10 Questions
A person must be regularly engaged in economic activity to be subjected to any business tax under CREATE Law. True or false?
False
Non-stock and non-profit private organizations exempt from VAT if they sell exclusively to their members under CREATE Law. True or false?
False
VAT exempt inventories are included under the list of 'inventories' based on the CREATE Law.
False
A taxpayer whose annual gross receipts or sales exceed P 3,000,000 is not required to pay VAT even if not VAT registered under CREATE Law. True or false?
False
Under the CREATE Law, it is required that purchases subject to transitional input tax must be from NON-VAT suppliers only.
False
Sales and purchases of raw sugar cane are considered VAT exempt transactions under the VAT provisions discussed in the text.
True
A non-resident lessor who is not VAT-registered is subject to VAT. (True/False)
True
An individual with gross sales below P 100,000 is exempt from VAT if they pay the 3% other percentage tax. (True/False)
False
Company A, with an expected revenue of P 3,500,000 in 2018, is mandatorily liable to VAT. (True/False)
True
If a non-VAT registered person issues a VATable invoice amounting to P 20,000, they are not liable to VAT. (True/False)
False
Study Notes
TAXATION UNDER CREATE LAW
- To be subjected to business tax, a person must be regularly engaged in economic activity.
VAT EXEMPTIONS
- Non-stock and non-profit private organizations are exempt from VAT if they sell exclusively to their members.
- Sales and purchases of raw sugar cane are considered VAT exempt transactions.
VAT REGISTRATION
- A taxpayer whose annual gross receipts or sales exceed P 3,000,000 is required to register for VAT.
- Company A, with an expected revenue of P 3,500,000, is mandatorily liable to VAT.
VAT ON PURCHASES
- Purchases subject to transitional input tax can be from both VAT and non-VAT suppliers.
- A non-VAT registered person issuing a VATable invoice is liable to VAT.
PERSONAL EXEMPTIONS
- An individual with gross sales below P 100,000 is exempt from VAT if they pay the 3% other percentage tax.
NON-RESIDENT LESSORS
- A non-resident lessor who is not VAT-registered is subject to VAT.
Test your understanding of Value Added Tax (VAT) and percentage tax under CREATE Law with these 11 problems. Includes answers and solutions. Practice different scenarios to enhance your Business Management knowledge.
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