TAX2

Which of the following is incorrect?

[STATEMENT 1:] The tax base for the business tax is the taxable income.
[STATEMENT 2:] The Value Added tax is present in every stage of distribution
process but not in production process.
Both statements

Which of the following is correct?

[STATEMENT 1:] Value Added Tax is an indirect tax. The liability to pay is shifted
and borne by the final consumer.
[STATEMENT 2:] Input tax means the Vat on or paid by a Vat- registered on
importation of goods or local purchase of goods, properties or services, including
lease or use of property in the course of his trade or business.
Only statement 2

Which of the following is incorrect?

[STATEMENT 1:] The term in the course of trade or business means the regular
conduct or pursuit of a commercial or economic activity, including transactions
incidental thereto, by any person regardless of whether or not the person
engaged therein is a non-stock, non-profit private organization (irrespective of the
disposition of its net income and whether or not it sells exclusively to members
or their guests), or government entity.
[STATEMENT 2:] In case of importation, the importer is the liable for the payment
of VAT.
None of the statements

Which of the following is correct?

[STATEMENT 1:] Gratuitous transfers are not subject to business taxes.
[STATEMENT 2:] Importation of goods for personal use is not subject to VAT.
Only statement 1

Which of the following is incorrect?

[STATEMENT 1:] Excise taxes must not be imposed together with VAT.
[STATEMENT 2:] VAT payable is the excess of output tax over input tax.
Only statement 1

Which of the following is correct?

[STATEMENT 1:] Output tax means the VAT due on the sale, lease or exchange of
taxable goods or services by any person registered or required to register.
[STATEMENT 2:] When a taxpayer is subject to VAT, it cannot be subjected to
other percentage tax but can be subject to excise tax.
Both statements

Which of the following is incorrect?

[STATEMENT 1:] Transfer not in the course of trade or business is subject to
income tax but not subject to business tax.
[STATEMENT 2:] Business taxes is imposed in addition to income taxes. It only
means that those business who are exempted to income tax because of their
losses is not also subject to business tax.
Only statement 2

Which of the following is incorrect?

[STATEMENT 1:] The seller is the one statutorily liable for the payment of the tax
but the amount of the tax may be shifted or passed on to the buyer, transferee or
lessee of the goods, properties or services.
[STATEMENT 2:] Value Added Tax (VAT) is a tax on consumption levied on the
sale, barter, exchange or lease of goods or properties and services in the
Philippines not in the course of trade or business.
Only statement 2

Which of the following is correct?

[STATEMENT 1:] Isolated Services of a non resident alien is not subject to VAT.
[STATEMENT 2:] Value added tax is based on gross sales but whenever a
business incurs losses, they are no longer subject to VAT.
None of the statements

Which of the following is incorrect?

[STATEMENT 1:] Those business whose gross sales or receipts exceeds P3
millions is subject to VAT
[STATEMENT 2:] Those business whose gross sales or receipts does not exceeds
P3 millions is subject to VAT if it opted to register as a VAT registered taxpayer.
None of the statements

Which of the following is correct?

[STATEMENT 1:] Business Taxes are imposed whenever a business is being
pursued. Without a business, business taxes cannot be imposed.
[STATEMENT 2:] Isolated sale of an ordinary employee of his personal cellphone
is not subject to VAT.
Both statements

Which of the following is incorrect?

[STATEMENT 1:] The burden of the tax is borne by the final consumer although
the producers and suppliers of these goods and services are the ones who have
to file their VAT returns to the Bureau of Internal Revenue. Hence, what is
transferred or shifted to the consumers is the liability to pay the tax and not the
tax burden.
[STATEMENT 2:] Those business who suffers losses during the taxable year is
not subject to business tax but can be subject to Income tax.
Both statements

Ferson is a retailer of a construction materials. He sold his personal car to his

best friend at a low price.
Which of the following is correct?
[STATEMENT 1:] The transaction is an isolated transaction. It is subject to VAT.
[STATEMENT 2:] The transaction is an incidental transaction subject to VAT.
None of the statements

Which of the following is correct?

[STATEMENT 1:] A transaction without consideration is a business transaction
subject to business taxes.
[STATEMENT 2:] Incidental transactions are considered as transaction entered
in the ordinary course of trade or business.
Only statement 2

Marites is in love with Chiz mho zho. Because of her love with Chiz mho zho, she
gave him a brand new car in exchange for his love.
Which of the following is incorrect?
[STATEMENT 1:] The transaction can't be considered as business transaction.
Therefore, it is not subject to business taxes.
[STATEMENT 2:] The transaction is a transaction in the course of trade or
business subject to VAT.
Only statement 2
*

Which of the following is correct?

[STATEMENT 1:] In case of importation of taxable goods, the importer, whether
an individual or corporation and whether or not made in the course of his trade or
business, shall not be liable to VAT.
[STATEMENT 2:] Transfer, use or consumption not in the course of business of
goods or properties originally intended for sale or for use in the course of
business is considered as transaction deemed sale.
Only statement 2

Which of the following is correct?

[STATEMENT 1:] Distribution or transfer to Shareholders or investors as share in
the profits of the VAT-registered persons and payment to creditor of debt is a
transaction deemed sale subject to VAT.
[STATEMENT 2:] The output tax is computed by multiplying the gross selling
price by 12%, or multiplying the total amount indicated in the invoice by 12/112.
Both statements

Which of the following is correct?

[STATEMENT 1:] Real property held primarily for sale to customers or held for
lease not in the ordinary course of trade or business is subject to value added
tax.
[STATEMENT 2:] VAT on importation is imposed regardless of whether such
importation is personal or business use.
Only statement 2

Which of the following is correct?

[STATEMENT 1:] Consignment of goods if actual sale is made within 60 days
following the date such goods were consigned is a transaction deemed sale.
[STATEMENT 2:] In the case of importation, the importer is not the one liable for
VAT but the person who shall buy the imported goods.
None of the statements

Which of the following is correct?

[STATEMENT 1:] Gross selling price excludes the VAT.
[STATEMENT 2:] Where the customs duties are determined on the basis of the
quantity or volume of the goods, the value-added tax shall be based on the landed
cost excluding excise taxes, if any.
Only statement 1

Which of the following is correct?

[STATEMENT 1:] Gross selling price means the total amount of money or its
equivalent which the purchaser pays or is obligated to pay to the buyer in
consideration of the sale, barter or exchange of the goods or properties including
VAT.
[STATEMENT 2:] Sales discount granted and indicated in the invoice at the time
of sale and the grant of which depends upon the happening of a future event may
be excluded from the gross sales within the same quarter it was given.
None of the statements

Which of the following is correct?

[STATEMENT 1:] Retirement from or cessation of business, with respect to
inventories of taxable goods existing as of such retirement or cessation.
[STATEMENT 2:] To be subject to business tax, the sale must be related to
business or trade.
Both statements

Which of the following is correct?

[STATEMENT 1:] The sale should be consummated in the Philippines regardless
of the terms of payment made between the contracting parties.
[STATEMENT 2:] In the case of tax-free importation of goods into the Philippines
by persons, entities or agencies exempt from tax where such goods are
subsequently sold, transferred or exchanged in the Philippines to non-exempt
persons or entities, the purchasers, transferees or recipients shall not be
considered the importers thereof.
Only statement 1

Which of the following is correct?

[STATEMENT 1:] Value added tax is based on gross sales but whenever a
business incurs losses, they are still subject to VAT.
[STATEMENT 2:] Isolated Services of a non resident alien is subject to VAT.
Both statements

Which of the following is correct?

[STATEMENT 1:] Input tax means the Vat on or paid by a Vat- registered on
importation of goods or local purchase of goods, properties or services, excluding
lease or use of property in the course of his trade or business.
[STATEMENT 2:] Value Added Tax is a direct tax. The burden of payment borne
by the final consumer.
None of the statements

Which of the following is correct?

[STATEMENT 1:] Those business who suffers losses during the taxable year is
subject to business tax but not subject to Income tax.
[STATEMENT 2:] Input tax means the Vat on or paid by a Vat- registered on
importation of goods or local purchase of goods, properties or services, excluding
lease or use of property in the course of his trade or business.
Only statement 1

Which of the following is correct?

[STATEMENT 1:] Illegal expenses is included in the computation of Total Value
as the basis of value added tax in importation.
[STATEMENT 2:] Goods or properties include all tangible that are capable of
monetary estimation but not intangible objects.
Only statement 1

Which of the following is correct?

[STATEMENT 1:] To get the Value Added Tax given the invoice price, you must
directly multiply the invoice price to 12%.
[STATEMENT 2:] Pure Water, the leading distributor of distilled and purified
water, consumed some of its merchandise valued at P300,000 during the
company's team building activity. This transaction is a transaction deemed sale
subject to VAT.
Only statement 2

Which of the following is correct?

[STATEMENT 1:] ´Where the customs duties are determined on the basis of
Quantity or Volume of Goods, the landed cost should be used as a basis in
computing vat which includes invoice cost, freight, insurance, customs duties,
excise taxes, if any, and other legitimate charges, prior to removal of goods from
the customs custody.
[STATEMENT 2:] The total value used by the Bureau of Customs in determining
the tariff and customs duties (dutiable value) plus customs duties, excise taxes,
if any, and other legitimate charges. prior to removal of goods from the customs
custody.
Both statements

Ferson is a retailer of a construction materials. He sold his personal car to his

best friend at a low price.
Which of the following is incorrect?
[STATEMENT 1:] The transaction is an isolated transaction. It is not subject to
VAT.
[STATEMENT 2:] The transaction is an incidental transaction subject to VAT.
Only statement 2
Invoice Price: 10,976. Compute for the VAT.
1176

VAT Inclusive: 13,440. Compute for the VAT.

1440

VAT Exclusive: 18,000. Compute for the VAT.

2160

Net of VAT: 24,000. Compute for the VAT.

2880

Gross of VAT 40, 320. Compute for the VAT.

4320
*
Which of the following is incorrect?
[STATEMENT 1:] Common carriers by land with respect to their transport of
passengers by land shall be subject to VAT.
[STATEMENT 2:] Common carriers by air and sea with respect to their transport
of passengers will be subject to other percentage tax.
Both statements

Which of the following is incorrect?

[STATEMENT 1:] The term sale or exchange of services means the performance
of all kinds of services in the Philippines for others for a fee, remuneration or
consideration.
[STATEMENT 2:] Transportation contractors on their transport of goods or
cargoes, including persons who transport goods or cargoes for hire and other
domestic common carriers by land relative to their transport of goods or cargoes
is subject to VAT on sales of goods.
Only statement 2
Which of the following is incorrect?
[STATEMENT 1:] Gross receipt refers to the total amount of money or its
equivalent representing the contract price, compensation, service fee, rental or
royalty, excluding the amount charged for materials supplied with the services
and deposits applied as payments for services rendered and advance payments
actually or constructively received during the taxable period for the services
performed or to be performed for another person, excluding VAT.
[STATEMENT 2:] Actual receipt occurs when the money consideration or its
equivalent is placed at the control of the person who rendered the service
without restrictions by the payor.
Only statement 1

Which of the following is incorrect?

[STATEMENT 1:] Services of franchise grantees of electric utilities, telephone
and telegraph, radio and/or television broadcasting and all other franchise
grantees, except franchise grantees of radio and/or television broadcasting
whose annual gross receipts of the preceding year do not exceed P10,000,000.00,
and franchise grantees of gas and water utilities.
[STATEMENT 2:] On the sale of services, the tax base in computing the VAT is
the amount per invoice.
Only statement 2

Which of the following is incorrect?

[STATEMENT 1:] Dealer in securities merchant of stocks or securities, whether
an individual, partnership, or corporation, with an established place of business,
regularly engaged in the purchase of securities and their resale to customers. He
buys securities and sells them to customers with a view to the gains and profits
that may be derived therefrom.
CORRECT
[STATEMENT 2:]
Only statement 2

Which of the following is incorrect?

[STATEMENT 1:] Life insurance is subject to VAT
[STATEMENT 2:] Electricity sold by generation companies is subject to VAT.
Only statement 1

Which of the following is incorrect?

[STATEMENT 1:] Lending investors subject to VAT must be exclusively subject to
purely lending services.
[STATEMENT 2:] Proprietors, operators or keepers, of hotels, motels, rest
houses, pension houses, inns, resorts is subject to VAT in sale of goods.
Only statement 2

Which of the following is incorrect?

[STATEMENT 1:] A miller of palay into rice is subject to VAT.
[STATEMENT 2:] A restricted deposit in bank as a form to payment to an account
payable can be viewed as constructive receipt.
Both statements

Which of the following is incorrect?

[STATEMENT 1:] A domestic air carrier with respect to the carriage of goods and
cargoes is subject to VAT.
[STATEMENT 2:] A common carrier by land is not subject to VAT in terms of
carriage of passengers.
None of the statements

Which of the following is incorrect?

[STATEMENT 1:] Franchise of television with annual gross receipts of
P12,000,000 is not subject to VAT.
[STATEMENT 2:] Pawnshop is not subject to VAT.
Only statement 1

Which of the following is incorrect?

[STATEMENT 1:] Carriage of passenger of a taxi is not subject to VAT.
[STATEMENT 2:] Banks is subject to VAT.
Only statement 2

Which of the following is incorrect?

[STATEMENT 1:] The basis of VAT for a sale of services is the gross selling price.
[STATEMENT 2:] Those franchise holder of a radio company whose gross
receipts is P10,000,000 and below is subject to VAT.
Both statements

Which of the following is incorrect?

[STATEMENT 1:] Construction and service contractors is subject to VAT.
[STATEMENT 2:] Stock, real estate, commercial, customs and immigration
brokers is subject to VAT on sale of services.
None of the statements

Which of the following is incorrect?

[STATEMENT 1:] Lease of property shall be subject to VAT regardless of the
place where the contract of lease or licensing agreement was executed if the
property leased or used is located in the Philippines.
[STATEMENT 2:] The contract of lease was executed in America but the property
under the lease is located in Cebu City. The lease is subject to VAT.
None of the statements

Which of the following is incorrect?

[STATEMENT 1:] Warehousing services is subject to VAT. The VAT base is the
gross selling price of the contract.
[STATEMENT 2:] Restaurants are subject to VAT in sale of goods.
Both statements

Which of the following is incorrect?

[STATEMENT 1:] The operators of hotels are the one liable to pay the
corresponding VAT on certain services.
[STATEMENT 2:] The lease or the use of or the right or privilege to use copyright,
patent, design or model, plan, secret formula or process, goodwill, trademark,
trade brand or other like property or right is not included in the definition of
services.
Only statement 2

Which of the following is incorrect?

[STATEMENT 1:] Constructive receipt occurs when the money consideration or
its equivalent is placed at the control of the person who rendered the service
without restrictions by the payee.
[STATEMENT 2:] Transfer of the amounts retained by the payor to the account of
the contractor is considered as constructive receipt.
Only statement 1

Which of the following is incorrect?

[STATEMENT 1:] Cebu Pacific is subject to VAT in its carriage of passengers.
[STATEMENT 2:] The gross receipts includes VAT.
Only statement 2

Which of the following is incorrect?

[STATEMENT 1:] Ceres company is engaged in the carriage of passengers from
Kalibo to Roxas. Ceres is subject to VAT.
[STATEMENT 2:] Philippine Airlines is engaged in the carriage of passengers by
air from the Philippines to abroad. Philippine Airline is subject to VAT.
Both statements

Which of the following is incorrect?

[STATEMENT 1:] The term sale or exchange of services means the performance
of all kinds of services in the Philippines for others for a fee, remuneration or
consideration, including those performed or rendered by Lessors or distributors
of cinematographic films.
[STATEMENT 2:] The services rendered by dealers in securities is subject to
VAT.
None of the statements
EXAM I
Which of the following statement is/are correct?
STATEMENT 1: The tax base for the business tax is the gross receipts.
STATEMENT 2: The term in the course of trade or business means the regular
conduct or pursuit of a commercial or economic activity, excluding transactions
incidental thereto, by any person regardless of whether or not the person
engaged therein is a non-stock, non-profit private organization (irrespective of the
disposition of its net income and whether or not it sells exclusively to members
or their guests), or government entity.
STATEMENT 3: Transfer not in the course of trade or business is not subject to
income tax but subject to business tax.
Statement 1 only

Which of the following statement is/are correct?

STATEMENT 1: Business Taxes are imposed whenever a business is being
pursued. Without a business, business taxes can still be imposed.
STATEMENT 2: Excise taxes can be imposed together with VAT.
STATEMENT 3: Where the customs duties are determined on the basis of
Quantity or Volume of Goods, the landed cost should be used as a basis in
computing vat which includes invoice cost, freight, insurance, customs duties,
excise taxes, if any, and other illegitimate charges, prior to removal of goods
from the customs custody.
Statement 2 only

Which of the following statement is/are correct?

STATEMENT 1: The term sale or exchange of services means the performance
of all kinds of services in the Philippines and outside the country for others for a
fee, remuneration or consideration.
STATEMENT 2: Sale of raw materials or packaging materials to export-
oriented enterprise whose export sales exceed 70% of total annual production is
not subject to VAT.
STATEMENT 3: Isolated Services of a non resident alien is considered as
made in the course of trade or business and therefore subject to VAT.
Statement 3 only

Which of the following statement is/are correct?

STATEMENT 1: A transaction without consideration is not a business
transaction therefore not subject to business taxes.
STATEMENT 2: The output tax is computed by multiplying the gross selling
price by 12%, or multiplying the total amount indicated in the invoice by 12/112.
STATEMENT 3: Electricity sold by generation companies is not subject to VAT.
Statement 1 and 2 only

Which of the following statement is/are correct?

STATEMENT 1: Consignment of goods if actual sale is made within 60 days
following the date such goods were consigned is not a transaction deemed
sale.
STATEMENT 2: 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 not pay the VAT on such
importation.
STATEMENT 3: Gross selling price means the total amount of money or its
equivalent which the purchaser pays or is obligated to pay to the seller in
consideration of the sale, barter or exchange of the goods or properties excluding
VAT.
Statement 1 and 3 only

Which of the following statement is/are correct?

STATEMENT 1: A business with an annual sales of more than P3,000,000 is not
subject to vat.
STATEMENT 2: The sale should be consummated in the Philippines regardless
of the terms of payment made between the contracting parties to be subject to
VAT.
STATEMENT 3: Input tax means the Vat on or paid by a Vat- registered on
importation of goods or local purchase of goods, properties or services, including
lease or use of property in the course of his trade or business.
Statement 2 and 3 only

Which of the following statement is/are correct?

STATEMENT 1: Pawnshop is subject to VAT.
STATEMENT 2: The contract of lease was executed in America but the
property under the lease is located in Cebu City. The lease is not subject to VAT.
STATEMENT 3: Zero rated sales by a VAT person are given zero input VAT.
None of the statements

Which of the following statement is/are correct?

STATEMENT 1: Illegal expenses is excluded in the computation of Total Value
as the basis of value added tax in importation.
STATEMENT 2: Services of franchise grantees of electric utilities, telephone
and telegraph, radio and/or television broadcasting and all other franchise
grantees, except franchise grantees of radio and/or television broadcasting
whose annual gross receipts of the preceding year not exceed P10,000,000.00,
and franchise grantees of gas and water utilities is subject not to VAT.
STATEMENT 3: A unrestricted deposit in bank as a form to payment to an
account payable can be viewed as constructive receipt.
Statement 1 and 3 only
All of the statements

Which of the following statement is/are correct?

STATEMENT 1: Those franchise holder of a radio company whose gross
receipts is P10,000,000 and below is not subject to VAT.
STATEMENT 2: The lease or the use of or the right or privilege to use copyright,
patent, design or model, plan, secret formula or process, goodwill, trademark,
trade brand or other like property or right is included in the definition of services
to be subject to VAT.
STATEMENT 3: Philippine Airlines is engaged in the carriage of passengers
by air from Manila to Cebu. Philippine Airlines is subject to VAT.
All of the statements

Which of the following statement is/are correct?

STATEMENT 1: Input VAT is not recognized from effectively zero rated sale.
STATEMENT 2: Export sales by non - VAT registered person is subject to Zero
% VAT.
STATEMENT 3: The wholesaler delivers the merchandise to retailers is subject
to VAT but not to income tax.
None of the statements

Which of the following statement is/are correct?

STATEMENT 1: A non- VAT registered person can be subject to zero percent
VAT.
STATEMENT 2: The tax base for VAT on importation of goods is the total value
used by the Bureau of Customs in determining tariff and customs duties plus
customs duties, excise taxes and other charges.
STATEMENT 3: Transport of passengers and cargo by domestic air or sea
vessels from the Manila to Iloilo is subject to VAT.
Statement 2 and 3 only

Which of the following statement is/are correct?

STATEMENT 1: Transfer, use or consumption not in the course of business of
goods or properties originally intended for sale or for use in the course of
business is considered as transaction deemed sale not subject to VAT.
STATEMENT 2: Input tax means the Vat on or paid by a Vat- registered on
importation of goods or local purchase of goods, properties or services, including
lease or use of property in the course of his trade or business.
STATEMENT 3: Value Added Tax (VAT) is a tax on consumption levied on the
sale, barter, exchange or lease of goods or properties and services in the
Philippines in the course of trade or business.
Statement 2 and 3 only

Which of the following statement is/are correct?

STATEMENT 1: Pure Water, the leading distributor of distilled and purified
water, consumed some of its merchandise valued at P300,000 during the
company's team building activity. This transaction is a transaction deemed sale
subject to VAT.
STATEMENT 2: To be subject to business tax, the sale must not be related to
business or trade.
STATEMENT 3: Life insurance is not subject to VAT.
Statement 1 and 3 only

Which of the following statement is/are correct?

STATEMENT 1: The basis of VAT for a sale of services is the gross receipts.
STATEMENT 2: Ceres company is engaged in the carriage of passengers by
land from Kalibo to Roxas. Ceres is not subject to VAT.
STATEMENT 3: A zero rated VAT – registered taxpayer is not allowed to
deduct the input VAT.
Statement 1 and 2 only

Which of the following statement is/are correct?

STATEMENT 1: Common carriers by land with respect to their transport of

passengers by land shall be subject to VAT.

STATEMENT 2: A VAT- registered person will be subject to VAT for his taxable
transactions only if the gross sale/receipts exceeds P3million.

STATEMENT 3: Value Added Tax is an indirect tax. The liability to pay is

shouldered by the seller and what is shifted to the final consumer is the burden of
tax.
Statement 3 only

In value added taxation, this is not a requirement of taxability of services

a. Performed within or outside of the Philippines
b. Supply of service is not exempt from VAT
c. Consideration received actually or constructively
d. In the course of business

The following transactions are vat taxable, except

a. Sales of goods from the Philippines to foreign country
b. Sales of scrap materials by a vat registered business
c. P2,000,000 domestic sales for the year of a non-VAT business
d. Importations

Which statement is correct?

a. In the case of importation of taxable goods, the importer, whether an

individual or corporation and whether or not made in the course of his trade
or business, shall be liable to VAT.
b. All of the statements are correct.
c. None of the statement stated is correct
d. The Vat - registered individual is has an output tax of 12% on its export sale.
e. Output tax means the VAT due on the purchases, lease or exchange of
taxable goods or services by any person registered or required to register.
 f. Any person who, in the course of his trade or business, sells, barters,
exchanges or leases goods or properties, or renders services, and any
person who imports goods, shall not be liable to VAT.

The following are subject to VAT on sale of goods, except

a. Millers of Corn
b. Proprietors of restaurants
c. Some other answer
d. Domestic carrier by air and sea
e. Owners of Hotels

Which of the following statements is incorrect?

a. When a taxpayer is subject to VAT, it cannot be subject to other percentage
tax but can be subject to excise tax.
b. All of the statements are incorrect.
c. None of the statement stated is incorrect
d. A vat registered individual is not subject to VAT.
e. In the course of trade or business means the regular conduct or pursuit of a
commercial or an economic activity, including transactions incidental
thereto, by any person regardless of whether or not the person engaged
therein is a non-stock non – profit private organization or government.
f. VAT payable is the excess of output tax over input tax.

A retailer sold a bag with a gross selling price of P3,500,000. Compute for the
VAT.
420000
A sari- sari store owner has a gross sales of 1,850,000. The owner is not VAT -
registered. Compute for the VAT.

A VAT registered restaurant operator has a sale of P3,690,000, gross of VAT.

Compute for the VAT.
395357

A house broker sold a house with a invoice price of P5,780,000. Compute for the
VAT.
619286
Given the business has an Output tax of P350 and the input tax of 70. Compute
for the VAT payable.
280

Statement 1: Transport of passengers by land is not subject to 12% value added

tax.
Statement 2: Transport of goods by a domestic carrier from Philippines to abroad
is subject to value added tax.
True; True

X, a grocery store owner, sells goods to customers and consumes some of them.
Statement 1: The sale of goods to customers is subject to value added tax.
Statement 2: The consumption of goods by X is subject to value added tax.
True; True

Statement 1: Value added tax is a direct tax.

Statement 2: Value added tax is a business tax.
False; True

Statement 1: Importation of goods even for personal use is subject to value added
tax.
Statement 2: An export sale is subject to value added tax only if the term is FOB
shipping point.
True; False

X, a medical doctor, bought a residential lot form Y, a real estate dealer,

for P1,000,000 in January 2020. In June 2021, X sold the lot to Z for P2,500,000.
Statement 1: The sale of lot from Y to X is subject to value added tax.
Statement 2: The sale of lot from X to Z is not subject to value added tax.
True; True