IntroBusTax Quests

Bustin C55
Sones nugeL
MULTIPLE CHOICE.
1. Business Taxes are
a. Imposed upon !
exchange or importation.
b. Imposed upon gratuitous
and donation mortis causa.
Imposed upon gratuitous and oner
c
d. None of the above
onerous transfers such as sale, barter,

transfers such donation inter-vivog
ous transfers.
2. Under the tax code, the following are major internal revenue business
taxes, except:
a. Value added tax
b. Percentage tax
c. Excise tax
(d. Income tax
3. Which is correct?
a. Without a business pursued in the Philippines (except

importation) by the taxpayer, value added tax cannot be
imposed.
b. “In the course of trade or business” means the regular conduct

or pursuit of a commercial or an economic activity, including
me
Loves
os
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 entity.
c. Services rendered in the Philippines by a non-resident foreign

person shall be considered as being rendered in the course of
trade or business even if the performance is not regular.
d. | All of the above
Which statement is false? Transactions considered “in the course of

trade or business", and therefore subject to the business taxes
include:
a. Regular conduct or pursuit of a commercial or an economic
activity by a stock private organization.
b. Regular conduct or pursuit of a commercial or an economic
activity by a non-stock, non-profit private organization.
c. Isolated services in the Philippines by non-resident foreign
persons.
d.} Isolated sale of goods or services for a gross selling price or
receipts of P950,000.
234
Bustness Tages
The provisions of vat law shall a
. I .
are intended to be pursued on aed, to persons whose undertakings
going concern basis wher

e e the
view is to realize unrestricted amounts of pecuniary gains or cits
from those who may avail of the

V goods they sell or th i
render. Which of the following statements iG corectt © semnees iney
a. eee in the Philippines by a citizen or resident
ea s all be considered as being rendered in the course of
/ . e or business even if the performance is not regular.
(b. Services rendered in the Philippines by a non-resident foreign
ie ae be considered as being rendered in the course of
e€ or business even if the performance i
a Boland ce is not regular.
d. Neither “a” nor “b”
Statement 1: Businéss taxes are based on gross income

Statement 2: Business tax is in addition to income tax.
a. Only statement 1 is correct
b. Only statement 2 is correct
c. Both statements are correct
d. Both statements are incorrect
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
seller in consideration of the sale, barter or exchange of the goods or
properties, excluding VAT.
Statement 2: The excise tax, if any, on such goods or properties shall
form part of the gross selling price.
a. Only statement 1 is correct
b. Only statement 2 is correct
c. Both statements are correct
d. Both statements are incorrect

Which of the following statements is correct? In the case of sale,
barter or exchange of real property subject to vat
a. Gross selling price shall mean the consideration stated in the
sales document or the fair market value, whichever is higher
b. Fair market value shall mean whichever is higher of the fair
market value as determined by the BIR Commissioner or the
fair market value as shown in schedule of values of the
Provincial and City Assessors
c. Gross selling price, in the absence of zonal value or fair
market value as determined by the BIR Commissioner, shall
refer to the market value shown in the latest real property tax
declaration or the consideration, whichever Is higher.
235
Busttes, 5G
«kes
fr
d.) All of the above
. | . . t?
_ Which of the following statements is correc
9 i Vat may be imposed together with other percentage tax
ther with excise tax
I. Vat may be imposed toge >

Il. Vat and other percentage tax may be imposed together with
income tax
a. llonly c. Il and III only
b. Ill only d. |, land Ill
e added tax is an example of

c. Regressive tax
_d. Proportional tax
10. As to tax rate, valu

a. Graduated tax
b. Progressive tax
11. Which of the following statements is correct?
a. The seller of goods/services is the one statutorily liable to pay vat
b. The “burden of the tax" is borne by the final consumers 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 not the “liability to pay the tax” but the tax burden.
Both “a” and “b”
Neither “a” nor “b”
alo)
12. Which is correct?

a. All vat-exempt taxpayers shall
taxes.
b. A taxpayer who
~ will also be subject to income
c. Both “a” and “b"
d. Neither “a” nor “b”
be subject to other percentage
is subject to percentage tax on his gross receipts

tax on his net income.
“GJ supermini-cigarettes’’. In making

and transactions are passed on to the
h of the following forms part of the
13. Georgia is a manufacturer of

sales, taxes on the products
buyers. For vat purposes, whic
gross selling price?
a. Value added tax

b. Percentage tax
c. Excise tax
d. Income tax
14. Alex imported cigarettes for sale in the Philippines. What business tax
will Alex pay?

1°" Answer. He will pay VAT on importation and on the sale of the
cigarettes.
2” Answer. He will pay excise tax on importation of the cigarettes.
236
Se
Business Teves
C
Both answers are correct

Both answers are incorrect
Only the 1° answer is correct
Only the 2" answer is correct
aot
_ 15. Which is correct?

a. An excise tax which imposes a ta
C x based on weigh
capacity or any other physical unit of measurem : i ale
specific tax. ent is called
b. An excise tax which imposes a t
x ax based o i i
specified value of the article is called ad aoe aa
c A percentage tax which is imposed whether the transaction
; resulted in a gain or loss is called transaction tax
d) All of the above. /
16. A taxpayer imported cigarettes from China for sale. At a later date, he
sold the cigarettes in the Philippines. He is subject to value-added
tax. He is also subject to business tax of
a. Income tax c. Excise tax

b. Percentage tax d. None of the above
17. Who of the following is NOT subject to vat?
Vat registered person whi

es ane oot) p ose gross sales do not exceed
b. Anonresident lessor or foreign licensor who is not vat registered

Any person who is required to register under the vat system but
failed to register.
d, None of the above.
a.
c.
A non-VAT registered whose sales for the year exceeded P3,000,000
18.
is
a. Exempt from VAT
b. Subject to 0% VAT
c. Subject to percentage tax
d. Subject to 12% VAT
19. Which of the following is/are correct?

I, Persons whose transactions are exempt from value added tax
r Section 109 because their gross sales/and or receipts
unde
y for registration
do not exceed P3,00,000 may voluntarily appl
under the VAT system

ose gross sales and/or receipts
ll. A VAT-registered person wh

for two (2) consecutive years did not exceed P3,000,000 may
237
B USL OSS T,
(es
i istration and rev

apply for cancellation of VAT regis ert bac
being VAT-exempt under Section 109. K to
a. lonly . c. Both land Il fs . 5S
b. Il only d. Neither | nor Il
20. Which is incorrect? , st

a. A taxpayer whose annual gross receipts or sales
3,000,000 shall pay VAT even if not VAT registered. oxeeed Value Added Tax
b. A taxpayer whose annual receipts or sales do not exceed
P3,000,000 but who is VAT registered shall pay VAT.
c. The same transaction may be subjected to both income tax
and VAT.
d) A person whose gross sales or receipts do not exceeg

P100,000 is exempt from VAT provided he pays the 3% other
percentage tax. _
VADis a tax on the value added by even selle:

ptice or cost in the sale or lease of ce ee ee a
ordinary_course of trade or business as_well as on importation af goods
into, the Philippines, \whether for personal or business yse. As_a rule
ale) of goods or services made in the normal course of trade or business
are subject to( vai) {unlesg exempt’. Nonetheless, if the sale is \exempl
from vat, it is may_be subject to \other percentage taxes| except those
transactions \exemp} from business taxes such_as those made for
subsistence or livelihood)
VATCEXEMPD SALES (SECTION 109 NIRC, as amended under RA

10963-TRAIN Law; RR 13-2018)
The vat exempt transactions provided in the Tax Code are as follows:
"Sale or importation of agricultural and marine food\products in their

Ofigina) state, livestock and poultry of a kind generally used as, or
yielding or producing foods eAtliner conaumotiotl and breeding
stock and genetic materials therefor.
RR 16-2005 provides that products classified under this exemption

(such as meat, fruits and vegetables) shall be considered in their foriginal
slate! even if they have undergone the simple processes of preparation or
preservation for the market, such, as freezing, drying, salting, broiling,
roasting, smoking or stripping Including those those using advanced
technolagical means of packaging, such as shrink wrapping in plastics,
vacuum packing, tetra-pack, and other similar packaging methods.
238 239

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Bustin C55

onerous transfers such as sale, barter,

a. Without a business pursued in the Philippines (except

b. “In the course of trade or business” means the regular conduct

transactions incidental thereto, by any person regardless of

c. Services rendered in the Philippines by a non-resident foreign

trade or business even if the performance is not regular.

d. | All of the above

Which statement is false? Transactions considered “in the course of

The provisions of vat law shall a

going concern basis wher

from those who may avail of the

Statement 1: Businéss taxes are based on gross income

Statement 1: Gross selling price means the total amount of money or

a. Only statement 1 is correct

b. Only statement 2 is correct

c. Both statements are correct

d. Both statements are incorrect

I. Vat may be imposed toge >

e added tax is an example of

_d. Proportional tax

10. As to tax rate, valu

12. Which is correct?

be subject to other percentage

is subject to percentage tax on his gross receipts

“GJ supermini-cigarettes’’. In making

13. Georgia is a manufacturer of

a. Value added tax

will Alex pay?

2” Answer. He will pay excise tax on importation of the cigarettes.

Both answers are correct

_ 15. Which is correct?

a. Income tax c. Excise tax

17. Who of the following is NOT subject to vat?

Vat registered person whi

b. Anonresident lessor or foreign licensor who is not vat registered

d, None of the above.

A non-VAT registered whose sales for the year exceeded P3,000,000

19. Which of the following is/are correct?

r Section 109 because their gross sales/and or receipts

do not exceed P3,00,000 may voluntarily appl

under the VAT system

ll. A VAT-registered person wh

i istration and rev

20. Which is incorrect? , st

d) A person whose gross sales or receipts do not exceeg

VADis a tax on the value added by even selle:

transactions \exemp} from business taxes such_as those made for

VATCEXEMPD SALES (SECTION 109 NIRC, as amended under RA

"Sale or importation of agricultural and marine food\products in their

RR 16-2005 provides that products classified under this exemption

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