7/25/2020

and

VALUE ADDED TAX - 2019

VALUE-ADDED TAX

Is a uniform tax imposed on person, who in the

course of trade or business sells, barters,
exchanges or leases goods or properties or renders
services, and on any person who imports goods.

WHO ARE LIABLE ?

Any individual, trust, estate, partnership, corporation,

joint venture, cooperative or association who in the
course of his trade or business performs as
mentioned above.

VALUE-ADDED TAX

NATURE and CHARACTERISTICS:

VAT is a tax on consumption levied on the sale,

barter, exchange or lease of goods or properties
and services in the Philippines and on importation
of goods into the Philippines.

The seller is the one statutorily liable for the

payment of the tax, but the amount of tax may be
shifted or passed on to the buyer, transferee or
lessee of the goods, properties or services.

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VALUE-ADDED TAX
OUTPUT TAX
• VAT due on the sale of taxable goods or services
by any registered or required to register under
the NIRC.

INPUT TAX
• VAT paid by a VAT registered person in the
course of his trade or business on importation of
goods or local purchases of goods or services
from a VAT registered person.

VAT PAYABLE
• The excess of the output tax over the allowable
input tax.

BASIS OF VALUE-
ADDED TAX
TRANSACTION TAX BASE TAX RATE
Sale of Goods Gross Selling 12%
price

Sale of Services Gross Receipt 12%

Importation Total Landed 12%

Cost
Dealers in Gross Income 12%
securities
Gross Selling Price – the total amount of money or
equivalent which the purchaser pays or obligated to pay to
the seller, excluding the VAT. The excise tax, if any, on
such goods, shall form part of the gross selling price.

VALUE-ADDED TAX

TRANSACTIONS DEEMED SALE

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.

2. Distribution or transfer to (a). shareholders or

investors as share in the profits of the VAT
registered person; (b). Creditors in payment of
debt or obligation

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VALUE-ADDED TAX

TRANSACTIONS DEEMED SALE

3. Consignment of goods if actual sale is not

made within 60 days following the date of such
goods were consigned. Those returned within
the 60-day period are not deemed sold.

4. Retirement from or cessation of business with

respect to all goods on hand, whether capital
goods, stock in trade, supplies or materials as
of date of such retirement or cessation – (a).
Change of ownership of business; (b).
Dissolution of a business partnership.

VALUE-ADDED TAX

TRANSITIONAL INPUT TAX

• A person who becomes liable to VAT or any

person who elects to be a VAT registered person
shall be allowed input tax on his beginning
inventory of goods, materials and supplies,
equivalent to 2% of the value of such inventory,
or the actual VAT paid on such goods, materials
and supplies, whichever is higher, which shall be
creditable against the output tax.

VALUE-ADDED TAX

PRESUMPTIVE INPUT TAX

• VAT registered persons or firms engaged in the

processing of sardines, mackerel and milk and in
manufacturing refined sugar, cooking oil and
packed-noodle-based instant meals, shall be
allowed a presumptive input tax, creditable
against the output tax, equivalent to 4% of the
gross value in money of their purchases of
primary agricultural products which are used as
inputs to their production.

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VALUE-ADDED TAX

ZERO-RATED SALES

• A zero-rated sale by a VAT registered person,

which is a taxable transaction for VAT purposes
shall not result in any output tax.

• Any input tax attributable to zero-rated sales

may at his option, be refunded or applied for a
tax credit certificate which may be used in the
payment of internal revenue taxes subject to
limitation as may be provided by law.

VALUE-ADDED TAX

ZERO-RATED EXEMPT
TRANSACTIONS TRANSACTIONS

Subject to VAT, only that Not subject to VAT

the rate is 0%

No output tax but the

taxpayer is entitled to No tax credit or refund for
credit or refund of input input taxes are allowed
taxes

VALUE-ADDED TAX

SALES by VAT Registered

Persons subject to 0%

1. Export sales such as

a). Sale or actual shipment of goods from
Philippines to foreign country
b). Sale of raw materials or packaging 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

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VALUE-ADDED TAX

SALES by VAT Registered

Persons subject to 0%

1. Export sales such as

c). Sale of raw materials or packaging
materials to an export-oriented enterprise
whose export sales exceed 70% of total
annual production.
d). Sale of gold to the BSP.
e). Those considered as export sale under
special laws.

VALUE-ADDED TAX

SALES by VAT Registered

Persons subject to 0%

2. Foreign currency denominated sales which

means sale to nonresidents of goods (EXCEPT
AUTOMOBILES AND NON-ESSENTIAL GOODS
SUBJECT TO EXCISE TAXES) assembled or
manufactured in the Philippines for delivery to
residents in the Philippines.
3. Sales to person or entities deemed tax exempt
under special law or international agreement to
which the Philippines is a signatory.

VAT EXEMPT SALES

& TRANSACTIONS

A. Sale or importation of :
1. Agricultural and marine food products in
their original state.
2. Livestock
3. Poultry of a kind generally used as, or
yielding or producing foods for human
consumption and breeding stock and
genetic materials therefore.

NOTE: Livestock and poultry does not include fighting cocks, race
horses, zoo animals and PETS page 226

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VAT EXEMPT
TRANSACTIONS

B. Sale or importation of
1. Fertilizers.
2. Seeds, seedlings and fingerlings
3. Fish, prawn, livestock and poultry feeds
including ingredients

See page 228

VAT EXEMPT
TRANSACTIONS

C. Importation of personal and

household effects belonging to :

1. Residents of Philippines returning from

abroad
2. Non-Resident citizens coming to resettle
in the Philippines

NOTE: Provided that such goods are exempt

under the Tariff & Customs Code of the
Philippines.
See page 228

VAT EXEMPT
TRANSACTIONS

D. Importation of professional instruments and

implements, tools of trade, occupation or
employment, wearing apparel, domestic
animals and personal and household effects
beonging to persons coming to settle in the
Philippines including “balikbayans”

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VAT EXEMPT
TRANSACTIONS

E. Services subject to percentage tax under

Sections 116-127 of the Tax Code. See page 229

F. Services by
1. Agricultural contract growers
2. Milling for others of:
a) Palay into rice
b) Corn into grits
c) Sugar cane into raw sugar

VAT EXEMPT
TRANSACTIONS

G. Medical, dental, hospital and veterinary

services except those rendered by
professionals. (Laboratory services are
exempted)

NOTE: Pursuant to RR 16-2005, services of professional

practitioners are subject to VAT if annual gross professional
fees exceed P3 million, otherwise , such fees are subject to
3% percentage tax.

See page 231

VAT EXEMPT
TRANSACTIONS

H. Educational services rendered by private

educational institutions duly accredited by
DepEd, CHED, TESDA, and those rendered by
government educational institutions.

I. Services rendered by individuals pursuant to an

employer-employee relationship.

See page 233

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VAT EXEMPT
TRANSACTIONS

J. Services rendered by regional or area

headquarters established in the
Philippines by multinational corporations
which act as supervisory,
communications and coordinating
centers for their affiliates, subsidiaries
or branches and do not earn or derive
income from the Philippines.

VAT EXEMPT
TRANSACTIONS

K. Transactions which are exempt under

international agreements to which the Philippines
is a signatory.
L. Sales by agricultural cooperatives to their
members, duly registered by CDA. See page 233
M. Gross receipts from lending activities by credit or
multi-purpose cooperatives duly registered with
the CDA. See page 234

VAT EXEMPT
TRANSACTIONS

N. Sales by non-agricultural, non-electric and non-

credit cooperatives duly registered with the CDA
provided, share capital contributions of members
does not exceed P15,000. See page 234

O. Export sales
• by persons who are not VAT registered -
(VAT Exempt)
• by VAT registered (zero-rated sales)

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VAT EXEMPT
TRANSACTIONS
P. Sale of real property
• Not in the ordinary course of trade - VAT exempt
• Classified as low cost housing - VAT exempt
• Classified as socialized housing - VAT exempt

Sale of residential lot

Selling price < P1.5M per lot - VAT exempt
Selling price > P1.5M per lot - VAT
Sale of residential house & lot
Selling price < P2.5M - VAT exempt
Selling price > P2.5M - VAT

VAT EXEMPT
TRANSACTIONS

Q. Lease of Residential units with a monthly rental

per unit not exceeding P15,000. (If exceeding
P15,000 but not exceeding the P3M threshold
shall be exempt from VAT but rather subject to
3% percentage tax.
R. Sale, importation, printing or publication of books
and any newspaper, magazine review and
bulletin – printed matters in hard copy only

See page 240

VAT EXEMPT
TRANSACTIONS

S. Transport of passengers by international carriers

doing business in the Philippines. (Subject to
Common Carriers Tax (OPT) of 3%)
T. Sale, importation or lease of passenger or cargo
vessels and aircraft
U. Importation of fuel, goods and supplies by
persons engaged in international shipping or air
transport operations.

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VAT EXEMPT
TRANSACTIONS

V. Services of banks, non-bank financial

intermediaries performing quasi-banking
functions and other non-bank financial
intermediaries (subject to 3% percentage tax)
W. Sale or lease of goods and services to senior
citizens and PWDs
X. Association dues, membership fees and other
assessment and charges collected on a purely
reimbursement basis by homeowners
associations and condo corporations.

VAT EXEMPT
TRANSACTIONS
Y. Sale of gold to BSP
Z. Sale of drugs and medicines prescribed for
diabetes, high cholesterol and hypertension (2019)
AA. Sale or lease of goods or properties or the
performance of services, the gross annual
sales and/or receipts do not exceed the amount
of P3 million
BB. Self-employed individuals and professionals
availing of the 8% tax on gross sales and/or
receipts.

SOURCES OF
OUTPUT VAT
ACTUAL
1
SALES
• Cash ZERO-RATED
3 SALES
• Account
• p 250 - 256
TRANSACTIONS
2
DEEMED SALES
• p 247 - 250

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BASIS OF
THE 12% VAT
Nature of transactions Tax base

Sale of goods Gross selling price

Sale of services Gross receipts

Dealer in securities Gross income

The highest amount
Sale of real properties – SP, FMV, Zonal
value

KINDS OF SALE OF GOODS OR

PROPERTIES SUBJECT
TO 12% OUTPUT TAX
1. Actual Sale
Personal property GSP
Real property
1. Cash sale GSP vs FMV vs ZV
(whichever is
2. Deferred higher)
payment basis
3. Installment [Collection/GSP] x
plan GSP vs FMV vs ZV
w/c ever is higher

KINDS OF SALE OF GOODS OR

PROPERTIES SUBJECT TO
12% OUTPUT TAX
2. Transactions deemed sale
• Transfer, use or consumption
not in the course of business
of goods or properties
• Distribution or transfer to
FMV
shareholders/investors share
in the profits and Creditors
in payment of debt.
• Consignment of goods if
actual sale is not made
within 60 days.

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KINDS OF SALE OF GOODS OR

PROPERTIES SUBJECT TO
12% OUTPUT TAX
2. Transactions deemed sale
• Retirement from or
cessation of business AC vs FMV
whether or not the (whichever
business is continued by is lower)
the new owner or
successor.

NOTES:
• Amortization period is the shorter period of:
a) 60 months b) Useful life in months
• If P1 million threshold is not breach, no need for
amortization (INPUT TAX is 100% deductible)
• If capital goods is sold within the 5 year period
or prior to exhaustion of Input Tax thereon, the
entire unamortized input tax on the capital
goods sold can be claimed as input tax credit
during the month or quarter when sale is made
• Construction in progress is a purchase of
services. Input tax will be recognized in the
month payment was made on the progress
billing.

TRANSACTIONS
CONSIDERED DEEMED SALE

a. Transfer, use or consumption not in the

ordinary course of business of goods or
properties ordinarily intended for sale or
use in course of business.

b. Distribution or transfer to:

• Shareholders or investors as share in
the profits of a VAT registered person
• Distribution or transfer to creditors in
payment of debt or obligation
NOTE: Basis is market value)

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TRANSACTIONS
CONSIDERED DEEMED SALE

c. Consignments of goods if actual sale is not

made within 60 days after consignment.
Goods returned within the 60 day period is
not deemed sold.

d. Retirement from or cessation of status as

VAT registered person.
NOTE: Basis is acquisition cost or market value
whichever is lower)

ZERO RATED
SALES (0% VAT)

1. Export sale by a VAT registered entity

• is a taxable transaction for VAT purposes
but shall not result in any output tax
• the input tax related to zero-rates sale
shall be available as tax credit or refund
2. Export sale by a non- VAT
registered entity
• it is a VAT exempt transaction thus, seller is
not allowed any tax credit of VAT (input
tax on purchases related to this
transaction

• Importation of goods

• Domestic purchase of
goods and services
SOURCES OF • Acquisition of capital
INPUT VAT goods

• Presumptive Input VAT

• Transitional Input VAT

• Standard Input VAT

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IMPORTATION OF GOODS

 VAT on importation is imposed whether

the importation is personal or business
use and shall be borne by the importer.
 In cases where the goods imported into
the Philippines is made by a VAT-exempt
person, entities or agencies which are
subsquently sold, transferred or
exchanged in the Philippines to non-
exempt persons or entities, the latter shall
be considered the importers thereof and
shall be liable for the VAT due on such
importation.
Page 260 - 264

VAT ON IMPORTATION

1. In general, based on the total value used

by the Bureau of Customs (BOC) in
determining the tariff and customs duties
plus customs duties, excise taxes if any,
and other legitimate charges prior to
removal of goods from the customs
custody such as:
• Insurance, freight, postage
• Interest, commission
• Bank charges, brokerage
• Wharfage, arrastre, stamps
• Processing fee

FORMULA: VAT ON
IMPORTATION

1. Customs duties is “ad valorem”

Dutiable value Pxxx

Customs duties xxx
Excise tax xxx
Other charges w/in BOC xxx
Tax Base xxx
Tax rate 12%
VAT on Importation Pxxx

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VAT ON IMPORTATION

2. 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 the VAT which includes,
Invoice cost, freight, insurance, customes
duties, excise taxes, if any, and other
legitimate charges rpior to removal of
goods from the customs custody such as :
• Postage, interest, commission
• Bank charges, brokerage
• Wharfage, arrastre, stamps
• Processing fee

FORMULA: VAT ON
IMPORTATION
2. Customs duties is “specific ”
Invoice amount Pxxx
Customs duties xxx
Freight xxx
Insurance xxx
Other charges w/in BOC xxx
Landed cost xxx
Excise tax xxx
Total xxx
Tax rate 12%
VAT on Importation Pxxx

LOCAL PURCHASES
Goods or services such as purchase or
acquisition of:
• goods for sale
• goods for conversion into finish products
• goods for use as supplies
• goods for use as materials supplied in the
sale of service
• goods for use in trade or business for
which depreciation or amortization is
allowed
• Real properties where VAT has been paid
• Services for which VAT has been paid

Page 256

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INPUT TAX ON LOCAL PURCHASES OR

IMPORTATION OF CAPITAL GOODS

1. Capital goods
• Refer to depreciable properties in which
the useful life is more than one year.
• Purchases or importation of capital
goods, the aggregate acquisition cost of
which (net of VAT) in a calendar month
exceeds P1 million, regardless of the
acquisition cost of each capital good,
shall be amortized.
Input Tax
Amount deductible =
Amortization period
See sample computation (Case A & B) on pages 257- 260

PRESUMPTIVE
INPUT TAX OF 4%

 Persons or firms engaged in

processing and manufacturing of the
following shall be allowed a presumptive
input tax is taxed at 4% as follows:

Processing of Manufacturing of
• Sardines • Refined sugar
• Mackerel • Cooking oil
• Milk • Packed noodle

Page 265- 266

TRANSITIONAL
INPUT TAX

Persons covered :
• Taxpayers who became VAT registered
person (previously non-VAT) shall be
entitled to a Transitional Input Tax
Amount deductible:
Beginning Inventory Pxxx
Tax rate 2%
Amount xxx
Actual Input VAT, Inventory beg Pxxx
Transitional Input Tax (higher) Pxxx

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STANDARD INPUT VAT

 On sales made to government, its

political subdivisions and instrumentalities
including GOCCs shall before making
payments on its purchases taxed at 12%
VAT, deduct and withhold a Final VAT due at
the rate of 5% of the gross payment. The
5% withholding VAT shall be remitted within
10 days from the close of the month the
withholding was made.

See sample illustration on page 269

FOR AGRICULTURAL
COOPERATIVES

S A L E T A X
Sale of cooperative’s own produce Exempt
to its members
Sale of cooperative’s own produce Exempt
to non-members
Sale to its members of goods Exempt
other than its own produced
Sale to non-members of goods Subject to
other than its own produced VAT

GROSS RECEIPTS FROM LENDING

ACTIVITIES OF CREDIT OR
MULTI-PURPOSE COOPERATIVES

S A L E T A X
Gross receipts from lending Exempt
activities to its members
Gross receipts from lending Exempt
activities to non-members

Gross receipts from non-lending Subject to

activities to its members and non- VAT
members

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FOR NON-AGRICULTURAL, NON-

ELECTRIC & NON-CREDIT
COOPERATIVES

CONTRIBUTION T A X
Contribution per member Exempt
< P15,000

Contribution per member Subject to

> P15,000 VAT

EXPORT SALES BY VAT & NON-

VAT REGISTERED PERSONS

VAT Registered Exporter Non-VAT Registered Exporter

Excess Input VAT may be: Output VAT . . . None

Input VAT * . . . NA
• Refunded VAT payable . . . None
• Used as tax credit
against output VAT for * Input VAT may be
local sales closed to expense or
• Payment of any internal cost.
revenue taxes

LEASE OF
RESIDENTIAL UNITS

L E A S E T A X
Monthly rental < P15,000,
regardless of the amount of Exempt
aggregated rentals received
during the year

Monthly rental > P15,000, but the Exempt,

aggregate rentals received during subject to
the year do not exceed P3 million 3% OPT

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MANDATORY VAT
REGISTRATION

1. If the aggregate amount of actual gross

sales or receipts exceed P3 million for the
past 12 months
2. There are reasons to believe that the gross
sales or receipts for the next 12 months
will exceed P 3 million
3. Radio and/or TV broadcasting companies
whose annual gross receipts of the
preceding year exceeds P 10 million.
4. A person required to register as VAT
taxpayer

OPTIONAL
REGISTRATION

1. Any person who elects to register as VAT

registered shall not be allowed to cancel his
registration for the next 3 years.
2. Franchise grantees or radio and/or TV
broadcasting whose annual gross receipts
of preceding year do not exceed P10 million
3. Application is submitted not later than 10
days before the beginning of the calendar
quarter.

CANCELATION OF VAT
REGISTRATION

1. Written application to the Commissioner

stating his gross sales or receipts for the
following 12 months will not exceed P3 M.
2. Has ceased to carry on his trade or
business.
3. The Commissioner of the Internal Revenue
orders suspension or closure of business
establishment for cause.

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CREDITABLE
WITHHOLDING TAX

• NON-RESIDENT PERSONS who perform

services in the Philippines are deemed
to be making sales in the course of
trade or business, even if the
performance of services is not regular.
• The recipient of the service is the one
required to withhold and remit the VAT
to the BIR. Such VAT can be claimed by
the recipient as input tax.

FINAL WITHHOLDING TAX

1. A final withholding tax of 5% of the gross

payment on account of each purchases of
goods or services taxed at 12% VAT
2. The 5% final VAT shall represent the net
VAT payable to the seller. The remaining
7% effectively accounts for the standard
input VAT of the seller, in lieu of the actual
input VAT.
3. The difference between actual input VAT
and standard input VAT must be closed to
expense or cost.

MIXED BUSINESS
TRANSACTIONS

VAT registered person who engaged in

transactions not subject to VAT shall be
allowed of Input Tax Credit as follows:
1. Total input tax which can be directly
attributed to transactions subject to VAT
(except transactions to the government or
GOCCs)
2. Ratable portion of any input tax which can
not be directly attributed to either activity
(allocation shall be on the basis of sales
volume)

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EXCESS INPUT TAX

Kinds of Input Tax Treatment

Sales subject to 12% VAT Carry-over

a). Carry-over
Sales subject to 0% VAT b). Refund
c). Tax credit
certificate

a). Tax credit

Cancellation of VAT
certificate
registration
b). Refund, if no other
tax liability

VAT EXEMPT SALES

TO SENIOR CITIZENS

DISCOUNT (Total billing – VAT) x 20%

Amount Due
Total bill inclusive of VAT xxx
Less: VAT xxx
Total bill exclusive of VAT xxx
Less: 20% discount ** xxx
Total amount due Pxxx

Total billing amount

**DISCOUNT VAT x 20%
No. of customers

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1. Which of the following is not an activity

subject to VAT ?
a) sale in retail of goods by a dealer
b) sale of bamboo poles by a dealer
c) sub-lease of real proeprty in the
C course of the business
A d) importation of ordinary feed for
S poultry chicken
E
2. Which transaction is not exempt from VAT?
a) sale of 1 sack of rice
1 b) sale of lechon manok
c) sale of pet food
d) sale of newspaper

3. Which of the following shall be exempt from

VAT ?
a) services of banks
b) services of money changers &
pawnshops
C c) services of credit cooperatives
A d) all of the above
S 4. Which of the following is exempt from VAT?
E a) common carriers – passengers by air
within the Phils
b) common carriers – passengers by sea
1 within the Phils
c) common carriers – passengers by land
within the Phils
d) common carriers – cargoes by air within
the Phils

5. Mr. Santiago purchase a condominium unit

from his friend Mr. Molina (condo unit
owner) in 2017 for P 3 M and a parking lot
from subdivision developer for P800,000.
What is the correct amount of VAT ?
C a) P456,000 c) P 96,000
A b) P360,000 d) P zero
S
E 6. Prior to 2018, a subdivision developer sold
5 residential units to 5 different vendees for
P3M per lot. These sales shall be classified:
1 a) 12% VAT transactions
b) 0% VAT transactions
c) VAT exempt transaction
d) None of the following

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7. In 2018, a subdivision developer sold 5

residential units to 5 different vendees for
P3M per lot. These sales shall be classified:
a) 12% VAT transactions
b) 0% VAT transactions
C c) VAT exempt transaction
A d) None of the following
S
E

8. Prior to 2018, a real estate dealer sold two

(2) adjacent residential lots in the city for
P 800,000 each. The vendee intends to
erect his residential house thereon.
C The sale shall be classified as a:
A a) 12% VAT transactions
S b) 0% VAT transactions
E c) VAT exempt transaction
d) None of the foregoing

1 9. If the same transaction happened 0n 2018,

the sale shall be classified as:
a) 12% VAT transactions
b) 0% VAT transactions
c) VAT exempt transaction
d) None of the foregoing

C
The following are the data of Negros
A
S
International for the 4th quarter of 2018:
E Sales up to Dec 15 (Inv value)... P 380,800
Purchases up to Dec 15 (net) ... 150,000
A
N Additional information:
A On Dec 16, 2016, the Company retired from
L its business an inventory valued at P190,000
Y that remained unsold. There is a deferred
S input tax from the 3rd quarter of P3,500.
I
S
How much is the total value-added taxes
2 payable of Negros International ?

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C Makasasa, a VAT registered lessor of

A
commercial spaces received P1,337,500
S
rentals during the year from various
E
clients, net of the 5% Creditable
A Withholding Tax on rental income.
N
A
L How much is the correct output VAT?
Y
S
I
S

KILILI POWER Corp, imported a good from Japan.

C Invoice value of the good was $7,000 (forex $1=P50).
A Customs officials valued the imported article for
S P500,000. Additional importation costs incurred were:
E Insurance . . . 15,000
Freight from Japan . . . 10,000
A Postage ... 5,000
N Wharfage ... 7,000
A Arrastre ... 8,000
L Brokerage . . . 25,000
Y Facilitation fee ... 3,000
S Customs duty . . . 50,000
I Excise tax . . . 30,000
S The company spent P50,000 as trucking fee from
customs warehouse to its QC warehouse. The carrier
is a VAT registered entity
4
How much is the VAT on importation ?

KILILI POWER Corp, imported a good from Japan.

Invoice value of the good was $7,000 (forex $1=P50).
C
Customs officials valued the imported article for
A
P500,000. Additional importation costs were:
S
Insurance . . . 15,000
E
Freight from Japan . . . 10,000
Postage ... 5,000
A
Wharfage ... 7,000
N
Arrastre ... 8,000
A
Brokerage . . . 25,000
L
Facilitation fee ... 3,000
Y
Customs duty . . . 50,000
S
Excise tax . . . 30,000
I
The company spent P50,000 as trucking fee from
S
customs warehouse to its QC warehouse. The carrier
is a VAT registered entity
5
The VAT payable if the item was sold for
P800,000 (exclusive of VAT)

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KILILI POWER Corp, imported a good from Japan.

Invoice value of the good was $7,000 (forex $1=P50).
C Customs officials valued the imported article for
A P500,000. Additional importation costs were:
S Insurance . . . 15,000
E Freight from Japan . . . 10,000
Postage ... 5,000
A Wharfage ... 7,000
N Arrastre ... 8,000
A Brokerage . . . 25,000
L Facilitation fee ... 3,000
Y Customs duty . . . 50,000
S Excise tax . . . 30,000
I The company spent P50,000 as trucking fee from
S customs warehouse to its QC warehouse. The carrier
is a VAT registered entity
6
Assuming the BOC did not provide the valuation for
the imported article, VAT on importation is

A person subject to VAT for the first time

can have an input tax out of the
inventory of goods, material and supplies
C on hand at the time he become liable.
A This is called
S
a) Value – added tax deemed paid
E
b) Transitional input tax
c) Presumptive input tax
6 d) None of the above

LAWLAO, a 2018 VAT registered taxpayer shows

C his record during the month as follows:
A Value of inventory Dec 31, 2017
S
purchased from VAT registered firm... P112,000
E
VAT paid on inventory, Dec 31, 2017... 12,000
A Value of Inventory Dec 31, 2017
N purchased from non-VAT firm ... 518,000
A Sales, net of VAT ... 281,000
L Purchases during the month, net ... 70,000
Y Purchases during the month
S of VAT exempt goods ... 50,000
I
S
What is the amount of VAT payable ?
7

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VALENCIA Corp, producer of cooking oil from coconut and

corn. The corporation previously is VAT exempt but starting
C January 1, 2018 became subject to VAT. The 2018 sales
A amounted to P750,000 VAT not included. The following data
S was provided:
Purchases during the month:
E
Purchases from coconut & corn farmers 200,000
Purchases from VAT suppliers
A Supplies 15,000
N Packaging materials 52,000
A Inventory, January 1, 2018 Cost
L Corn & coconut bought from farmers 300,000
Y Packaging materials from VAT suppliers 27,500
S Supplies bought from VAT suppliers 15,000
I
S 1. How much is the transitional input tax ?
2. How much is the presumptive input tax
8 3. How much is the creditable input taxes ?
4. How much is the VAT payable for the month ?

C ASAKUSA Company, a VAT registered business had

A the following data during the quarter:
S Export sales 1,815,000
E Domestic sales , gross 1,232,000
Purchases of goods for export, gross 672,000
A
N
Purchases of goods for domestic
A sales, gross 323,120
L Purchases of supplies on domestic
Y sales, exclusive of tax 124,850
S
I Assuming that the input taxes paid on purchases of
S goods for export are claimed as tax credit, the VAT
payable by ASAKUSA Company is
9

RAY UMA suffered physical injuries requiring

hospitalization. The following charges were
C
A
incurred:
S Hospital bills inclusive of doctor’s
E fees and medicines 500,000
Laboratory expenses exclusive
A of medicines 250,000
N Medicines purchased from the
A hospital’s pharmacy 80,000
L Medicines purchased from
Y other pharmacies 80,000
S
Doctor’s fees 80,000
I
S

10 What is the amount of VAT from the foregoing

expenditures of RAY UMA ?

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C KURUBOT, a 65 years old, took an air-conditioned

A bus in Legaspi City with a normal fare of P1,200
S
from Legaspi City to Manila.
E

A
N 1. How much should KURUBOT pay the bus
A conductor ?
L
Y
2. Assuming KURUBOT instead of taking the
S
I
bus decided to take Cebu Pacific in going to
S Manila. The fare, inclusive of taxes and
gross of discount, was P3,500, how much
11 fare should be paid by KURUBOT ?

Assume the following transactions with the

corresponding invoice costs/prices:
C
A
RUBEN, non-VAT taxpayer, sells to
S HUGO, VAT taxpayer 100,000
E HUGO, VAT taxpayer, sells to
MIGZ, VAT taxpayer 135,500
A MIGZ, VAT taxpayer, sells to
N ABU, VAT registered exporter 200,500
A ABU, Non VAT taxpayer, exported
L the goods in Hongkong 350,000
Y
S
I 1. How much is the VAT payable of RUBEN ?
S 2. How much is the VAT payable of HUGO ?
12 3. How much is the VAT payable of MIGZ ?
4. How much is the VAT payable of ABU ?

CONAN is a VAT registered taxpayer. It had the

following data for the month of January:
C Cash sales, Invoice amount 660,800
A Sales on account 246,400
S Purchases 291,200
E Consignment shipments (inclusive
of tax) – less than 60 days 38,500
A
N
- more than 60 days 22,400
A Goods paid to creditors
L (dacion en pago) 16,800
Y Goods given as Christmas gift
S to employees 19,040
I Property dividend to stockholders 8,960
S

13 How much is the VAT payable for the month ?

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