CPA REVIEW SCHOOL OF THE PHILIPPINES ‘Manila OPT, Excise Taxes, DST Dela Cruz/ De Vera /Liamado 1. Ais te owner of small variety store. His gross sales in any ove year do not exceed 3,000,000. He is tot VAT registered. The following data are taken fromthe books of the variety store forthe quarter ending March 31, 2018: ‘Merchandise inventory, December 31,2017 P1000 Gross sales 450,000 ¢ 9/ * 409 Purchase fom VAT -tegistered suppliers, goss of VAT 350,000 The percentage tx de i: a. P1000 2, P13.500 © P16 500 4. None 12 nthe third quarter of 2021, a twxpayer engaged in the sale of services whose annual gross receipts do ‘ot exceed P3,000,008, Kad the following data: AR Accounts receivable, beginning of the quarter P.50,000 4p ‘4 ‘Sales during the quarter 100,000 8 P| cue “*t ‘Accounts receivable, end of the quartet 75,000 “AF | 4° 109 cad ‘Purchase of supplies, total invoice amount 11,200 { ‘The percentage tax due for the quaner is: saga) Te 2 P2250 'b,P3,000 eP750 P6500 3. “A” operates ferryboat. During s particular quarter, its receipts consist of the following gross receipts (without VAT): ‘Transport of passengers 1P2,000,000 ‘Transport of goods “Transport of cargoes ‘The common carrier's tax payable is 1. P30,000, , P90,000, ©. P109,000 owe ger ator t 4, Vilage a shave, toe oun VATis: Coy LET ET (EPaso.000 190,000 « P100,000 4.P240,000 ‘5. person whose business i to keep automobiles for hire or keep them stored for use or order (& Keepers of garages . Taxicab operators \b. Common carrier 4. Tourist bus operator Which of the following statements is incorrect? (& Atarpayer whose eonual goss rceipts/sales exceed P3,000,000 shall pay VAT only ifhe is VAT- 1s Mopar yon tal por ciple ool need P,000000 bt who VAT sepiseed ‘shall pay VAT. Ba lea De imposed tgetir wit VAT. 4 Pvege ny be pose gee hex wx, 2. One of he ellowing is subject 0 common carer's tx Owners of bane 'b. Owners of animal-drawn two wheeled vehicles © Common cai by ld fer anspor of goods o cargoes (@ Conmmon caries by land foc anspor of passengers, Taxs3.148. The franchise tax of grantees of radio and television broadcasting whose annual gross recdipts of the preceding year do not excced P10,000,000 shall be & 2% ofthe gross reccipts _¢. 4% of the gross receipts (8 3% ofthe gross receipts 4. 5% ofthe gross receipts 9. One of the following isnot subject tothe 3% perceniage tax Intemational air cartier doing business in the Philippines Intemational shipping carer doing business in the Philippines .&, Domestic caries and kecpers of garage (@) Franchise grantee of electric utilities iyiy to VAT 10, Franchise grantees of city gas and water utilities are subject to franchise tax of | 92% b.3% 0.4% 4.5% 11 Amounts received for overseas dispatch, message or conversations originating from the Philippines are subject to a 3% franchise tax ef ', 10% overseas communication tax 10%. 12, A tax on the right or privilege to enter places of amusement 1 a VAT ‘Arusement tax | Franchise tax ‘Income tax 13, One of the following is not subject to amusement tex on gross reccipts a Disco houses —_¢. Professional basketball games b. Cockpits @Bowiing alleys 14, All ofthe following xcept one ae able othe “of 1% ck wanscton tox. Which ones ot? 4. Individual taxpayers, whether citizens or alien « Bsates and Tr | 1B. Corporate taxpayers, whether domestic or forcign (4) Dealers in secu 15, ABC Insurance Corporation, a domestic corporation, received the following premiunns (net gf any tax), INSURANCE Lis fie Mayjue Cash received 401,000 300.000» 30q000 Promissory notes Totals ‘The amount subject to percentage tax is 1 P4N0,000 (b)P500,000 ©. P900,000 D. The percentage tax due is (4)P10,000-b. Px,000 «©. 5,000 4. P20,000 ©. The ourput tax is a. P36,000 P24,000, ©P72.000 4.P120,000 16. ABC Corporation, a VAT-tegistered domestic corporation, is « holder of a franchise to operate transportation units on and. The reurds forthe month show cnet af wry ta)3 Largo Passenger 0 Gross receipts from transporting 2,000,000 3,000,000! = 7° VAESupplier —_Non-VAT Supplier Payments to ‘ROO, 000 300,000, The percentage tax due is 2.P150,000 b.P60,000 80,000 4.P144,000 17. Vein te receding number, but the franchise i or tan sea ‘anspor, within the Philippines, the payable is = aPiaao00 Pe00000 —e-Pasec00 ——@psogann Cup! aE Uec ed / - Te BW (00 (Aoow.e + rcc0006) FA Deed rm a (aw) 18. Using the preceding number, but the route is which of tie following is correct? Som he Fling wo ee es Thy orporation is exempt from VAT. b. The snpraion i satjet wo porcaoge we (G4 The ouput vats, hee the smporetn csnot im apt © May claim refund or credit the input tne against oes ntl revenue taxes p meearce 19. "A" is a holder of franchise to selVelecricity, In a particular quarter, its gross receipts amounted 10 3.000.000 from the sale of electricity. It has also receipts ‘trom the lease of its auditorium and theater rrp, The rent tx cfr the quer (pos vu Ua) ‘a P40,000 ».P60,000, «. P100,000 (None k eee tnt OOF Inside the cockpit he stso operates restaurant, Data forthe paticlar quarter in 2019 follow: | Gross receipts: ' Cockpit operations 300,000 Restaurant operations: Sale of food 100,000 , roo | Sale of liquor 150,000, | ‘The amusement tax due from A is wt aw ish | 2. P0,000, (b,P135,000 ‘6. P225,000 4,775,000 71, Using the above dais, except that te restaurant isnot owmed by A but is owned by another person, B, not VAT-registered and ce ‘annual gross sales never exceeded P3,000,000. The amusement tax due from Ais The au jh fern b.P135,000 ©. P225,000 4. P75,000 Continuing the preceding number, the percentage tx due fom Bis 790.008 re P35 00 «225,000 (4,P7,500 aero ¥4d Fesident citizen, promoted a world boxing championship in Manila featuring B, Filipino 2» anion, One meir crnet oF.O ON ade eB «Fon 2,000,000. The amusement tax due is tyamiivi 9 #c_Ii« om b. P500,000 ©. P300,000 d. P900,000, 24, Assuming that the ahove data is not_a world championship but Philippine national boxing " championship, how much is the amusement tax? ‘a None (b, 500,000 ©. P300,000 4. P990,000 fronece veh > MO CHO| fie 25.*A" isaradio-TV boadcsing fanhise grates. Du . ng the peeing years gros reps didnot eet P10,00 000, During ters quer te cuent year inde flowy daa Gross receipts, sale of airtime 2,000,000; i Gross seus fists cormunieaon ates 20000! ie ae usiness expenses 700,000 ‘The franchise tax due forthe frst quarter is Sedma Sie ti igcte uct 26. A horserasing enthusiast as the following winnings during a particular racing day | Total winnings P10,000 | Cost of winning tickets 500. ‘The OPT on winnings is bes uni) Avo 7th a. P1,000 ».P400 = PIs 4.2240 27. Using the data above, but the tial winnings came from double bet, tbe percentage tex on winnings is 4. P1,000 . 400 ¢ (P38 ane yl | 28. MuniCity Bank has the following income/loss isms fer she months of March and April 2421 March 2021 ntl Interest income with maturity of ess than 5 years (hall 70,000 | Rental income 20,500 | [Net trading loss £20,000) ‘Apel 2021 terest income with maturity of ess than 5 years F 80,000 Rental income 90400 Net trading gain 0,000 af % How much RT ist liable for in Maeh 202 end in April 202 a) 3,500; P5,600 1 bb) 9,100; 5,600 | ©) 9,100; #12400 | «), None of the above, Interest income with maturity of less than 5 years Rental income ‘Net wading pain TOTAL GRE Texansil 2021 Se cco Tetcrest income with matwity of fess than S years TE MuniCity Bank shall have, by the end of December 2021, a eumulative na ‘Rading loss, such trading loss cannot be caried over to taxable year 202, Such cumulative trading loss eannot be deducted against any trading gain ‘eamed on any taxable year other than the year it was incurred, 29-31. ABC Corporation, a closely held corporation, hasan authorized capital stock of 1,000,000 shares with a par value of PlO0/share as of January i, 2018. Of the 1 .000,000 authorized Shares, 250,000 thereof were subscribed and fully paid by the following stockholdess: A = 150,000 B- 50,000 © = 25,000 Die | 128500: EB - 12500 Total shares outstanding 250,000 (On March 1.2018, ABC Corporation finally decided to conduct: its unissued shares to the investing public at PISO/share. At Aan at PL an IPO and initially offered 250,000 of the IPO, two of the existing stockholders, dB, likewise decided to sell their entire 150,000 and 50,000 shares, respectively, to the public also 50/share. & The percentage tax due for the primary offering is a. P375,000 ». P750,000 «. P1,500,000 PO . The percentage tax due for the sale of As shares is ‘use elf $00,000 shares 250,000 shares 500,000 shares ~ 50% Texte = 1% 250,000 shares x PISO. x 1% = 375,000 Ae ee ee 225,000, 1b. P450,000 ‘e, P900,000 4. PO 150,000 shares 594, Toxrte = 2% 150,000 shares x PISO x 2% = 450,000 Tex93-16©. The percentage tax due for the sale of B's shares is .P75,000 ’. P150,000 «.P300,000 4. PO 50,000 shares _ ‘500,000 shares 1% Texme = 4% 50,000 shares x PISO. «x 4% = 300,000 30, Later, on August 1, 2018, another stockholder C, sold his 25,000 shares to the public subsequent to the TPO at P200.00/share. The pereemtage tax due is &) P30,000 ’.P50,000 ©. P100,000 4. F200,006 seco + recline {Io x17) 31. Using the preceding number, on September 1, 2018, ABC Corportion again decided to increase capitalization by offering another 300,000 of unissued shares to the public at P2)0.00/share consequently bringing the total issued shares to 800,000 shares, the percentage tax due is | a. P600,000 'b. P1200,000 | &.P2.400000 (0 \ ak ojo cele \ 432, In. number 29, if the TPO was held on or after September 15,2024, in pereentage waxes dud on the sale Ered by ABC Corporation, shareholder A, end siarchiderBchvugh the IPO shal to: a. 675,000 b. 71350000 «PO (4) None of theabote 33. Sale, importation, printing or publication of books aud any newspaper, magazine, review, or bulletin which appears at regular intervals with fixed prices for subserigtion and sale, and which is pot devoted principally to the publication of paid advertisernents is: ‘8) Subject to VAT and OPT | bb) Subject to VAT, exerapt from OPT (©) Exempt from VAT and OPT <4) Exempt from VAT, subject to OPT | 4A. Allan Drinks Corpora, a manufacturer of carbonsted drinks, will femove from {ts place of reduction 200 cates of i beverage containing high fractoxe com syrup C'HECS) and Anon-calric ‘case contains 6 boils of 1 ier each, The excise tc js P12Gter, Compute the a) P21,600 Solutio b) P25,400 ©) PA3,100 Number of eases 4) None of the above. x Number of botiles per ease ‘Total number of bottles x Liters/bottle ‘Total volume in liters x Specific tax rate | ‘Totul excise tax‘Computation of VAT, Excise Tax, and CWT (35)Statement I: The tax base for the excise tax excludes the VAT and the excise tax. Statement 2: The tax base for the VAT includes the excise tax. Statement 3: The tax base for the CWT excludes the VAT and the excise tax. @ Allare true. *(b) Al ae false. (©) 2are true. (@) 2are false. hod Gren PR ferya Ce (36) Ms, Chona decided to undergo a noselift procedure... She availed of the services of Belat Clinic which is owned by Bole Medical Corporation, and located outside a hospital. Belat Clinic charged. Ms. Chona P50,000, inclusive of VAT but exclusive of the 5% excise tax, for the service rendered. ‘Compute the correct output VAT and the excise tax to be charged by Belat Clini. (a) P5.625, 92.232 (b) P5,600, P2,200 (©) P5,620, 92,230 (4) None of the above (Original amount charged (inclusive of VAT) 50,000 Gross receipt, net of 12% VAT (P50,000/1.12) 44,643, Add: 5% excise tax (P44,643 x 5%) 2,232 VAT Base, inclusive of excise tax 46,875, 12% VAT (P46,875 x 1296) P 5,625 67) In number 36, if 15% CWT on professional income payments is withheld by Ms. Chona, how ‘much will the Belat Clinic collect: (a) P4584, (b) P52,500 (©) 46,906 (@) None of the above ‘Original amount charged (inclusive of VAT) 50,000, Gross receipts, net of 12% VAT (PS0,000/1.12) 44,643 Add: 5% excise tx (P44,643 x 5%) 2.232 VAT Base, inclusive of excise tax 46,875 ‘Add: 129% VAT (P46,875 x 12%) 5,625 Less: 15% CWT (P44,643 x 15%) 6,696 Amount to be collected P4504 38. To improve her body image, Loma decided to undergo a liposuction procedure. She sought the services of Body Beautiful Clinic. Body Beautiful charged her the amount of P50,000, inclusive of the VAT and the 5% excise tax. Compute the VAT and the excise tax therein, ) VAT: £5,304 0) VAT: 5,625; Excise tax: P2,232 ) None of the above. Taxg3.14Solution: Original amount charged (inclusive of VAT) cy coo Gross receipts, net of 12% VAT but inclusive yup ‘of 3% excise tax (P50,000/1.12) Gross receipts, net of 12% VAT and the yreit excise 1x (P,643/1.05) 12% VAT (P44,645 x 12%) xi Excise tax (P42,517 x 5%) cas | 39-40) | “Jadus Scion 179 ofthe Tax Code, on every otginal issue of doin insuuments, there shal be coer. ‘documenta stam ax of One Peso and ify ceizwn (PL sO). on cach Two Hundred Psp F200)" adtional par thereat, ofthe issue price of any such debt instremcat | Provided, that for sich debt instruments with terms of ess than one year, te documentary Hamp Provide sal Ge ofa propordonal amount in accordance with the rao of its term in rubber of days to tree hundred sixty (365) days ee 1 39. A promissory note is issued with a face value of P250,000 witha term of 2 yeus. The DST dues: a) P1875, ) P2,000 ) P3100 | 4) None ofthe above. Solution: 5000 1gs0 x Piso = Mar 30.0 1280 x PLS0 = PBs | 40. promissory notes issued witha fee value of P250.000 with a erm of 120 days; TAS DST due a) Pols by P500.88 | ) P389.29 ) DST is an excise tax because it is imposed on the tmnsaction eater °~ than on the document, 45) ABC Corporation finally decided to conduct an IPO and initially offered 250,000 of ts unissued shares With par value of P100/share tothe investing public at PlSO/stare arts TPO, shareholder A decided {0 sell his 150,000 shares also at P150/share. ) The DST due on the primary offering is a P250,000, ». P750,000 © PI,500,000 4. PO DST on original issuance: DST rate: 2.00 Per £200 of par value ‘Total par value of 250,000 shares at P100 par value /share Divided by 25,000,000 2 m0 75.000 Multiplied by x F2.00_ Dst —F50.000- b) The DST duc on the sale of A’s shares is a. P225,000 b.PLI2.500 ©. P900,000 4. Po | DST on sale | DST rate: PL.SO. Per P200 of par value | Total par value of 150,000 shares at P100 par value /share 15,000,000 | | Divided by ___+ F200 75,000 |] Maltiptied by x Pst DST ——— MT OF on erin saute gp dacs Me on cach doo, or prachinal est 0) AP yorvmdue Cy Gah trdrs of hcl 5 or : ore cea colt IM AL agit oF Chaya lo Yor vali ae au vst Ny hu Ye catty pubes y Uv gall req ewok thar cat oy dlock Ai 3 ia Tax 93-1410 44, The following transfers of shares of stock shall also be subject to DST under Seotion 175 of the Tax (@) Transfer pursuant toa Deed of Donation; (©) Transfer pursuant to a will ofa decedent as approved by a probate court in a judicial settlement ofan estate; (©) When an heir, whether ina judicial or extra-judicial settlement of an estate, specifically waives ‘or renounces his/her share in an inheritance in the form of shares of stock. (@ Allof the above, (©) None of the above. 45, Sweet Foot Massage Parlor is pot VAT-reistered and its annual gross receipts do not exceed 12,500,000. Lolo Chris, a senior PWD, went to Sweet Foot Massage to augment his physical yy. After the massage, he presented his PWD ID card to get the 20% discount. When he was ‘shown the bill, he was surprised to soe that while the establishment gave him a 20% discount, it was charging him the 3% other percentage tax ("OPT"). (A) Lolo Chris should present his Senior Citizen ID Card to be exempted from the 3% OPT. Lolo Chris may refuse to pay as he is also entitled to exemption from payment of the OPT. (© Loto Chis is abl o pay the OFT asthe exemption granted by the law fom payment of indirect ‘business taxes only covers VAT. (D) None of the above. ‘TheEnatt! Tax9344