Tax Review (Taxrev) BSA 4th Year (Saturday, 8:00AM - 11:00AM) I - Multiple Choice
Tax Review (Taxrev) BSA 4th Year (Saturday, 8:00AM - 11:00AM) I - Multiple Choice
Tax Review (Taxrev) BSA 4th Year (Saturday, 8:00AM - 11:00AM) I - Multiple Choice
5. In order to be subject to the requirement of VAT registration, 14. In case of barter, sale, or exchange of real property, gross
a business must have: selling price means:
a. Gross sales or receipts exceeding ₱3,000,000 a. Zonal value or assessed value, whichever is higher.
b. Gross sales or receipts of at least ₱3,000,000 b. Fair market value or consideration, whichever is
c. Gross sales or receipts, other than those that are higher.
exempt under Section 109, exceeding ₱3,000,000 c. Zonal value or consideration, whichever is higher.
d. Gross sales or receipts, other than those that are exempt d. Appraised value or assessed value, whichever is higher.
under Section 109, of at least ₱3,000,000
15. Statement 1: If an item sold is subject to both value-added tax
6. Which among the following taxpayers can avail of the 8% flat and excise tax, the gross selling price includes the excise tax
rate of income tax? paid.
a. A non-VAT registered taxpayer whose annual VAT- Statement 2: Gross selling price is the amount of money
subject gross sales or receipts exceed P3,000,000 received by the seller in a sales transaction.
b. A non-VAT registered taxpayer whose annual VAT- a. Only Statement 1 is true.
subject gross sales or receipts do not exceed b. Only Statement 2 is true.
P3,000,000 c. Both Statements are true.
c. A VAT registered taxpayer whose annual VAT-subject d. Both Statements are not true.
gross sales or receipts exceed P3,000,000
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16. All of the following are requisites for discount to be allowed as 23. Which of the following is not a transaction deemed sale?
a deduction from the selling price, except: a. Retirement from or cessation of business
a. Determined and granted at the time of sale. b. Change of ownership of the business
b. Recorded in the seller’s books of accounts. c. Incorporation of a single proprietorship
c. Subject to condition d. Change of control of a corporation by the acquisition
d. Amount of discount is reflected in the invoice. of the controlling interest of such corporation by
another stockholder
17. Maria and Clara entered into a contract of sale of car.
Negotiations were made on March 1, 2021. They were able 24. Which of the following is a VAT-subject event?
to agree on the price via text message on April 1, 2021. They a. Change in the trade or corporate name of the business
signed the contract on May 1, 2021, and constructive delivery b. Approval of a request for cancellation of registration
of the car was made a week after on May 8, 2021. When shall due to a desire to revert to exempt status after the
VAT be recognized from the transaction? lapse of three (3) consecutive years from the time of
a. March 1, 2021 c. May 1, 2021 registration by a person who voluntarily registered
b. April 1, 2021 d. May 8, 2021 c. Merger of corporations
d. Consolidation of corporations
18. A sale is a sale on a deferred-payment basis if:
a. The down payment is at least 25% of the gross selling 25. Consignment of goods are transactions deemed sale:
price. a. If actual sale is not made within sixty (60) days
b. The down payment exceeds 25% of the gross selling following the date such goods were consigned
price. b. If actual sale is not made within ninety (90) days following
c. The initial payments are at least 25% of the gross selling the date such goods were consigned
price. c. If actual sale is not made within thirty (30) days following
d. The initial payments exceed 25% of the gross selling the date such goods were consigned
price. d. If actual sale is not made within one hundred twenty
(120) days following the date such goods were
19. When does constructive receipt occur? consigned
a. When the money is received by a construction worker.
b. When the seller has an unconditional right to receive the 26. Statement 1: Gross receipts of a PRC-licensed doctor is
payment due from the buyer. subject to VAT on professionals.
c. When the seller has a legally enforceable right to Statement 2: Gross receipts of a professional athlete is
demand the payment due from the buyer such as when subject to VAT on professionals.
the seller has already rendered the services agreed a. Only Statement 1 is true.
upon. b. Only Statement 2 is true.
d. When the money consideration or its equivalent is c. Both Statements are true.
placed at the control of the person who rendered the d. Both Statements are not true.
service without restrictions by the payor.
27. In order to be zero-rated, the sale and actual shipment of
20. Which of the following is an example of constructive receipt? goods from the Philippines to a foreign country:
a. Deposit in the bank account of the seller by the buyer a. Must be paid for in Philippine pesos.
which are made available to the seller of services b. Must be paid for in acceptable foreign currency.
without restrictions c. Must be FOB Shipping Point.
b. Making of a refundable deposit which shall be returned d. Must be FOB Destination.
to the buyer upon satisfactory completion of the services
rendered 28. Statement 1: ECOZONEs are separate customs territory by
c. Payment made by the buyer through checks, named fiction of law.
under the seller-payee, for the billed amount on services Statement 2: Sale to an entity located in an ECOZONE, even
rendered though such entity is not qualified to avail income tax holiday
d. Payment made by cash in a face-to-face transaction or 5% gross income tax, is a zero-rated sale.
a. Only Statement 1 is true.
21. The VAT base for non-life insurance companies is the total b. Only Statement 2 is true.
premiums collected. This includes: c. Both Statements are true.
I. Payment in money d. Both Statements are not true.
II. Payment in notes or credits
29. Which of the following is an export-oriented enterprise?
III. Payment in any substitute for money
a. Demi Corporation. Its export sales exceed 50% of the
a. I only c. I and III only total annual production of the preceding taxable year.
b. I and II only d. I, II, and III. b. Ariana Corporation. Its export sales exceed 70% of
the total annual production of the preceding taxable
22. Which of the following items is a VAT-subject receipt by a year.
lessor? c. Miley Corporation. Its export sales exceed 50% of the
a. Loan to the lessor total annual production of the three preceding taxable
b. Option money for the property year.
c. Prepaid rentals if the lessor uses the accrual method of d. Selena Corporation. Its export sales exceed 70% of the
accounting total annual production of the three preceding taxable
d. Security deposit for the faithful performance of year.
certain obligations of the lessee
30. Which of the following products is VAT exempt?
a. Rabbits c. Anacondas
b. Dogs d. Fighting cocks
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31. Which of the following is a zero-rated sale? 34. Sale of which of the following products is not exempt from
a. Sale of raw materials or packaging materials to a VAT?
nonresident buyer for delivery to a resident to be used in a. Shrimp c. Raisins
manufacturing, processing, packaging or repacking in b. Cactus d. Bananas
the Philippines of the said buyer’s goods and paid for in
acceptable foreign currency and accounted for in 35. Lydia Mila is engaged in the sale of chicken in various forms.
accordance with the rules and regulations of the Bangko The following are Lydia Mila’s sales:
Sentral ng Pilipinas (BSP).
b. Sale of raw materials or packaging materials to a Live chickens ₱8,510,000
nonresident buyer for delivery to a resident local Fighting cocks 300,000
export-oriented enterprise to be used in Fresh chicken meat 210,000
manufacturing, processing, packaging or repacking
Cut chicken meat 7,700,000
in the Philippines of the said buyer’s goods and paid
for in acceptable foreign currency and accounted for Boiled chicken meat 2,220,000
in accordance with the rules and regulations of the Roasted chicken meat 510,000
Bangko Sentral ng Pilipinas (BSP). Smoked chicken meat 5,310,000
c. Sale of finished goods to a nonresident buyer for delivery Salted chicken meat 4,640,000
to a resident to be used in manufacturing, processing,
Chicken nuggets 2,130,000
packaging or repacking in the Philippines of the said
buyer’s goods and paid for in acceptable foreign Chicken cubes 4,970,000
currency and accounted for in accordance with the rules Chicken hotdog 4,500,000
and regulations of the Bangko Sentral ng Pilipinas (BSP). Total ₱41,000,000
d. Sale of finished goods to a nonresident buyer for delivery
to a resident local export-oriented enterprise to be used How much are the VAT-exempt sales?
in manufacturing, processing, packaging or repacking in a. 8,720,000 c. 29,100,000
the Philippines of the said buyer’s goods and paid for in b. 16,350,000 d. 29,400,000
acceptable foreign currency and accounted for in
accordance with the rules and regulations of the Bangko 36. Which of the following is a VAT-exempt item?
Sentral ng Pilipinas (BSP). I. Newspapers devoted principally for the publication
of local news and not national news.
32. Which of the following is not a zero-rated sale under the II. Books in electronic format
Omnibus Investments Code?
a. Sales to bonded manufacturing warehouse of export- a. I only c. Both I and II
oriented manufacturers b. II only d. Neither I nor II.
b. Sales to the government of the Philippines BIR Ruling 083-2014
c. Sales to export processing zones https://www.bir.gov.ph/index.php/archive/2014-bir-
d. Sales to registered export traders operating bonded rulings.html
trading warehouses Page 8 – CPAR handouts
https://www.divinalaw.com/dose-of-law/printed-
33. Lakas Tama Company is a domestic corporation engaged in digital-publication/
the generation and distribution of electricity from various
sources. The following are the sales of Lakas Tama of 37. Which of the following is a VAT-exempt sale of services?
electricity with source indicated: I. Transport of cargoes by international carriers from
Philippines to abroad
Source Amount II. Transport of passengers by international carriers
Coal ₱7,440,000 from Philippines to abroad
III. Transport of cargoes by domestic carriers from
Fossil Fuel 4,860,000
Philippines to abroad
Hydroelectric 5,960,000
Wind 6,330,000 a. I only c. I and II only
Total ₱24,590,000 b. II only d. I, II, and III.
How much is Lakas Tama’s zero-rated sales? 38. Input VAT from sale of services may be claimed:
a. 5,960,000 a. Upon perfection of sale
b. 6,330,000 b. Upon consummation of sale
c. 12,290,000 c. Upon rendering of services
d. 24,590,000 d. Upon payment
Hydro 5,960 + Wind 6,330 = 12,290 Input VAT (upon payment) / Output VAT (upon
Coal & fossil fuel = VATable collection)
Mining/Oil & Gas Company (Production of coal/oil/gas) = 39. Which of the following purchase of vehicles may give rise to
VAT exempt under the Coal Operating Contract/Service input tax credit?
Contract (PD 87– oil/gas development act of 1972; PD 972 I. Purchase of a delivery truck amounting to
– coal development act of 1976) ₱1,800,000
II. Purchase of a car for top management amounting to
Example: PNOC EC (Seller) to Powerplant (Buyer) = VAT Exempt ₱2,600,000
Powerplant/Generation companies (Seller) to Customers = VATable III. Purchase of a car by those proprietor for his own
personal use, ₱2,000,000
Renewable Energy (Solar, hydro, wind, geothermal, biogas) =
electricity generated = VAT zero-rated
a. I only c. I and II only
RA 9513 – Renewable Energy Act of 2008
b. II only d. I, II, and III
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57. If a person who is a non-VAT-registered issues an invoice or 66. Which of the following is subject to VAT?
receipt showing his TIN, followed by the word "VAT", what is a. Export sales by persons who are not VAT-registered
the extent of his tax liability to the said transaction? b. Export sales by VAT-registered persons
I. Other applicable percentage taxes c. Either A or B
II. Output VAT due on the transaction without the benefit d. Neither A nor B
of input tax credit
III. 50% surcharge 67. Which rendition of services is not subject to VAT?
a. Transportation services by domestic common carries by
a. I and III only c. II and III only air relative to cargoes from one place to in the
b. I and II only d. I, II and III Philippines to another place in the Philippines
b. Transportation services by domestic common carries by
58. In which of the following creditable input VAT is payment of
sea relative to passengers from one place to in the
the input VAT not necessary for the crediting of input VAT?
Philippines to another place in the Philippines
a. Transitional input VAT c. Either A or B
c. Transportation services by domestic common carries by
b. Presumptive input VAT d. Neither A nor B
land relative to cargoes from one place to in the
59. Which of the following persons is not liable to pay Output Philippines to another place in the Philippines
VAT? d. Transportation services by domestic common
a. Those who are VAT-registered taxpayers. carries by land relative to passengers from one
b. Importers of goods not in the ordinary course of place to in the Philippines to another place in the
business. Philippines
c. Franchise grantees of radio/and or TV broadcasting
whose gross annual receipts do not exceed 68. Which of the following sales of electricity is subject to VAT?
P10,000,000 a. Sale of power or fuel generated thru renewable sources
d. Those engaged in the selling or leasing of goods, of energy
property or services whose gross sales or gross b. Sale of electricity by MERALCO
receipts during the year or in any 12-month period c. Both A and B
exceeds P3,000,000 d. Neither A nor B
60. Sale of which of the following items is subject to 12% Output 69. Which of the following is subject to VAT?
VAT? a. Insurance commissions in a non-life insurance policy
a. Sale of roasted chicken c. Sale of bagasse b. Insurance commissions in a life insurance policy
b. Sale of corn grits d. Sale of salted egg c. Both A and B
d. Neither A nor B
61. Importation of which of the following items is subject to 12%
Output VAT? 70. Which of the following is a characteristic of a value added
a. Importation of fertilizers tax?
b. Importation of feeds for aquarium fish a. Indirect tax c. Local tax
c. Importation of seeds, seedlings and fingerlings b. Property tax d. Specific tax
d. Importation of poultry feeds
71. Which of the following products will not allow the
62. Which of the following rendition of services is subject to 12% manufacturer to claim presumptive input VAT?
Output VAT? a. Sardines c. Milk
a. Laboratory services made by medical clinic to patients b. Cooking oil d. Coffee
b. Dental services by Dental clinic to patients
c. Check-up services by Pediatrician to patients 72. What is the period given by law to BIR Commissioner to
decide on VAT Refund under Enhanced VAT Refund
d. Accommodation services by hospital to patients
system?
a. Within 120 days from the filing of VAT Refund
63. Which of the following shall be considered transactions
Application
deemed sale to be subjected to 12% Output VAT?
a. Change in the control of a corporation b. Within 90 days from the filing of VAT Refund
b. Change in the trade or corporate name of a business Application
c. Either A or B c. Within 30 days from the filing of VAT Refund
d. Neither A nor B Application
d. Within 60 days from the filing of VAT Refund
64. Which importation by an OFW is subject to 12% VAT? Application
a. Importation of professional instruments and implements
b. Importation of vehicle 73. What is the amount of transitional input VAT?
c. Importation of tools of trade, occupation or employment a. 8% of beginning inventory of goods, materials and
d. Importation of wearing apparel supplies or the actual value-added tax paid on such
goods, materials and supplies, whichever is higher
65. Which of the following sale is subject to 12% VAT? b. 4% of beginning inventory of goods, materials and
a. Sale, importation, printing, or publication of books and supplies or the actual value-added tax paid on such
any newspaper, magazine, review, or bulletin which goods, materials and supplies, whichever is higher
appears at regular interval with fixed prices for c. 2% of beginning inventory of goods, materials and
subscription and sale, and which is devoted principally supplies or the actual value-added tax paid on such
to the publication of paid advertisements. goods, materials and supplies, whichever is higher
b. Sale of books, newspapers, magazines in electronic d. 6% of beginning inventory of goods, materials and
format. supplies or the actual value-added tax paid on such
c. Either A or B goods, materials and supplies, whichever is higher
d. Neither A nor B
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74. Which of the following transactions does not entitle the The schedule of payments is broken down below:
businessman to claim tax credit in Input VAT? January 1, 2021 4,000,000
a. Zero-rated VAT-subject transaction June 1, 2021 4,000,000
b. 12% VAT-subject transaction January 1, 2022 4,000,000
c. Transaction subject to OPT (other percentage January 1, 2023 4,000,000
taxes) January 1, 2024 4,000,000
d. None of the above TOTAL 20,000,000
75. Which of the following sale is exempted from output VAT? 80. How much is the output VAT to be recognized on January 1,
a. Sale of commercial lot at a price of P1,000,000 2021?
b. Sale of industrial lot at a price of P500,000 a. 0 c. 1,200,000
c. Sale of residential lot at a price P1,500,000 b. 480,000 d. 2,400,000
d. None of the above The company, being a non-real estate dealer, rule on
installments sales do not apply. Thus, entire 20M is subject to
76. What is the quantitative threshold for monthly rental of VAT on January 1, 2021 (date of sale).
residential unit to be exempted from output VAT?
a. not exceeding P12,000 per month 81. How much is the output VAT to be recognized on January 1,
2022?
b. not exceeding P15,000 per month
a. 0 c. 1,200,000
c. not exceeding P20,000 per month
b. 480,000 d. 2,400,000
d. not exceeding P10,000 per month
82. Assuming Interpretativa Company is a real estate dealer,
Items 77 to 79 are based on the following information:
how much is the output VAT to be recognized on January 1,
Namjoon is engaged in the manufacture and sale of butter
2021?
pancakes. Namjoon purchased P2,500,000 worth of raw
a. 0 c. 960,000
materials, VAT-exclusive, from VAT-registered local suppliers.
b. 480,000 d. 2,400,000
During the taxable year 2021, it was able to generate export
Jan 1 payment 4M + June 1 payment 4M = 8M / 20M = 40%
sales of P2,000,000, and domestic sales of P2,500,000 for its
Under the Installment sales, initial payments should not exceed
pancakes.
25%. Since initial payments exceeded 25%, the entire output
VAT is recognized at the time of sale.
77. Is Namjoon required to be a VAT-registered taxpayer?
a. Yes, because his sales breached the P3,000,000
Items 83 to 84 are based on the following information:
threshold.
Boar Brand Corporation is a domestic corporation engaged in
b. Yes, because his VAT-subject sales breached the the manufacturing of milk products. Boar Brand had the following
P3,000,000 threshold. transactions for the quarter:
c. No, because his sales have not breached the
P3,000,000 threshold. VAT Exclusive
d. No, because an exporter need not be a VAT-registered amounts
taxpayer. Sold milk to retailers 48,000,000
Disposed a milk evaporator machine 10,000,000
78. Assuming Namjoon is not required to be a VAT-registered (Cost is P50,000,000, proceeds are
taxpayer and remains to be a non-VAT registered taxpayer, P60,000,000)
which of the following statements is true? Distributed milk to its shareholders as 14,000,000
I. Namjoon is liable for percentage tax under Section part of their property dividends
116 (3%, temporarily 1% under CREATE Act) Transferred a milking machine to a 8,000,000
II. Namjoon is liable to pay value-added taxes. creditor as payment of debt
III. Namjoon cannot claim input tax credit from his
purchases. 83. How much is output VAT for the taxable quarter?
a. I and III only c. I and Il only a. 5,760,000 c. 14,400,000
b. II and III only d. I, II, and III. b. 9,600,000 d. 15,600,000
Items 85 to 86 are based on the following information: Route Amount VATABLE ZERO-
Intelligent Solutions, Inc., sells its computers on a consignment (12%) RATED
basis. This quarter, it had the following sales: Manila to Cebu 2,300,000 2,300,000 276,000
89. How much is Philippine Airlines' common carriers tax? 94. Compute for the output VAT of BACS.
a. 0 c. 1,070,100 a. 0 c. 894,000
b. 724,500 d. 1,388,400 b. 688,800 d. 1,582,800
7,450,000 x 12% = 894,000
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95. If BACS is a non-stock non-profit educational institution, how Items 98 to 100 are based on the following information:
much is BACS' output VAT? Ralph is the sole proprietor of a VAT-registered t-shirt printing
a. 0 c. 894,000 business. During the taxable month of September 2018, he
b. 688,800 d. 1,582,800 made the following transactions: