1.

First statement Association dues, membership fees, D) Neither I nor II is correct

and other assessments/charges collected on a purely 5. Which of the following local sales of goods or
reimbursement basis by homeowners' association property and services will not be effectively subject
and condominium corporation established under to VAT at zero-rate?
Republic Act No. 9904 (Magna Carta for A) Sales to enterprises duly registered and
Homeowners and Homeowners' Association and accredited with the Subic Bay Metropolitan
Republic Act No. 4726 (The Condominium Act) are Authority (SBMA)
subject to VAT since they constitute income payment B) Sales to enterprises duly registered and
or compensation for the beneficial services it accredited with the Philippine Economic Zone
provides to homeowner-members. Second Authority (PEZA)
statement: A non-stock, non-profit organization or C) Sales to Development Bank of the Philippines
government entity is liable to pay VAT on the sale of (DBP)
goods or Services. D) Sales to International Rice Research Institute
A) Both statements are correct. (IRRI)
B) Both statements are incorrect. 6. In what case shall the Commissioner of the Internal
C) Only the first statement is correct. Revenue determine the appropriate tax base?
D) Only the second statement is correct. A) In cases where a transaction is deemed a sale,
2. Which of the following sales of residential property barter or exchange of goods or properties.
where the instrument of sale (whether the B) Where the gross selling price is unreasonably
instrument is nominated as a deed of absolute sale, lower than the actual market value (lower by
deed of conditional sale or otherwise) is executed on more than 30% of the actual market value)
or after January 1, 2018, shall not be subject to VAT? C) Both a and b
A) Sale of residential lot the value of which does D) Neither a nor b
not exceed P 1,500,000.00 7. Which of the following is not deductible from “Gross
B) Sale of residential house and lot or other Selling Price”?
residential dwellings the value of which exceed A) Discounts determined and granted at the time
P2,500,000 of sale, which are expressly indicated in the
C) Sale of parking lot which may or may not be invoice, the amount thereof forming part of the
included in the sale of condominium units gross sales duly recorded in the books of
regardless of amount of selling price accounts.
D) All of the choices B) Discounts determined and granted after the
3. Which of the following is not included in the term agreed sales quota is met by the buyer.
"gross selling price"? A) Sales discounts indicated in the invoice at the
Total amount of money or its equivalent paid by time of sale, the grant of which is not
the purchaser dependent upon the happening of a future
Delivery, freight and insurance paid by the event, deductible within the same month or
purchaser quarter it was given.
Value-added tax passed on by the seller to the B) Sales returns and allowances for which a proper
buyer credit or refund was made during the month or
Excise tax quarter to the buyer for sales previously
4. The sale of raw materials or packaging materials to a recorded as taxable sales.
non-resident buyer for delivery to a resident local 8. Who of the following shall be considered an importer
export-oriented enterprise to be used in for Value-Added Tax purposes?
manufacturing, processing, packing or repacking in I. Any person who brings goods into the Philippines,
the Philippines of the said buyer's goods is an export whether or not made in the course of in trade or
sale if: business
I. paid for in acceptable foreign currency. II. Non-exempt persons or entities who acquire tax-
II. accounted for in accordance with the rules and free imported goods from exempt persona,
regulations of the Bangko Sentral ng Pilipinas entities or agencies.
(BSP). A) Both I and II
A) Only I is correct B) Neither I nor II
B) Only II is correct C) I only
C) Both I and II are correct D) Il only
9. Bigay Gabay, Inc. enjoys tax exemption for its C) Total amount received as enrollment fee from their
importations. During a particular month, it imported members plus other charges received.
goods from Japan. After the release from Customs 15. Which of the following zero-rated services
custody, Bigay Gabay, Inc, transferred the imported performed in the Philippines require that they paid
goods to Todo Bigay Trading, a VAT-registered entity. for in acceptable foreign currency and accounted for
For VAT purposes, the VAT on importation shall be in accordance with the rules and regulations of the
paid by: Bangko Sentral ng Pilipinas (BSP)?
A) Both Bigay Gabay, Inc, and Todo Bigay Trading Processing, manufacturing, or repacking goods for
B) Neither Bigay Gabay, Inc, nor Todo Bigay Trading other persons doing business outside the Philippines,
C) Bigay Gabay only. which goods are subsequently exported
D) Todo Bigay only. I. Services, other than processing, manufacturing, or
10. Which of the following shall be subject to Value- repacking rendered to a person engaged in business
Added Tax on sale or exchange of services? conducted outside the Philippines or to a non-
a. Construction and service contractors resident person not engaged in business who is
b. Stock, real estate, commercial, customs and outside the Philippines when the services are
immigration brokers performed
c. Lessors of property, whether personal or real A) Both I and II
d. All of the choices A) Neither I nor II
11. The phrase "sale or exchange of services shall B) I only
likewise include which of the following? C) II only
a. The lease or the use of or the right or privilege to 16. Which of the following goods when sold or imported
use any copyright, patent, design, or model plan, shall not be exempt from VAT?
secret formula or process, goodwill, trademark, trade A) Agricultural and marine foods products in their
brand or other like property or right original state.
b. The lease or the use of, or the right to use any B) Livestock and poultry of a kind generally used as, or
industrial, commercial or scientific equipment yielding or producing foods for human consumption.
c. The supply of scientific, technical, industrial or C) Breeding stock and genetic materials therefore.
commercial knowledge or information D) Processed or manufactured agricultural and marine
d. All of the choices food products.
12. Which of the following shall be subject to 0% Value 17. Meat, fruit, fish, vegetables and other agricultural
Added Tax? and marine food products shall be considered in
A) Sale of electricity by generation companies their original state even if they have undergone the
A) Sale of electricity by transmission companies simple processes of preparation or preservation for
B) Sale of electricity by distribution companies the market. Which of the following shall not be
C) Sale of power or fuel generated through renewable considered as simple processes of preparation or
sources of energy preservation for the market?
13. It means a merchant of stocks or securities, whether A) Freezing
an individual partnership or corporation, with an B) Drying
established place of business regularly engaged in C) Roasting
the purchase of securities and their resale to D) Canning
customers, that is, one who as a merchant buys 18. Importation of professional instruments and
securities and 5 them to customers with a view to implements, wearing apparel, domestic animals, and
the gains and profits that may derived therefrom. personal household effects shall be exempt from VAT
A) Dealers in securities if:
Lending investors I - belonging to persons coming to settle in the
Stock brokers Philippines or Filipinos or their families and
Common carriers descendants who are now residents or citizens of
14. The VAT on non-life insurance is based on: other countries, such parties hereinafter referred to
A) Total premiums collected, whether paid in money, as overseas Filipinos,
notes, credits or any substitute for money. II - in quantities and of the class suitable to the
A) Total premiums collected in money. profession, rank or position of the persons importing
B) Premiums or payments received from the plan said items for their own use and not for sale, barter
holders. or exchange.
 III - accompanying such persons, or arriving within a D) II only
reasonable time, 22. Which of the following sales to senior citizens shall
IV - upon the production of evidence satisfactory to not be exempt from VAT?
the Commissioner of Internal Revenue, that such
persons are actually coming to settle in the A) Sale of food, drinks, dessert and other
Philippines and that the change of residence is bona consumable items served by the establishments,
fide. including value-meals and promotional meals,
A) I, II, III and IV are correct offered for consumption of the general public
B) None of I, II, III and IV is correct B) Sale of single serving seat meals with beverage for
C) Only II and III are correct an individual senior citizen
D) Only I and II are correct C) Bulk orders which are within the context of pre-
19. Which of the following transactions by certain contracted or pre-arranged group meals or packages
cooperatives duly registered and in good standing D) Sale of medicines from drug stores, hospital
with the Cooperative Development Authority (CDA) pharmacies, pre-contracted or medical and optical
shall not be exempt from VAT? clinics and similar establishment including non-
A) Gross receipts from lending activities by credit or traditional outlets dispensing medicine
multi purpose cooperatives 23. Sale of drugs and medicines prescribed for diabetes,
B) Sales by non-agricultural, non-electric and non- high cholesterol, and hypertension to beginning:
credit cooperatives A) January 1, 2019 as determined by the Department
C) Importation by non-agricultural, non-electric and of Health.
non-credit cooperatives of machineries and B) January 1, 2020 as determined by the Department
equipment, including parts thereof, to be used by of Health.
them C) January 1, 2021 as determined by the Department
D) None of the choices of Health.
20. The sale of parking lot by a VAT-registered real estate D) January 1, 2022 as determined by the Department
dealer: of Health.
A) shall be subject to VAT regardless of the amount 24. Which of the following shall be allowed optional VAT
of selling price. registration?
B) shall be subject to VAT provided the amount of A) Any person who is VAT-exempt because the
selling price exceeds the threshold amount. annual sales
C) shall be subject to VAT only when it is included as B) Any person who is VAT-registered but enters into
part of the sale of condominium unit. transactions which are exempt from VAT (mixed
D) shall be subject to VAT only when it is sold transactions), with respect receipts do not exceed
separately from the sale of condominium unit. the threshold amount [Sec. 109 (BB) to his
21. A lessor rents his 5 commercial and 10 residential transactions which would have been exempt under
units for monthly rent of P60,000 and P15,000 per Sec 109 (1) of the Tax Code
unit, respectively. His accumulated gross receipts C) Franchise grantees of radio and/or television
during the taxable year amounted to: broadcasting whose annual gross receipts of the
Rent from 5 commercial units (60,000 per unit) preceding year do exceed P10,000,000
P3,600,000 D) All of the choices
Rent from 10 residential units (15,000 per unit) 25. The taxpayers who are qualified to optionally register
1,800,000 may apply for VAT registration not later than how
Accumulated gross receipts many days before the beginning of the calendar
P5,400,000 quarter?
What will be the business taxes consequences? A) 30 days
I - Rent from commercial units shall be subject to B) 25 days
Value-Added C) 15 days
II - Rent from residential units shall not be subject to D) 10 days
3% Percentage under Section 116 of the Tax Code
and exempt from VAT
A) Both I and II
B) Neither I nor II
C) I only