered taxpayer:
Third quarter : Sales P 1,000,000
Purchases 800,000
Excess input VAT as of end of
second quarter 25,000
Fourth quarter : Sales P 1,500,000
Purchases 1,100,000
How much is the VAT payable (excess input tax) for the third quarter using 12% VAT
rate?
a. P 36,000 c. ( P 5,000 )
b. P 24,000 d. ( P 1,000 )
Response: d
Score: 1 out of 1 Yes

Question 14
 A lessor rents his 5 commercial and 10 residential units for monthly rent of P60,000
and P15,000 per unit, respectively. During the taxable year, his accumulated gross
receipts amounted to P5,400,000 (P3,600,000 from commercial units and P1,800,000
from residential units) Which statement is false?
a. He is subject to VAT with respect to P3,600,000 since it exceeded P3,000,000.
b. The P1,800,000 accumulated receipts from residential units are not subject to
Percentage Tax.
c. The P1,800,000 accumulated receipts from residential units are exempt from VAT
since the monthly rent is not more than P15,000.
d. The P1,800,000 accumulated receipts from residential units are exempt from VAT
since the monthly rent is not more than P15,000 but is subject to Percentage .
Response: d
Score: 1 out of 1 Yes

Question 15
 (Phil. CPA) The following are the data of City Appliances Marketing Co. for the last
quarter of 2007:
Sales up to December 15, total invoice value P 319,200
Purchases for November up to December 15,
net of input taxes 215,000
Additional information: On December 16, 2007, the City Appliances Marketing Co.
retires from its business. The inventory valued at P190,000 is taken and transferred to
New City Appliances Co. There is a deferred input tax of P3,500 for the third quarter.

How much is the total value-added tax due from the City Appliances Marketing Co. for
its operations in the last quarter and its retirement from business using 12% VAT rate?
a. P 33,004 c. P 27,700
b. P 28,900 d. P 27,089
Response: c
Score: 1 out of 1 Yes

Question 16
 A VAT-registered taxpayer engaged in the supply of services has the following data
taken from its books for the month of January 2007:
Accounts receivable, January 1, 2007 P 560,000
Sales on account for the month of January 1,000,000
Cash sales for the month of January 300,000
Accounts receivable, January 31, 2007 784,000
How much is the output tax for the month of January, 2007 using 12% VAT rate?
a. P 156,000 c. P 129,120
b. P 132,000 d. P 110,000
Response: b
Score: 1 out of 1 Yes

Question 17
 Statement 1 - Sales to persons or entities whose exemption under special laws or
international agreements to which the Philippines is a signatory effectively subjects such
sales to zero rate.
Statement 2 - A zero-rated sale of service (by a VAT-registered person) is a taxable
transaction for VAT purposes, but shall not result in any output tax.
Statement I Statement II
a. True True
b. True False
c. False True
d. False False
Response: a
Score: 1 out of 1 Yes

Question 18
 Statement 1 - The gross receipts from rentals not exceeding P15,000.00 per month per
unit shall be exempt from VAT regardless of the aggregate annual gross receipts. It is
also exempt from the 3% percentage tax.
Statement 2 - The gross receipts from rentals exceeding P15,000.00 per month per unit
shall be subject to VAT if the aggregate annual gross receipts from said units only
exceeds P3,000,000.00. Otherwise, the gross receipts will be subject to the 3% tax
imposed under Section 116 of the Tax Code.
Statement I Statement II
a. True True
b. True False
c. False True
d. False False
Response: a
Score: 1 out of 1 Yes

Question 19
 The following transactions if without actual exportation shall be considered
constructively exported except for
a. sales to manufacturing warehouses of resident foreign corporations.
b. sales to export processing zones.
c. sales to registered export traders operating bonded trading warehouses supplying
raw materials in the manufacture of export products under guidelines to be set by the
Board in consultation with the Bureau of Internal Revenue (BIR) and the Bureau of
Customs (BOC).
d. sales to diplomatic missions and other agencies and/or instrumentalities granted tax
immunities, of locally manufactured, assembled or repacked products whether paid for
in foreign currency or not.
Response: a
Score: 1 out of 1 Yes

Question 20
 WPM is a rice dealer. His total annual gross sales and/or receipts do not exceed Three
Million (P3,000,000.00). Which is false?
a. WPM is a VAT-exempt taxpayer
b. If he elects to pay the 8% commuted tax, he shall not be allowed to avail of the
optional registration for VAT of exempt person provided by Section 236(H) of the 1997
Tax Code, as amended.
c. He may elect to avail of the optional registration for VAT of exempt person under
Section 236 (H) of the 1997 Tax Code, as amended. Upon election of such option, all
his transactions will now be subject to VAT and he shall not be entitled to cancel his
VAT registration for the next three (3) years.
d. WPM may elect to pay the 8% commuted tax rate on gross sales or receipts and
other non-operating income in lieu of the graduated income tax rates and the
percentage tax under Section 24(A)(2)(b) of the 1997 Tax Code, as amended, since his
gross sales or
receipts did not exceed Three Million Pesos (P3,000,000) during the taxable year.
Response: c
Score: 1 out of 1 Yes
Question 21
 Sweet Tooth, Inc. manufactures refined sugar. The following selected data are taken
from its books:
Sale of refined sugar, net of VAT P 2,000,000
Purchase of sugar cane from farmers 500,000
Purchases of packaging materials, gross of VAT 784,000
Purchase of labels, gross of VAT 112,000
Advance payment of VAT before release from refinery 60,000
How much is the VAT payable using 12% VAT rate?
a. P 124,000 c. P 64,000
b. P 84,000 d. P 20,000
Response: c
Score: 1 out of 1 Yes

Question 22
 The lessor has an accumulated gross receipts during the taxable year amounted to
P6,200,000 (P3,600,000 from commercial units and P2,600,000 from residential units
with monthly rental of P20,000). Which is false?
a. He is subject to VAT with respect to P3,600,000 from commercial units since the
accumulated gross receipts during the taxable year exceeded P3,000,000.
b. He is subject to VAT with respect to P6,200,000 from residential units since it
exceeded P3,000,000.
c. He is not subject to VAT with respect to P2,600,000 from residential units since it did
not exceed P3,000,000 although its monthly rental exceeded P15,000.
d. He is not subject to Percentage Tax.
Response: c
Score: 1 out of 1 Yes

Question 23
 Which is not a zero-rated transaction?
a. Sale of power or fuel generated through renewable sources of energy such as, but
not limited to, biomass, solar, wind, hydropower and geothermal.
b. Sale of power or fuel generated through renewable sources of energy
such as, but not limited to, steam, ocean energy, and other emerging sources using
technologies such as fuel cells and hydrogen fuels.
c. Sale of services related to the maintenance or operation of plants generating said
power.
d. Sales to persons or entities whose exemption under special laws or international
agreements to which the Philippines is a signatory.
Response: c
Score: 1 out of 1 Yes

Question 24
 The following sales of real properties are exempt from VAT, except:
a. Sale of Condominium Unit valued at One Million Five Hundred Thousand Pesos
(P1,500,000.00) and below.
b. Sale of house & lot and other residential dwellings valued at Two Million Five
Hundred Thousand Pesos (P2,500,000.00) and below,
c. Sale of real properties utilized for parking space P3,000,000.
d. Sale of real properties utilized for socialized housing - lot up to P180,000.
Response: c
Score: 1 out of 1 Yes

Question 25
 Statement 1 - The exportation of goods on consignment shall not be deemed export
sales until the export products consigned are in fact sold by the consignee.
Statement 2 - sales of goods, properties or services made by a VAT-registered supplier
to a BOI-registered manufacturer/producer whose products are 100% exported are
considered export sales.
Statement I Statement II
a. True True
b. True False
c. False True
d. False False
Response: a
Score: 1 out of 1 Yes

Question 26
 Stockhouse, a VAT-registered stockbroker and dealer in securities, has the following
data for the first quarter of 2007 (net of applicable taxes):
Commissions received from representing buyers P 200,000
Commissions received from representing sellers 300,000
Selling price of shares of stock:
Hope Corp. held as inventory 400,000
Faith Corp. held as investment 600,000
Acquisition cost:
Hope Corp. held as inventory 300,000
Faith Corp. held as investment 350,000
Operating expenses connected with VAT-subject
transactions:
Supplies bought from VAT-registered supplier 70,000
Salaries of employees 90,000
Electricity 5,000
Water 3,000
What is the VAT payable for the quarter using the 12% VAT rate?
a. P 63,600 c. P 62,640
b. P 63,600 d. P 51,840
Response: c
Score: 1 out of 1 Yes

Question 27
 A VAT-registered trader has the following transactions:
Sales of good to private entities, net of 12% VAT P 2,500,000
Purchases of goods sold to private entities,
gross of 12% VAT 896,000
Sales to a government owned corporation (GOCC),
net of 12% VAT 1,000,000
Purchases of goods sold to GOCC, net of 12% VAT 700,000

How much is the VAT payable?

a. P 244,000 c. P 120,000
b. P 204,000 d. None
Response: b
Score: 1 out of 1 Yes

Question 28
 Which is true?
a. The sale of goods, supplies, equipment and fuel to persons engaged in international
shipping or international air transport operations is a zero-rated sale.
b. The sale of goods, supplies, equipment and fuel to persons engaged in international
shipping or international air transport operations is a subject to a 12% VAT
c. The sold goods, supplies, equipment, machineries and fuel to persons engaged in
international shipping or international air transport operations be used exclusively for
international shipping or air transport operations are all zero-rated transactions.
d. The sold goods, supplies, equipment, and fuel to persons engaged in international
shipping or international air transport operations shall be used exclusively for
international shipping or air transport operations shall be partly zero-rated and subject to
12% VAT.
Response: a
Score: 1 out of 1 Yes

Question 29
 . Statement 1 - Sale or lease of goods or properties or the performance of services of
non-VAT-registered persons, other than the transactions mentioned in paragraphs (A)
to (AA) of Sec. 109(1) of the Tax Code, the gross annual sales and/or receipts of which
does not exceed the amount of Three Million Pesos (P3,000,000.00) is exempt from
VAT.
Statement 2 - Sale or lease of goods or properties or the performance of services of a
VAT-registered person, other than the transactions mentioned in paragraphs (A) to (AA)
of Sec. 109(1) of the Tax Code, the gross annual sales and/or receipts of which does
not exceed the amount of Three Million Pesos (P3,000,000.00) is subject to VAT
.
Statement I Statement II
a. True True
b. True False
c. False True
d. False False
Response: a
Score: 1 out of 1 Yes

Question 30
 A lessor rents his 15 residential units for P14,500 per month. During the taxable year,
his accumulated gross receipts amounted to P2,610,000. Which is false?
A. He is not subject to VAT since the monthly rent per unit does not exceed P15,000.
B. He is also not subject to 3% Percentage Tax.
C. He is not subject to VAT whether he is a VAT registered entity or not.
D. He is subject to VAT whether he is a VAT registered entity or not.
Response: d
Score: 1 out of 1 Yes

Question 31
 The following sales of real properties are exempt from VAT, except:
a. Sale of real properties not primarily held for sale to customers or held for lease in the
ordinary course of trade or business.
b. Sale of real property not primarily held for sale to customers or held for lease in the
ordinary course of trade or business but the is used in the trade or business of the
seller.
c. Sale of real properties utilized for low-cost housing up to P3,000,000
d. Sale of real properties utilized for socialized housing -house and lot up to P450,000.
Response: c
Score: 0 out of 1 No

Question 32
 Which is considered as an actual"Export Sales "?
a. The sale and actual shipment of goods from the Philippines to a
foreign country, irrespective of any shipping arrangement that may be agreed
upon.
b. The sale of raw materials or packaging materials to a non-resident buyer for delivery
to a resident local export-oriented enterprise to be used in manufacturing, processing,
packing or repacking in the Philippines of the said buyer's goods, paid for in acceptable
foreign currency, and accounted for in accordance with the rules and regulations of the
BSP;
c. The sale of raw materials or packaging materials to an export oriented enterprise
whose export sales exceed seventy percent (70%) of total annual production. Any
enterprise whose export sales exceed 70% of the total annual production of the
preceding taxable year shall be considered an export-oriented enterprise.
d. The sale of goods, supplies, equipment and fuel to persons engaged in international
shipping or international air transport operations: Provided, That the goods, supplies,
equipment, and fuel shall be used exclusively for international shipping or air transport
operations.
Response: a
Score: 1 out of 1 Yes

Question 33
 Upon satisfaction of conditions of successful establishment and implementation of an
enhanced VAT refund system, which of the following transactions is subject to 12%
VAT?
a. Processing, manufacturing or repacking goods for other persons doing business
outside the Philippines, which goods are subsequently exported, where the services are
paid for in acceptable foreign currency and accounted for in accordance with the rules
and regulations of the BSP
b. Services other than processing, manufacturing or repacking rendered to a person
engaged in business conducted outside the Philippines or to a nonresident person not
engaged in business who is outside the Philippines when the services are performed,
the consideration for which is paid for in acceptable foreign currency and accounted for
in accordance with the rules and regulations of the BSP
c. Services rendered to persons or entities whose exemption under special laws or
international agreements to which the Philippines is a signatory effectively subjects the
supply of such services to zero percent (0%) rate
d. Services rendered to persons engaged in international shipping or air transport
operations, including leases of property for use thereof: Provided, that these services
shall be exclusively for international shipping or air transport operations
Response: d
Score: 0 out of 1 No

Question 34
 A lessor rents his 15 residential units for P15,500 per month. During the taxable year,
his accumulated gross receipts amounted to P2,790,000. Which statement is true?
a. He is not subject to VAT since the monthly rent per unit exceeds P15,000.
b. He is also not subject to 3% Percentage Tax.
c. He is not subject to VAT since his accumulated gross receipts of P2,790,000 did not
exceed P3,000,000
d. He is neither subject to VAT nor to 3% Percentage Tax.
Response: c
Score: 1 out of 1 Yes

Question 35
 Which is false?
a. Construction in progress (CIP) is the cost of construction work which is not yet
completed. CIP is not depreciated until the asset is placed in service.
b. CIP is not depreciated until the asset is placed in service and normally, upon
completion, a CIP item is reclassified and the reclassified asset is capitalized and
depreciated. CIP is considered, for purposes of claiming input tax, as a purchase of
service, the value of which shall be determined based on the progress billings.
c. Until such time the construction has been completed, it will not qualify as capital
goods as herein defined, in which case, no input tax credit on such transaction can be
recognized in the month the payment was made.
d. Once the input tax has already been claimed while the construction is still in
progress, no additional input tax can be claimed upon completion of the asset when it
has been reclassified as a depreciable capital asset and depreciated.
Response: c
Score: 1 out of 1 Yes

Question 36
 Which is true?
1 - All applications filed from January 1, 2018 shall be processed and decided within
ninety (90) days from the filing of the VAT refund application.
2 - All claims for refund/tax credit certificate filed prior to January 1, 2018 shall still be
governed by the one hundred twenty four (124)-day processing period.
a. 1 only
b. 2 only
c. Both 1 and 2
Response: a
Score: 1 out of 1 Yes

Question 37
 Sales to diplomatic missions and other agencies and/or instrumentalities granted tax
immunities, of locally manufactured, assembled or repacked products whether paid for
in foreign currency or not shall be subject to the twelve percent (12%) VAT and no
longer be subject to zero percent (0%) VAT rate upon satisfaction of the following
conditions:
1. The successful establishment and implementation of an enhanced VAT refund
system that grants and pays refunds of creditable input tax within ninety (90) days from
the filing of the VAT refund application with the Bureau.
2. All pending VAT refund claims as of December 31, 2017 shall be fully paid in cash by
December 31, 2019.
a. 1 only
b. 2 only
c. Both 1 and 2
d. Neither 1 nor 2
Response: c
Score: 1 out of 1 Yes

Question 38
 A taxpayer registered under the VAT system on January 2, 2007 after his sales
exceeded P1,5000,000 in the previous year. He became subject to VAT for the first
time. The following selected data were taken from his books:
Inventory, December 31, 2006 purchased from VAT-registered seller:
Cost P 60,000
Net realizable value 50,000
VAT paid on December 31, 2006 inventory 6,000
Inventory, December 31, 2006 purchased from
VAT-exempt seller 80,000
Sales, net of VAT 181,000
Purchases, net of VAT 70,000
How much was the VAT payable using 12% VAT rate?
a. P 13,320.00 c. P 5,892.86
b. P 7,320.00 d. P 4,992.86
Response: b
Score: 1 out of 1 Yes

Question 39
 Statement 1 - Sale or lease of goods or properties or the performance of services other
than the transactions mentioned in the preceding paragraphs, the gross annual sales
and/or receipts do not exceed the amount of Three Million Pesos (P3,000,000.00).
Statement 2 - Self-employed individuals and professionals availing of the 8% tax on
gross sales and/or receipts and other non-operating income, under Sections 24(A)(2)(b)
and 24(A)(2)(c)(2)(a) of this Code shall also be exempt from the payment of twelve
(12%) VAT.
Statement I Statement II
a. True True
b. True False
c. False True
d. False False
Response: a
Score: 1 out of 1 Yes

Question 40
 A lessor rents his 20 residential units for P15,500 per month. During the taxable year,
his accumulated gross receipts amounted to P3,720,000. Which statement is false?
a. He is subject to VAT since the monthly rent per unit exceeds P15,000.
b. He is also not subject to 3% Percentage Tax.
c. He is already subject to VAT since the accumulated earnings exceeded P3,000,000
d. None of the above.
Response: b
Score: 0 out of 1 No

Question 41
 The following are subject to a 12% VAT on their gross receipts except for
a. sale of electricity generated through coal by generation companies.
b. sale of electricity generated through geothermal plants by generation companies.
c. transmission by any entity including the National Grid Corporation of the Philippines
(NGCP).
d. distribution of electricity by distribution companies including electric cooperatives.
Response: b
Score: 1 out of 1 Yes

Question 42
 The following transactions shall be subject to the twelve percent (12%) VAT and no
longer be subject to zero percent (0%), except
a. The sale of raw materials or packaging materials to a non-resident buyer for delivery
to a resident local export-oriented enterprise to be used in manufacturing, processing,
packing or repacking in the Philippines of the said buyer's goods, paid for in acceptable
foreign currency, and accounted for in accordance with the rules and regulations of the
BSP;
b. The sale of raw materials or packaging materials to an export oriented enterprise
whose export sales exceed seventy percent (70%) of total annual production. Any
enterprise whose export sales exceed 70% of the total annual production of the
preceding taxable year shall be considered an export-oriented enterprise.
c. Sales to registered export traders operating bonded trading warehouses supplying
raw materials in the manufacture of export products under guidelines to be set by the
Board in consultation with the Bureau of Internal Revenue (BIR) and the Bureau of
Customs (BOC).
d. The sale of goods, supplies, equipment and fuel to persons engaged in international
shipping or international air transport operations
Response: d
Score: 1 out of 1 Yes

Question 43
 Mr. Joseph Koh signified his intention to be taxed at “8% income tax in lieu of the
graduated income tax rates and percentage tax under Section 116” in his 1st Quarter
Income Tax for 2018. However, his gross sales/receipts during the taxable year have
exceeded the VAT threshold as follows:
January Php 250,000.00
February 250,000.00 250,000.00
March 250,000.00 250,000.00 750,000.00
April 250,000.00 250,000.00
May 250,000.00 250,000.00
June 250,000.00 250,000.00. 1,500,000.00
July 250,000.00 250,000.00
August 250,000.00 250,000.00
September 250,000.00 250,000.00 2,2250,000.00
October 1,000,000.00
November 1,000,000.00
December 1,000,000.00 3,000,000.00
Total gross Sales/Receipts Php 5,250,000.00

Which is false?
a. Mr. JMLH lost the option to pay the 8% commuted tax rate when his gross
sales/receipts exceeded the three million threshold during the 4th Quarter.
b. For business tax purposes, he is subject to the 12% VAT prospectively starting
November 2018.
c. He is also required to update his registration from non-VAT to VAT on or before
November 30, 2018.
d. He is also required to update his registration from non-VAT to VAT on or before
January 15, 2019.
Response: d
Score: 1 out of 1 Yes

Question 44
 ABC Corporation sold capital goods on installment on October 1, 2018. It is agreed that
the selling price, including the VAT, shall be payable in five (5) equal monthly
installments with the first installment to be paid on October 1, 2018. The data pertinent
to the sold assets are as follows:
Selling price - P 5,000,000 (exclusive of VAT)
Passed-on VAT - P 600,000
Original Cost of Asset - P 3,000,000
Accumulate Depreciation at the time of sale - P 1,000,000
Unutilized Input Tax (Sold Asset) - P 100,000

Which is false?
a. The input tax of P600,000.00 shall be spread evenly over a period of 60 months
starting on October 2018 of purchase.
b. If the depreciable capital good is sold/transferred within a period of five (5) years or
after the exhaustion of the amortizable input tax thereon, the entire unamortized input
tax on the capital goods sold/transferred can be claimed as input tax credit during the
month or quarter when the sale or transfer was made.
c. The monthly amortization
d. The VAT payable of the seller is P500,000.00
Response: d
Score: 0 out of 1 No

Question 45
 Statement 1 - Sales to persons or entities whose exemption under special laws or
international agreements to which the Philippines is a signatory effectively subjects such
sales to zero rate.
Statement 2 - A zero-rated sale of service (by a VAT-registered person) is a taxable
transaction for VAT purposes, but shall not result in any output tax.
Statement I Statement II
a. True True
b. True False
c. False True
d. False False
Response: a
Score: 1 out of 1 Yes

Question 46
 Which is of the following importation is exempt from VAT on importation?
a. Importation of professional instruments and implements, tools of trade, occupation or
employment, wearing apparel, domestic animals, and personal and household effects
belonging to persons coming to settle in the Philippines
b. Importation of professional instruments and implements, tools of trade, occupation or
employment, wearing apparel, domestic animals, and personal and household effects
belonging to Filipinos or their families and descendants who are now residents or
citizens of other countries
c. Importation of professional instruments and implements, tools of trade, occupation or
employment, wearing apparel, domestic animals, and personal and household effects
belonging to overseas Filipinos coming to settle in the Philippines.
d. All of the above
Response: d
Score: 1 out of 1 Yes

Question 47
 The following transactions shall be subject to the twelve percent (12%) VAT and no
longer be subject to zero percent (0%), except
a. The sale of raw materials or packaging materials to a non-resident buyer for delivery
to a resident local export-oriented enterprise to be used in manufacturing, processing,
packing or repacking in the Philippines of the said buyer's goods, paid for in acceptable
foreign currency, and accounted for in accordance with the rules and regulations of the
BSP;
b. The sale of raw materials or packaging materials to an export oriented enterprise
whose export sales exceed seventy percent (70%) of total annual production. Any
enterprise whose export sales exceed 70% of the total annual production of the
preceding taxable year shall be considered an export-oriented enterprise.
c. Sales to registered export traders operating bonded trading warehouses supplying
raw materials in the manufacture of export products under guidelines to be set by the
Board in consultation with the Bureau of Internal Revenue (BIR) and the Bureau of
Customs (BOC).
d. The sale of goods, supplies, equipment and fuel to persons engaged in international
shipping or international air transport operations
Response: d
Score: 1 out of 1 Yes

Question 48
 A lessor rents his 2 commercial and 10 residential units for monthly rent of P60,000
and P15,000 per unit, respectively. During the taxable year, his accumulated gross
receipts amounted to
P3,240,000 (P1,440,000 from commercial units and P1,800,000 from residential units)
Which is false?
a. The P1,440,000 from commercial units is not subject to VAT since it did not exceed
P3,000,000.
b. The P1,440,000 from commercial units is subject to 3% Percentage Tax.
c. The P1,440,000 from commercial units is not subject to 3% Percentage Tax.
d. On the other hand, the P1,800,000 accumulated receipts from the residential units
are not subject to Percentage Tax and exempt from VAT since the monthly rent is not
more than P15,000.
Response: c
Score: 1 out of 1 Yes

Question 49
 Which of the following transactions is subject to VAT?
a. Sale or lease of goods and services to senior citizens and persons with disabilities,
as provided under Republic Act Nos. 9994 (Expanded Senior Citizens Act of 2010) and
10754 (An Act Expanding the Benefits and Privileges of Persons with Disability),
respectively.
b. Transfer of Property pursuant to Section 40(C)(2) of the Tax Code, as amended.
c. Association dues, membership fees, and other assessments and charges collected
on a purely reimbursement basis by homeowners’ associations and condominium
corporations established under Republic Act No. 9904 (Magna Carta for Homeowners
and Homeowners’ Association) and Republic Act No. 4726 (The Condominium Act),
respectively.
d. Sale of precious gems to the Bangko Sentral ng Pilipinas.
Response: d
Score: 1 out of 1 Yes

Question 50
 Statement 1 - A VAT-registered person may, in relation to Sec. 236 (H) of the 1997 Tax
Code, as amended, elect that the exemption in Sec. 4.109-1(B) hereof shall notapply to
his sales of goods or properties or services.
Statement 2 - Once the election is made, it shall be irrevocable for a period of three (3)
years counted from the quarter when the election was made except for franchise
grantees of radio and TV broadcasting whose annual gross receipts for the preceding
year do not exceed ten million pesos (P10,000,000.00) where the option becomes
perpetually irrevocable.
Statement I Statement II
a. True True
b. True False
c. False True
d. False False
Response: a
Score: 1 out of 1