VALUE ADDED TAX

1. One of the following is not a major business internal revenue tax in the Tax Code
a. VAT b. Excise tax c. Income tax d. Percentage tax

2. Which of the following statements is true?

a. Those who are not in paragraphs (a) to (u) (exempt transactions) of Section 109 at the NIRC whose
annual gross sales or receipts exceed P1.5M shall be subject to the 12% VAT
b. Those who are in paragraphs (a) to (u) (exempt transactions) of Section 109 of NIRC regardless of
annual gross sales or receipts shall be exempt from the VAT, hence are subject to the 3%
percentage tax
c. Those who are not in paragraphs (a) to (u) (exempt transactions) of Section 109 of NIRC whose
annual gross sales or receipts do not exceed P100,000 shall exempt from the VAT, but are subject
to the 3% percentage tax
d. Those who are kin paragraphs (a) to (u) to (u) of Section 109 of NIRC, regardless of annual gross
sales or receipts shall be exempt from the VAT

3. One of the following is not a transaction deemed sale

a. Transfer, use or consumption not in the ordinary course of business of goods or properties
originally intended for sale or for use in the course of the business
b. Distribution or transfer to shareholders or investors of goods or properties as share in the profits
of a vat-registered person or to creditors in payment of debt
c. Retirement from or cessation of business, with respect to inventories of taxable goods on hand as
of the date of such retirement or cessation
d. Consignment of goods if actual sale is made within 60 days following the date such goods were
consigned

4. The allowable transitional input tax is

a. The lower between 2% of the value of beginning inventory or actual vat paid on such inventory
b. The higher between 2% of the value of the beginning inventory or actual vat paid on such
inventory
c. The actual vat paid on the beginning inventory
d. 2% of the value of beginning inventory

5. Which of the following input taxes can be refunded, converted into tax credit certificates or carried over
to the nest quarter at the option of the vat registered taxpayer
a. Input tax on purchase of raw materials
b. Input tax on importation of supplies
c. Input tax on zero-rated sales of goods or services
d. Input tax on purchase of services

6. The value added tax due on the sale of the taxable goods property and services by any person whether
or not he has taken the necessary steps to be registered
a. Input Tax b. Output Tax c. Excise Tax d. Sales Tax

7. The taxpayer is a VAT registered real estate dealer

Selling price P 6,000,000
Zonal Value 6,300,000
FMV, in the assessment rolls 5,800,000
Payments made by the buyer
 March 15, 2009 P 750,000
October 15, 2009 750,000
March 15, 2010 2,250,000
October 15, 2010 2,250,000
a. The output tax on March 15, 2009 collection is
a. P90,000 b. P756,000 c. P283,500 d. P94,500

b. The output tax on March 15, 2010 collection is

a. P94,500 b. P270,000 c. P756,000 d. P283,500

8. Using the preceding number, but the FMV in the assessment rolls is P6,500,000
a. The output tax on October 15, 2009 collection is
a. 780,000 b. P90,000 c. P97,500 d. P270,000

b. The output tax on October 15, 2010 collection is

a. P780,000 b. P135,000 c. P270,000 d. P292,500

9. A is engaged in two (2) lines of businesses, one with VAT and the other is NON-VAT. His records show
the following (VAT not included):
Sales
From VAT business P 4,000,0000
From NON-VAT business 6,000,000
Purchases of goods from VAT suppliers:
For VAT business 2,000,000
For Non-VAT business 3,000,000
Purchases from VAT supplies used for
both VAT and Non-Vat businesses 20,000
Operating Expenses 1,800,000
a. The VAT payable is
a. P600,000 b. P240,000 c. P237,600 d. P239,040

b. The net income is

a. P3,180,000 b. P180,000 c. P2,818,560 d. P192,000

10. Monthly VAT declaration is filed on or before the

a. 10th day from the end of each month
b. 20th day from the end of each month
c. 25th day from the end of each month
d. 30th day from the end of each month

11. Quarterly VAT return shall be filed on or before the

a. The 10th day from the end of each quarter
b. The 20th day from the end of each quarter
c. The 15th day from the end of each quarter
d. The 25th day from the end of each quarter

12. Value Added Tax is a/an

a. Indirect tax b. Direct tax c. Local tax d. Personal tax
13. Statement 1 – A taxpayer whose gross sales or receipts exceeded the amount of P1,500,000 shall pay
the VAT even if he is not vat registered consequently, he is also entitled to input taxes.
Statement 2 – Importers of goods for personal use is not subject to VAT if he is not VAT registered.
a. Both statements are true c. Only statement 1 is true
b. Both statements are false d. Only statement 2 is true
14. One of the following statements is incorrect?
a. Imported goods which are subject to excise tax are no longer subject to VAT
b. VAT on importation is paid to the Bureau of Customs before the imported goods which are
released from its custody
c. Expenses incurred after the goods are released from Customs custody are disregarded in
computing the VAT on importation
d. When a person who enjoys a tax-exemption on his importation subsequently sells in the
Philippines such importation to a non-exempt person, the purchaser-non-exempt person shall
pay the VAT on such importation

15. One of the following is not an activity subject to VAT

a. Sale on retail of goods by dealer
b. Sale of bamboo poles by a dealer
c. Sublease of real property in the course of business
d. Importation of ordinary feeds for poultry chicken

16. Taxpayer operates a Grocery Store and is not-VAT registered. His annual gross sales amounted to
P1,500,000 for the year although his operations resulted net loss for the year 2006. He is subject to
a. 3% OPT c. MCIT – 2%
b. VAT d. No, because the operations resulted to loss

17. Which statement is correct?

a. Zero rated sales is exempt from the VAT
b. A person whose sales or receipts do not exceed P250,000 is exempt from VAT and OPT
c. A person who issues a VAT invoice on a VAT exempt transaction is nevertheless subject to VAT on
the said transaction
d. Entities which are exempt from income tax are also exempt from VAT

18. Which of the following importation is subject to VAT?

a. Importation of frozen meat c. Importation of apples for personal consumption
b. Importation of bamboo poles d. Importation of grapes for sale

19. Which of the following is subject to VAT?

a. Sale of smoked fish c. Sale of shells and coral products by a dealer
b. Sale of lechon d. Sale of newspapers

20. Which of the following lessors of residential units is / are subject to VAT?
A B C D
No. of apartment units 20 15 10 10
Monthly rent / unit P9,000 P10,000 P12,000 P14,000
a. B and D b. C and D c. B, C and D d. D only

21. K imported a car from USA for her personal use. Total landed cost is P250,000, including customs duties
of P500,000. VAT on importation is
 a. P0 b. P20,000 c. 36,000 d. P30,000

22. An importer wishes to withdraw its importation from the Bureau of Customs. The imported goods were
subjected to 10% custom duty in the amount of P12,500 and other charges in the amount of P9,500. The
VAT due is
a. P12,500 b. P17,640 c. P13,364 d. P14,700
23. A imported an article from USA. The invoice value of the imported article was $7,000 ($1 – P50). The
following were incurred in relation with the importation
Insurance P15,000
Freight 10,000
Postage 5,000
Wharfage 7,000
Arrastre charges 8,000
Brokerage fee 25,000
Facilitation fee 3,000
a. P50,000 b. P25,000 c. 50,500 d. P60,000

24. Assuming that the imported article above was sold for P600,000, the VAT exclusive. The VAT payable is
a. P60,000 b. P12,000 c. P9,500 d. P9,200

25. The A Bakers sells cakes and pastry to well known hotels in Metro Manila area. The hotels are allowed
credit based on the track record of the hotels. The sale by the store in April 2009 was P224,000 including
the VAT. 75% f the sales are normally on account. How much is the output tax for the month on April
2009?
a. P22,000 b. P20,000 c. P16,500 d. P24,000

26. A, trader, made the following sales of goods during the month of June 2009, exclusive of VAT:
Cash sales P 200,000
Open Account on sales 100,000
Installment Sales 100,000
Note: Receipt from installment sales 40,000
Consignment made (net of vat)
June 15, 2009 100,000
May 15, 2009 100,000
April 15, 2009 100,000
Output tax is
a. P50,000 b. P34,000 c. P60,000 d. P72,000

27. A, a VAT registered, made the following purchases during the month of January 2010
Goods for sale, inclusive of VAT P224,000
Supplies, exclusice of VAT 20,000
Office air conditioner, total invoice amount 56,000
Home appliances for residence, gross of VAT 17,600
Repair of store, total invoice amount evidence by
ordinary receipt of the contractor 4,400
 Creditable input taxes are
a. P26,400 b. P29,400 c. P24,000 d. P32,400

28. A taxpayer registered under the VAT system on January 1, 2010. His records during the month show

Value of inventory as of Dec. 31, 2009, purchased from VAT registered person P50,000

VAT paid on inventory as of Dec. 31, 2009 6,000

Value of inventory as of Dec. 31, 2009, VAT exempt goods 60,000

Sales, net of VAT 140,000

Sales, gross of VAT 45,000

Purchases, net of VAT 70,000
VAT payable is
a. P11,100 b. P7,221 c. P3,100 d. P18,100

29. The following are the data of City Appliance Marketing Corporation for the last quarter of 2009
Sales up to December 15, total invoice P336,000
Purchases up to December 15, net of input tax 215,000
Additional information:
On December 16, 2009, City Appliance Marketing Corporation retired from its business and the
inventory valued at P190,000 was taken and transferred to New City Appliance Corporation. There is a
deferred input tax from the third quarter of the year of P3,500.
How much is the total vat due and payable by City Appliance Marketing Corporation in its operations in
the last quarter and its retirement from business?
a. P22,500 b. P3,500 c. P6,350 d. P29,500

30. Assuming that New City Appliance Corporation has the following data for the first quarter of 2010
Sales, total invoice in value P448,000
Purchases, total invoice in value 224,000
How much is the VAT payable of New City Appliance Corporation for the first quarter of 2010?
a. P28,000 b. P1,200 c. P30,000 d. P24,000

31. A, is a VAT-registered dealer of appliances. The following data are for the last quarter of 2009
Sales, net of output tax P6,800,000
Purchases, net of input tax 5,500,000
Sales return 200,000
Purchase return 300,000
Deferred input tax (carried over from the third quarter of 2009) 9,500
The VAT payable for the last quarter of 2009 by A is
a. P120,000 b. P70,500 c. P80,000 d. P158,500

32. A VAT registered person is engaged in the sale of VAT taxable goods at the same time is also engaged in
non-Vat business establishment. During the year, total sales of the Vat business amounted to P336,000.
The sales of the non-Vat business amounted to P200,000 with a separate percentage tax P6,000 for a
total of P206,000. During the same quarter, repairs on the building amounted to P10,000 plus P1,200
VAT. The creditable input tax is
33. Using the above data, the VAT payable is
a. P6,000 b. P7,200 c. P1,000 d. P4,320

34. A Refining Company manufactures refined sugar. It had the following data during the first quarter of
2010
Sales of refined sugar, net of VAT P2,000,000
Purchases from farmers of sugar cane used in the manufacturer
of refined sugar 500,000
Purchases of packaging materials, gross of VAT 784,000
Purchases of labels, gross of VAT 112,000
The VAT payable is
a. P124,000 b. P112,500 c. P70,000 d. P62,000

35. A Corporation, a VAT manufacturer submitted the following data for the last month of 2010 (all figures
are at total invoice value):
Materials purchased P280,000
Purchase returns 16,800
Sales, local 336,000
Sales return, local 22,400
Foreign currency denominated sales 170,000
Purchases from BOI registered enterprise 31,360
The VAT payable is
a. P18,900 b. P21,600 c. P1,630 d. P2,040

36. M, building contractor showed to you the following data

Contract price, net P5,000,000
Cash received (VAT included) 2,240,000
Receivables 3,000,000
Advances on other contract still unearned (w/o VAT) 1,000,000
Payments (VAT excluded)
For materials 500,000
For supplies 100,000
For operating expenses 200,000
For services of sub - contractors (VAT included) 1,680,000
The VAT payable is
a. P108,000 b. P348,000 c. P350,000 d. P12,000
Other Percentage Taxes

1. One of the following is subject to common carrier’s tax

a. Owners of banca
b. Owners of the animal drawn two wheeled vehicles
c. Common carriers by land for transport of goods and services
d. Common carriers by land by transport of passengers

2. A person whose business is to kept automobiles for hire or keep them stored for use or order
a. Keepers of garage c. Taxicab operators
b. Common carrier d. Tourist bus operator

3. The franchise tax of grantees of radio and television broadcasting whose annual gross receipts of the
preceding year do not exceed P10,000,000 shall be
a. 2% of the gross receipts c. 4% of the gross receipts
b. 3% of the gross receipts d. 5% of the gross receipts

4. One of the following is not subject to the 3% percentage tax

a. International air carrier doing business in the Philippines
b. International shipping carrier doing business in the Philippines
Domestic carriers and keepers of garage
c. Franchise grantee of electric utilities
d. Franchise grantee of electric utility

5. Franchise grantees of city gas and water utilities are subject to franchise tax of
a. 2% b. 3% c. 4% d. 5%

6. Amounts received for oversees dispatch, message or conversations originating from the Philippines are
subject
a. 3% franchise tax c. 2% franchise tax
b. 10% overseas communication tax d. 10% VAT

7. A tax on the right or privilege to enter places of amusement

a. VAT b. Franchise tax c. Amusement tax d. Income tax

8. One of the following is not subject to amusement tax on gross receipts

a. Disco houses b. Cockpits c. Professional basketball d. Bowling alleys

9. All of the following except one are liable to ½ of 1% stock transaction tax. Which one is not?
a. Individual taxpayers, whether citizen or alien
b. Corporate taxpayers, whether domestic or foreign
c. Estate and trust
d. Dealers in securities

10. Which of the following statements is incorrect?

a. A taxpayer whose annual gross receipts / sales exceeded P1,500,000 shall pay VAT even if he is not
VAT registered
 b. A taxpayer whose annual gross receipts / sales do not exceed P1,500,000 but who is VAT-registered
shall pay VAT
c. Percentage tax maybe imposed together with VAT
d. Percentage tax maybe imposed together with excise tax

11. ABC insurance Corporation, a domestic corporation received the following premiums (net of any tax)
INSURANCE
Life Fire Marine
Cash received P 400,000 P 300,000 P 200,000
Promissory notes 100,000 100,000  
Totals P 500,000 P 400,000 P 200,000
a. The percentage tax due is
a. P45,000 b. P55,000 c. P20,000 d. P25,000
b. The output vat is
a. P0 b. P72,000 c. P48,000 d. P60,000

12. ABC Corporation is a holder of franchise to operate transportation units on land. The records for the
month show (net of any tax):
Cargo Passenger
Gross receipts from transporting P 2,000,000 P 3,000,0000
VAT Supplier Non-VAT Supplier
Payments to P 800,000 P 300,000
The percentage tax due is
a. P150,000 b. P60,000 c. P90,000 d. P144,000

13. Using the preceding number, but the franchise is for air and sea transport, within the Philippines, the VAT
due is
a. P144,000 B. P600,000 c. P468,000 d. P504,000

14. Using the preceding number, but the route is from Philippines to foreign country, which of the following is
correct?
a. The corporation is exempt from VAT
b. The corporation is subject to percentage tax
c. The output vat is 0, hence the corporation cannot claim input tax
d. May claim a refund or credit the input taxes against other internal revenue taxes

15. In the third quarter of 2007, a taxpayer engaged in the sale of services whose annual gross receipts do not
exceed P1,500,000 has the following data
Accounts receivable, beginning of the quarter P 50,000
Sales during the quarter 100,000
Accounts receivable, end of the quarter 75,000
Purchase of supplies, total invoice amount 11,200
The percentage tax due for the quarter is
a. P2,250 b. P3,000 c. P7,500 d. P6,500

16. A, operates a ferryboat. During a particular quarter, its receipts consists of the following:
Gross receipts (without vat)
 Transport of passengers P 1,000,000
Transport of goods 1,500,000
Transport of cargoes 500,000
The common carrier’s tax payable is
a. P30,000 b. P90,000 c. P100,000 d. None

17. Using the data above, the output vat is

a. P360,000 b. P90,000 c. P100,000 d. P240,000

18. A is the owner of a small variety store. His gross sales in any one year do not exceed P1,500,000. He is not
vat-registered. The following data are taken from the books of the variety store for the quarter ending
March 31, 2007
Merchandise inventory, December 31, 2006 P100,000
Gross sales 450,000
Purchase from VAT-registered supplies 350,000
The percentage tax due is
a. P10,000 b. P13,500 c. P16,500 d. None

19. A, is a holder of franchise to sell electricity. In a particular quarter, its gross receipts amounted to
P2,000,000 from sale of electricity. It has also receipts from the lease of its auditorium and theater
amounting P600,000. The percentage tax due for the quarter is
a. P40,000 b. P60,000 c. P100,000 d. None

20. A operates a cockpit. Inside the cockpit, he also operates a restaurant. Data for the particular quarter
follow:
Gross receipts
Cockpit operations P500,000
Restaurant operations:
Sale of foods 100,000
Sale of liquor 150,000
The amusement tax due from A is
a. P90,000 b. P135,000 c. P225,00 d. P75,000

21. Using the data above, except that the restaurant is not owned by A but is owned by another person, B,
not VAT registered and whose annual gross sales never exceeded P1,500,000. The amusement tax due
from A is
a. P90,000 b. P135,000 c. P225,000 d. P75,000

22. Continuing the preceding number, the percentage tax due from B is
a. P90,000 b. P135,000 c. P225,000 d. P7,500

23. A, a resident citizen, promoted a world boxing championship in Manila featuring B, a Filipino Champion.
Gate receipts amounted to P3,000,000 and additional receipts from television coverage was P2,000,000.
The amusement tax due is
a. None b. P500,000 c. P300,000 d. P900,000

24. Assuming that the above data is not a world championship but a Philippine national boxing championship,
how much is the amusement tax?
 a. None b. P500,000 c. P300,000 d. P900,000

25. A is a radio-tv broadcasting franchise grantee. During the preceding year, its gross receipts did not exceed
P10,000,000. During the first quarter of the current year, it has the following data:
Gross receipts, sale of airtime P 2,000,000
Gross receipts, use of radio station's communication facilities 500,000
Business expenses 700,000
The franchise tax due for the first quarter is
a. P600,000 b. P40,000 c. P75,000 d. P39,000

26. A horseracing enthusiast has the following winnings during a particular racing day
Total winnings (winner take all) P 10,000
Cost of winning tickets 500
The tax on winnings is
a. P1,000 b. P400 c. P950 d. Zero

27. Using the data above, but the total winnings came from double bet, the percentage tax on winnings is
a. P 1,000 b. P400 c. P950 d. P380

28. A domestic corporation paid P40,000 stock transaction tax on Initial Public Offering (IPO) of P500,000
shares. After the IPO, there were 800,000 shares outstanding. The selling price of IPO per share was
a. P10 b. P8 c. P4 d. P2

29. A Realty Corporation in the course of business sells real property. During the month of January 2010, it
had the following data per sales document (VAT excluded):
Cash Sales P 800,000
Sales on installment payment basis (initial payment is
25% of the selling price) 500,000
The real property sold for cash had a zonal value of P700,000 (excluding VAT) and the property sold under
the installment payment basis had a fair market value of P600,000 (excluding VAT). How much is the
output vat/percentage tax on the sale of real property?
a. P101,000 b. P114,000 c. P108,000 d. P156,000