Tax2 Seatworks-03.23.2020

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I. True or False. Write T if the statement is correct and F if the statement is incorrect.
1. Non-VAT taxpayers pay their quarterly income tax in three monthly payments.
2. Sales returns and allowances are deductible against gross selling price.
3. The sale of fruits and vegatables is exempt from business tax.
4. The transport services of an international carrier is exempt from VAT.
5. A seller is subject to percentage tax if he is non-VAT registered even if his sales or receipt
exceed the VAT threshold.
6. The 3% general percentage tax applies to non-VAT registered taxpayers.
7. All sales by a businessman are considered made in the course of business.
8. The sale of capital assets by a business is also considered made in the course of business being
incidental to business operations.
9. The sale of ordinary assets by a business is considered made in the course of business.
10. Agricultural cooperatives are exempt from VAT.
11. Electrical cooperatives are subject to VAT.
12. The sale of commercial lots where selling prices do not exceed P1,919,500 a unit is exempt.
13. A seller of service which is specifically subject to percentage tax is subject to VAT if its 12-
months sales or receipts exceeded the VAT-threshold.
14. A seller is subject to percentage tax even if he registered as VAT taxpayer if his annual sales do
not exceed the VAT threshold.
15. Common carriers are vatable on their transport of cargoes or baggage.
16. Commercial activity means provision of goods or services to the public for a profit.
17. Once employed, one cannot be considered engaged in business.
18. A self-employed individual is engaged in business.
19. The employment of chemical treatment to agricultural or marine food products is considered
state altering.
20. Restaurants are exempt from VAT.
21. The sale of fertilizers, seeds and pesticides is exempt from VAT.
22. To be subject to VAT, one has to be registered under the VAT system.
23. VAT exempt sales are subject to percentage tax.
24. Franchise grantees of private franchises are vatable.
25. The term goods or properties includes real properties held primarily for sale, lease or use in the
ordinary course of business.
26. Corporations pay quarterly VAT while individuals pay VAT annually.
27. The export sales by VAT taxpayers are exempt from VAT.
28. The export sales by non-VAT taxpayers are subject to zero-rated VAT.
29. Winnings from cockpits are subject to percentage tax.
30. The overseas communication tax applies to both incomming and outgoing dispatch of messages
or communication.
II. Determine which of the following is subject to VAT, 3% percentage tax on VAT exempt persons or neither
VAT nor 3% percentage tax on VAT exempt persons.
1. Seller of VAT subject goods, not VAT registered, gross annual sales do not exceed
P1,919,500
2. Service contractor, VAT registered, gross annual receipts do not exceed P1,919,500
3. Milling for others, not VAT registered, gross annual receipts exceed P1,919,500
4. Seller of fresh fish, gross annual sales exceed P1,919,500
5. VAT registered seller of both VAT subject goods and VAT exempt goods (optionally
registered VAT exempt sales)
III. Determine which of the following is subject to VAT, 3% percentage tax on VAT exempt persons or neither
VAT nor 3% percentage tax on VAT exempt persons.
1. Transport of passengers by domestic common carrier by land
2. Transport of goods and cargoes by domestic common carrier by land
3. Transport of passengers, goods and cargoes by domestic common carrier by sea
4. Transport of passengers, goods and cargoes by domestic common carrier by air
5. Transport of passengers, goods and cargoes by calesa
6. Transport of passengers, goods and cargoes by banca
IV. Determine to what business tax will the following be subject to:
1. Franchise grantee of radio and/or television broadcasting, not VAT-registered, gross receipts
on sales of air time, P10,000,000
2. Franchise grantee of radio and/or television broadcasting, VAT-registered, gross receipts on
sales of air time, P10,000,000
on sales of air time, P15,000,000
from lease of office spaces, P1,919,500
5. Franchise grantee of radio and/or television broadcasting, VAT-registered, gross receipts from
lease of office spaces, P1,919,500
from lease of office spaces, P2,500,000
7. Franchise grantee of radio and/or television broadcasting payments received from persons who
used its communication facilities to make overseas calls, P3,000,000
8. Franchise grantee of water of gas and water utilities on gross receipts from sale of water and
gas, P1,919,500
9. Franchise grantee of water of gas and water utilities on gross receipts from sale of water and
gas, P3,000,000
10. Franchise grantee of water of gas and water utilities, not VAT-registered on gross receipts
from lease of office space, P1,919,500
11. Franchise grantee of water of gas and water utilities, VAT-registered on gross receipts from
lease of office space, P1,919,500
12. Franchise grantee of water of gas and water utilities, not VAT-registered on gross receipts
from lease of office space, P2,500,000

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