Long Quiz PDF

LONG QUIZ FLQ1 42 1 A tax on business is a. direct tax b. indirect tax c. property tax d. none of the above 2 Value-added tax is a (an) a. indirect tax b. direct tax c. progressive tax d. regressive tax 3 Which of the following is not subject to business tax? a. b. c. d. Sale of goods, services and...

LONG QUIZ FLQ1 42 1 A tax on business is a. direct tax b. indirect tax c. property tax d. none of the above 2 Value-added tax is a (an) a. indirect tax b. direct tax c. progressive tax d. regressive tax 3 Which of the following is not subject to business tax? a. b. c. d. Sale of goods, services and lease of property in the ordinary course of trade or business Importation of goods into the Philippines, whether for personal or business use Gratuitous transfer All of the above Onerous transfer (sale/barter/exchange) = business taxes and income tax Gratuitous transfer (donations) = donor's tax or estate tax 4 The term "in the course of trade or business" does not include a. Regular conduct or pursuit of a commercial or economic activity. b. Incidental business transactions. c. Transactions 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 government entity. d. None of the above Under the VAT law, incidental transactions (i.e., sale of asset used in business) is subject to value added tax 5 Which is incorrect? a. A taxpayer whose annual gross receipts or sales exceeds P3 000,000 shall pay VAT even if not VAT b. A taxpayer whose annual receipts or sales do not exceed P3,000,000 but who is VAT-registered shall pay VAT. c. A non-resident lessor or foreign licensor who is not VAT-registered is subject to VAT. d. None of the above 6 Which of the following is not correct about percentage tax? a. It is a business tax. b. It is a transfer tax. c. It is an ad valorem tax. d. It is not a progressive tax. Transfer tax is applicable to gratuitous transfers (donation or inheritance) while percentage tax and vat are applicable to onerous taxes. 7 Which of the following taxes is not replaced by VAT? a. b. c. d. common carrier's tax sales tax on original sales contractor's tax compensating tax 8 A creditable input tax allowed on one who becomes subject to VAT for the first time a. Presumptive input tax b. Transitional input tax c. Excess input tax d. Total input tax 9 Which importation is subjed to VAT? a. Importation of fuels by a person engaged in international shipping worth P20 Million if the fuel shall be used exciusively for international shipping and air transport operatons. b. Importation of raw, unprocessed, refrigerated Kobe beef from Japan by a beef dealer for sale to hotels in Makati City with a fair market value of P10 Million. c. Importation of wines by a wine dealer with a fair market value of P2 million for sale to hotels in Makati City. d. Importation of books worth P5 million and school supplies worth P1.2 million. 10 Upon satisfaction of certain conditions, the following are subject to 12% VAT (instead of 0%) except a. The sale of raw materials or packaging materials 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 of the said buyer's goods, paid for in acceptable foreign currency, and accounted for in accordance with the rules and regulations of the BSP; b. The sale of raw ,materials or packaging materials to an export-oriented enterprise whose export sales exceed seventy percent (70%) ot total annual production. c. Transactions considered export sales under Executive Order No. 226, otherwise known as the Omnibus investments Code ot 1987, and other special laws. d. The sale of goods, supplies, equipment and fuel to persons engaged tn international shipping or International air transport operations and that the goods, supplies, equipment, and fuel shall be used exclusively for international shipping or air transport operations. 11 Which is false in the filing of VAT return and payment of tax? a. Monthly VAT declaration: Not later than 20th day following the end of each month. b. Quarterly VAT return: Not later than 25tl day following the close of the taxable quarter. c. Beginning January 1, 2023, the filing and payment shall be done within 25 days following the close of each taxable quarter. d. Before January 1, 2023, the filing of the monthly VAT declaration shall be done within 20 days following the close of each month. 12 Which of the following is subject to percentage tax under Section 116 of the Tax Code? a. b. c. d. Fruit dealer whoso gross receipts for the year amounted to P2,800,000 only An individual taxpayer whose gross sales for the year amounted to P 100,000 School bus operator whose gross receipts tot the year amounted to P2,500,000 None of the above Section 116 shall apply if 1. The transaction is vat exempt and the reason for vat exemption is simply because the taxpayer’s gross sales or receipts did not exceed the vat threshold of P 3M and 2. The taxpayer is not vat registered If the reason for vat exemption is not because of #s 1 and 2 above, the transaction is not subject to Section 116 The taxpayer in Item “B” is known as Marginal Income Earner (MIE), an individual whose gross sales or receipts during the year is not more than P 100,000 MIE is not subject to business tax (Vat and OPT) 13 Zero-rated (0%) transaction a. Sale of gold to Bangko Sentral ng Pilipinas b. Foreign-currency denominated sales c. Services rendered to persons or entities whose exemption under special laws or international agreements to which the Philippines is a signatory effectively subjects the supply of such services tc zero percent (0%) rate, d. Services rendered to registered enterprises within the tourism enterprise as declared by the TIEZA 14 Which of the following documents can be validly used in claiming input tax credit? a. b. c. d. Delivery receipt Acknowledgment receipt Official receipt Sales invoice issued by non-VAT seller 15 G.l. Joe, an alien employee of the Asian Development Bank (ADB) who is retiring soon has offered to sell his car to you, which he imported tax-free for personal use. The privilege of exemption from tax is granted to qualified persons under the ADB Charter which is recognized by the tax authorities. If Pedro decides to purchase the car, the tax consequence shall be: a. b. c. d. Exempt from VAT G.l. Joe is subject to VAT Pedro is subject to VAT Either G.I. Joe or Pedro is subject to VAT, at the option of G.l. Joe 16 Which of the following statements is incorrect? a. VAT on importation is paid to the Bureau of Customs before the imported goods are released from its custody. b. When a person who enjoys tax-exemption on his importation subsequently sells in the Philippines such imported articles to non-exempts person, the purchaser-nonexempt person shall pay the VAT on such importation. c. Expenses incurred after the goods are released from Customs custody are disregarded in computing VAT on importation. d. Imported goods which are subject to excise tax are no longer subject to value-added. 1 T The gross receipts from rentals not exceeding P15,000 per month per unit shall be exempt from VAT regardless of the aggregate annual gross receipts. 2 F The gross receipts from rentals exceeding P15,000 per month per unit shall be subject to VAT if the annual gross receipts from said units including the gross receipts from units leased out for not more than P15,000 exceed P3,000,000.00 3 T Inventories of goods for sale which are exempt from added tax may be subject to transitional input tax when the seller becomes liable to VAT for the first time, or when he voluntarily registers under the VAT system even if his annual turn-over does not exceed P3,000,000.00 4 T When a transitional Input tax is created, the taxable person shall make a journal entry debiting "Transitional input tax” and crediting “Merchandise Inventory” 5 F 6 F The purchase of fish to be processed into sardines shall entitle the manufacturer of sardines to a 4% presumptive input tax. A person who sells his Riceland because he needs money for the hospitalization of his child is subject to VAT on the sale of real property. 7 T Other percentage taxes are indirect taxes that can be passed on by person required to pay to another person who shall bear the burden of paying the tax. 8 T Transactions that are subject to the other percentage taxes are no longer subject to the value-added tax but may be subject to excise tax. 9 F Sale of goods or services which are subject to Other Percentage Tax are subject also to value-added tax. 10 T Persons or transactions which are subject to Other Percentage Tax may still be subject to Income tax 11 F A person whose gross annual sales or receipts exceed P3,000,000 may, nevertheless, be subject to Other Percentage Tax 12 F A domestic carrier of passengers by land shall be subject to value-added tax if the gross annual sales or receipts exceed P3,000,000.00 13 14 F T All VAT-exempt taxpayers shall be subject to other percentage taxes. A taxpayer who is subject percentage tax on his gross receipt will also be subject to income tax on his net income. 15 16 F F Lease of a parking lot attached to a residential unit at P8,000 per month is exempt from VAT. Lease of eight (8) residential units at P 18,500 per unit per month is subject to VAT. The following are the data of spouses Fidel and Aileen during the year: Gross Receipts From business: Restaurant Small Department Store Practice of Profession as a CPA Fidel Aileen 1,350,000.00 1,220,000.00 254,300.00 Which of the following statements is correct? a. For purposes of the threshold of P3,000,000 the gross receipts of Fidel and Aileen shall be combined. b. Aileen shall be subject to VAT even if she does not register voluntarily under the VAT system. c. For purposes of the threshold of P3,000,000, the restaurant and the practice of profession are considered as separate taxpayers. d. For purposes of the threshold of P3,000,000, the aggregation rule for each taxpayer shall apply. Thus, the gross receipts from the restaurant shall be added to the receipts from the practice of profession. Sako Na Transportation Company is a holder of a franchise to operate five (5) units of passenger buses (seating capacity is 44 passengers) in the Bicol the Region. It also owns a gas station which is used exclusively to load its buses with diesel fuels, and a garage with service shop exclusively to its own buses although in very rare instances it is accepting repair jobs from outsiders. During the last quarter of 2023, it had the following gross receipts: From the buses From the gas station (in loading its own buses) From the garage for repair jobs from outsiders 280,000.00 300,000.00 12,000.00 How much is the common carrier's tax payable? 17,760.00 a. 8,400.00 b. 8,760.00 c. 17,400.00 d. From the buses From the garage for repair jobs from outsiders Gross receipts Rate of Tax Common carrier’s tax 280,000.00 12,000.00 292,000 3% 8,760.00 Numbers 28 and 29 ate based on the following information: Radio Station DYKKL has an annual gross receipts ranging from P4,000,000 to P5,000,000. During the quarter, it had gross receipts from advertisements of P330,000, while the disbursement subject to VAT amounted to P224,000, inclusive of tax. 28 The franchise tax payable by DYKKL is a. b. c. d. 30,000.00 9,900.00 50,000.00 10,000.00 Gross receipts - radio station Rate of tax Franchise tax P 330,000 3% 9,900.00 29 How much is the VAT payable if it is registered under the VAT system? 10,000.00 a. 9,900.00 b. 11,357.00 c. 15,600.00 d. Output tax (330,000 x 12%) Less: Input tax 224,000 – (224,0000/1.12) 39,600.00 24,000.00 VAT Payable 15,600.00