Mid Tax
Mid Tax
Mid Tax
21. Hananiah Corporation has the following sales and purchases for
the quarter ending December 31,2018:
October Sales
50,000
Purchases 40,000
Purchases
80,000
How much Is the vat payable (carry-over) for the quarter ending December
31, 2018?
c. Both a and b
c. Both a and b
c. Both a and b
d. All of these
26. One of the following is a zero-rated sale under TRAIN Law.
27. Under the TRAIN Law, which of the following sales is not be zer-
rated?
a. Export slaes
Prepaid rental
Subject to vat
33. Which of the following receipts for 2018 current year from lease
of residential units is subject to vat?
Answer: II and IV
34. Which is true? On sale of service, the tax base in computing for the
vat is
Gross receipts
35. In the value added tax on sale of services, the output tax is
computed:
37. The following information and data (net of vat) are from the records
of Fantastic $ Corporation, a VAT taxpayer in connection with its
construction contracts. They cover the third quarter of 2018 taxable
year. Vat payable for the quarter is (disregard monthly payments)
Dealer in securities
41. A dealer in securities has the following for the year 2018
Sales, shares held as inventory
5,000,000
Vat payable
P324,000
43. Which statement is correct? The output value added tax on goods
or properties sold:
44. Which of the following is not a sale and therefore is not a subject to
the value-added tax?
Consignment sales
55. Which of the following is not a proper inclusion for the computation
of VAT on imported items?
d. Facilitation expense
Carry-over and apply his excess tax credit against output taxes in
the subsequent period or periods.
63. Who may claim transitional input tax as tax credit against
output tax?
Taxpayers who elect to revert to being a vat exempt from being vat
subject
A VAT taxpayer had the following data on its operations for the month of
January;
This is the first month of being liable to the value added tax. Data on
inventories at the beginning of the period bought from VAT registered
persons follow:
Statement 2: The five percent (5%) final VAT withholding rate shall
represent the net VAT payable of the seller.
P0
Ivan, vat registered real estate dealer sold a residential lot on October 2018.
The following information was made available on the terms of the sale:
72. How much was the output tax due on October 2018?
Answer: 360,000
Answer: P0
Output Vat for 2015 = P0; The entire output vat was paid in 2014
74. Lady sells real property in the course of its business. During the last quarter of
2018, it had sold a parcel of land under the following terms (vat inclusive):
Downpayment P112,000
1st installment payment 112,000
Total (vat inclusive) 224,000
Less: VAT (P224,000 x 3/28) (24,000)
Initial Payment (exclusive of vat) P200,000
Divided by contract price (P1.12M x 3/28) 1,000,000
Ratio of Initial Payment over SP 20%
Output vat for 2017 (200k x12%) P24,000
75. Alex is in the course of trade selling real property. During the
month of February, it had the following data (per sales document,
inclusive of vat). How much is the output vat on the sale of real
property?
Only one invoice for both VAT and NON-VAT transactions shall be
issued
Output vat
P36,000
Input vat (4,320)
Vat Payable P31,680
80. Data for a trader with one line of business subject to VAT and
another line of business not subject to VAT:
The following data during the month relates to William Company, a VAT
registered person:
Output VAT
Domestic sales (330,000 + 274,996) x 3/28
P64,821
Export sales (zero rated)
0
Input VAT (69,948)
VAT payable
(P5,127)
The amount of input tax which can be refunded or converted into tax credit
certificates at the option of the VAT-registered person is: 57,600
84. In order that an invoice will qualify as a VAT invoice or receipt for
purposes of claiming tax credit for input tax, it must contain:
86. Mr Juan Dela Cruz, VAT-exempt, issued VAT invoice to Pedro, VAT-
registered trader. As a consequence, Mr. Juan Dela Cruz would:
TRUE OR FALSE
1. Persons not subject to vat are likewise exempt from other percentage
tax.-FALSE
10. International carriers are exempt from vat under the tax code.
However, they have the option to register under the vat system which
shall be irrevocable for a period of 3 years.- FALSE
11. The 3% percentage tax for international carriers is in the addition to
income tax. - TRUE
14. There are franchise holders whose gross receipts are subject to 12%
vat even if not vat registered.- TRUE
18. For purposes of computing the gross receipts tax, the net trading loss
shall be deducted from other gross receipts regardless of source.-FALSE
19. In computing the net trading gain within the taxable year for gross
receipts tax, the figure ro be reported in the monthly percentage tax
return shall be the cumulative total of the net trading gain or loss since
the first months of the same taxable year.- TRUE
21. In computing the applicable rate for IPO purposes, shares of stock,
sold, bartered, exchanged should be divided by the total outstanding
shares of stock before listing in the local stock exchange.-FALSE
23. The applicable IPO rate shall be applied in computing teh tax due on
IPO of existing shareholders.-TRUE
24. A "follow-on follow-through offering" made by the issuing corporation
shall be subject to percentage tax of 6/10 of 1% of gross selling price and
documentary stamp taxes, beginning January 1, 2018.-FALSE
26. Like value added tax, percentage taxes are paid on a quarterly
(cumulative) basis.-TRUE
27. Generally every person liable to pay the percentage taxes shall file a
quarterly return within 25 days after the end of each taxable quarter.-
TRUE
28. Large taxpayers shall file a consolidated return and pay the tax
accordingly.- TRUE
29. Large taxpayers are classified based on the tax payments and as to
financial condition.-TRUE
MULTIPLE CHOICE.
1. Percentage tax is
II. An individual taxpayer whose gross sales for the year amounted to
P100,000.
III. School bus operator whose gross receipts for the year amounted
to P3,000,000.
6. Binay non-vat registered, has the following date for the year 2018.
Only 50% of the above sales were collected. How much is the vat or
percentage tax for the year 2018?- P30,000
9. Assume the taxpayer is vat registered, the VAT payable for the
quarter is:
x Vat rate 12 %
Restaurant 1,350,000
1,000,000
Barbershop 625,000
600,000
food products
Purchases of goods from VAT suppliers totaled P1,200,000 (related to VAT business if
applicable)
How much is the VAT payable or percentage tax for the year? P93,000
(1,350,000 + 625,000 – 1,200,000) x 12% = 93,000
11. This refers to persons, corporations, firms or associations engaged in the business of
carrying of transporting passengers or goods or both, by land, water, and air, for
compensation, offering their services to the public and shall include transportation
contractors.
Common carriers
12. A person whose business is to keep automobiles for hire or keep them stored for use r
order
Keepers of garage
13. A keeper of garage whose gross receipts for the year exceeds P3,000,000 is subject to
Common carrier’s tax
14. Which of the following is subject to the 3% common carrier’s tax?
Domestic carriers by land for the transport of passengers
15. One of the following statements is wrong. Operators of transport facilities by land are
Subject to the Vat on gross receipts from transporting passengers
16. Operators of transport facilities by land are:
Subject to VAT on gross receipts from transporting goods and cargoes. Subject to
percentage tax on gross receipts from transporting passengers. Subject to VAT on gross
receipts from renting out its transportation facilities
A domestic transportation contractor by land is engaged in the transport of passengers,
goods, and cargoes
17. If the transportation contractor is not vat registered, what business taxes is he liable
3% tax on VAT-exempt persons on gross receipts from transport of goods and cargoes and
3% common carrier’s tax on gross receipts from transport of passengers.
18. If the transportation contractor is vat-registered, what business taxes is he liable
12% VAT on gross receipts from transport of goods and cargoes and 3% common carrier’s
tax on gross receipt from transport of passengers.
19. Supercat is a common carrier by sea. During a particular quarter, its receipts consists of
the following (exclusive of taxes).
Transport of passengers P2,000,000
Transport of goods 3,000,000
Transport of cargoes 1,500,000
The outut VAT and OPT due for the quarter are: 780,000 and 0
(2M + 3M + 1.5M) x 12% = 780,000
Isarog is a common carrier with passenger buses and cargo trucks. For the month of June
2018, it had the following data on gross revenues and receipts (exclusive of taxes):
For transporting passengers (receipts) 660,000
For transporting cargoes (revenues) 440,000
Actual receipts amounted only to P400,000
For renting out to the MMDA its towing trucks (receipts) 100,000
P20,000 represents revenue from the first quarter
And the balance of P80,000 represents receipts
From income earned in June.
20. The percentage tax is: 19,800
660,000 x 3% = 19800
21. The output vat is: P60,000
400,000 + 100,000 = 500,000 x 12% = 60,000
22. Masbate Liner CO. is a common carrier with passenger buses and cargo trucks. For the
month, it had the following data on receipts, taxes not included
From transport of passengers 800,000
From transport of cargoes 200,000
From bus rentals for school fieldtrips 400,000
(800,000 + 400,000) x 3% = 36,000
23. Milagros Liens, a vat registered person, has the following gross receipts in February:
Bus 1 (carriage of goods, P18,000) 100,000
Bus 2 (carriage of goods, 13,500) 165,000
Taxi 90,000
Jeepney 35,500
Cargo truck 45,000
Sea vessel 250,000
Additional information:
Salaries of drivers and conductor 125,000
Cost of oil and gasoline 175,000
During the month Bus 1 was bumped by another bus owned by Mandaon Lines and paid
Milagros Lines P120,000 for the damage.
25. An international air carrier doing business in the Philippines shall be subject to
3% common carrier’s tax on gross receipts from transport of cargoes in the Philippines only
Japan Air Lines (a resident international carrier) has the following data for the current year:
Gross receipts – PH 10,000,000
Gross receipts – Japan 15,000,000
Expenses- PH 4,000,000
Expenses – Japan 8,000,000
Additional information:
60% of its gross receipts from Ph sources were derived from transport of passengers
while 50% of its gross receipts from Japan were derived from its cargo operations
50% of its expenses (PH and Japan) are related to passenger operations
26. How much is the income tax due of Japan Air Lines
10,000,000 x 2.5% = 250,000
27. How much is the income tax due assuming Japan Air Lines is subject to a preferential
income tax rate of 1 ½ % under an existing international agreement or treaty.
10M x 1.5% = 150,000
28. How much is the income tax due assuming Japan Air Lines is exempt from income tax
under reciprocity rule?
Exempt
29. What is the applicable business tax of Japan Air Lines
3% common carrier’s tax on gross receipts derived from the transport of cargo from Ph to
another country
30. How much is the business tax due of Japan Air Lines?
(10M x 40% of his share on gross receipts) x 3% = 120,000
31. Which of the following statements is correct?
The Gross revenue for freight or cargo and mail shall be determined based on the
revenue realized from the carriage thereof
32. Statement 1: International air carriers and international shipping carriers shall not be
subject to 12% vat but to 3% common carrier’s tax based on gross receipts from Ph to
other countries
Statement 2: In cases when the Gross Philippines Billings Tax of 2.5% for international
carriers is not applicable (i.e., tax exempt based on reciprocity or treaty), the common
carrier’s tax under Section 118 of the NIRC, as amended, shall still apply
Statement 1 is FALSE, Statement 2 is TRUE
33. A right or privilege granted by the State to a person, individual or corporation, to
operate a public utility such as radio broadcasting, television station, electric light
system, telephone company, gas, and water utilities
Lending investors
34. Which of the following franchise grantees is subject to the franchise tax?
Franchise on gas and water utilities
35. One of the following is not subject to the 3% percentage tax
Franchise grantees of city gas and water utilities
36. Meralco is a holder of franchise to sell electricity. It also leases its first class auditorium
and theatre. In a particular month, its gross receipts from sale of electricity amounted
to P10M. The gross receipts from the lease of its auditorium and theatre amounted to
2M. How much is the franchise tax due for the month?
P0
As franchisee, the taxpayer had the following data on revenues and receivables (exclusive
of taxes):
Receivables .
Quarter ended 3/31/2018 Revenues Beginning End
Covered by the franchise 4,000,000 600,000 800,000
Not covered by the franchise 1,000,000 160,000
37. Assume that the taxpayer is generating and selling electricity, what is the correct
business taxes for the quarter? P556,800
[(4M + 1M + 600K) – 960K] x 12% = 556,800
38. Assume that the taxpayer is generating and selling gas and water, what is the correct
business taxes for the quarter
Covered Not covered
AR BEG 600,000
Revenues 4,000,000 1,000,000
AR END (800,000) (160,000)
Gross Receipts 3,800,000 840,000
Franchise tax rate 2% 12%
Business tax due 76,000 100,800
76K+108,800 = 176,800
How much was the overseas communications tax collected from persons who used the
communications facilities? -P300,000
P3M x 10% = P300,000
46. Red Mobile Communications has the following data for a particular month:
47. Statement 1: The tax on insurance premiums applies to every person, company or
corporation doing life insurance business of any sort in the Philippines except purely
cooperative companies and associations.
Statement 2: A person engaged in non-life insurance business is subject to value-added tax.
48. Statement 1: The tax on life insurance premiums is 2% based upon the total premiums
collected whether such premiums are paid in money, notes, credits or any substitute for
money.
Statement 2: The tax on agents of foreign insurance companies is 10% based upon the total
premiums collected.
STATEMENT 1 IS TRUE BUT STATEMENT 2 IS FALSE
49. Which of the following is subject to 12% percentage tax?
Life insurance policy premiums collected by a resident foreign insurance company.
50. Banks and non-bank financial intermediaries performing quasi-banking functions are
subject to:
GROSS RECEIPTS TAX
51. The taxpayer is a vat registered lessor of residential units. Monthly rent per unit is
P16,000 while his gross rental income for the year amounted to P2,500,000. Determine the
applicable business tax on his rental income.
52. Banko Natin sold a repossessed car to JJ at P1,000,000, P300,000 higher than the cost of
P700,000. The sale is.
Subject to gross receipts tax of 7%; Subject to regular corporate income tax
53. Rentals of property, real or personal, received by bank and non-bank financial
intermediaries performing quasi-banking functions are:
54. Banco de Makati, Inc. has the following data for the first month of the current year:
OPT% GRT
Interest income from lending activities from
instruments with remaining terms of:
Five years and less (5,000,000 x 5%) = P250,000
More than five years (3,000,000 x 1%) = 30,000
Dividends & equity shares from subsidiaries (1,000,000 x 0%) = 0
Rental income (500,000 x 7%) = 35,000
Net trading gains (300,000 x 7%) = 21,000
Total Gross Receipts Tax P336,000
55. Metro Bank is a domestic bank operating in Santiago City. The following are its data in a
month:
The percentage of gross receipts tax (GRT) for the month is:
OPT% GRT
Rentals from safety deposit boxes (P880,000 x 7%) P61,600
Net foreign exchange gains ( 220,000 x 7%) 15,400
Net trading gains from trading of securities (660,000 x 7%). 46,200
Trust fees (110,000 x7%) 7,700
Dividends from domestic corporations (30,000 x 0%) 0
Other service fees (220,000x 7%) 15,400
Interest income from lending activities from
instruments with remaining terms of:
Five years and less (700,000 x 5%) 35,000
More than five years (800,000x 1%) 8,000
Total Gross ReceiptsTax P189,300
56. Banco de Oro has the following income (loss) for the month of October 2018.
For the month of October 2018, how much is the gross receipts tax?
Interest income with maturity of less than 5 years (P500,000 x 5%) P25,000
Rentals (P500,000 x 7%) 35,000
Net trading loss = none; if net trading gain, tax is 7% ____
Gross receipt tax (GRT) P60,000
57. Based on the preceding number, assuming BDO has the following income on November
2018. How much is the gross receipts tax for November?
Interest income with maturity of less than 5 years (P1M x 5%) P50,000
Rentals (P500,000 x 7%) 35,000
Net trading gain
[200,000 – (100,000 net trading loss previous month) x 7%] 7,000
Gross receipt tax (GRT) P92,000
58. Tita Gore executed on November 10, 2013 a long term loan fr Security Bank UST branch
in the amount of P5,000,000 payable within 10 years with the first installment due on or
before November 10,2014 and the succeeding yearly installment on the same date of the
subsequent years. Assume that on November 10, 2018, the loan was predetermined and
that the interest paid and other fees revenue from 2014 up to year 2018, amounting to
100,000 annually were declared by the bank correctly and the applicable gross receipts
taxes paid. How much is the additional gross receipts tax still payable as recomputed on
November 10, 2018. If any, because of the loan reclassification due to pretermination?
59. Tax base of percentage tax on agent of a foreign insurance not allowed to do business in
the Philippines.
Premiums received from within the Philippines for the foreign insurance company.
61. Using the same data, how much is the vat payable?
62. A domestic insurance company has the following data for 2018:
How much is the tax on life insurance premiums?
P2M x 2% = P40,000
64. The operator of ome of the following places is subject to amusement tax.
COCKPITS