VAT Reviewer (Valencia)

13/07/2016

True or False (P9-1)

1. A value-added tax is a form of consumption tax.
2. In all cases, the buyer could not be legally liable for the payment of
VAT.
3. If a VAT-registered seller does not shift the burden of VAT to the
buyer, he is still legally liable for the payment of VAT.
4. VAT system curves tax evasion and fraud.
5. All sales of goods and services are subject to VAT.
6. Goods or services sold outside the Philippines are subject to 12%
VAT.
7. The VAT is an indirect tax and specific tax.
8. VAT is basically a tax on gross margin.
9. A zero-rated VAT transaction is VAT-exempt.
10.
The rate of presumptive input VAT is 7%
11.
The amount of VAT should be indicated as a separate amount
from the sales price.
12.
A VAT sales invoice includes the amount if VAT in the sales
price.
13.
The gross selling price excludes the excise tax as the taxable
base in determining the amount of VAT.
14.
Trade discounts are excluded as VAT taxable base.
15.
In determining the VAT taxable base, performance sales
discount is deductible from sales price if granted at the time of sale.
(P9-2)
1. Sales returns and allowances are allowed to be deducted in
determining the VAT taxable base.
2. A person who expects to have a gross sales of P1,500,000 in a year
should register as VAT.
3. A VAT-registered person is subject to 3% business tax if his annual
sales do not exceed P1,919,500.
4. A non-VAT person who is required to pay VAT is allowed to deduct
input VAT.
5. Franchise grantees of radio and television broadcasting are
generally subject to VAT if the amount of their annual gross receipts
exceed P1,919,500.
6. Importation of goods to be used for personal consumption is not
subject to VAT.
7. For VAT purposes, separate business of spouses shall be treated as
one taxable entity.
8. PAGCOR is exempt from VAT.

9. VAT-exempt persons are exempt to pay input VAT on their

purchases from VAT-registered suppliers.
10.
Subsistence livelihood income earners are exempt from VAT
but subject to OPT.
11.
Inventors are subject to VAT.
12.
A consular agent is not subject to VAT on their purchases from
VAT-registered person.
13.
In general, non-taxable entities are VAT-exempt.
14.
VAT-registered person should not shift VAT on their sales to
ECOZON enterprises.
15.
All government owned and controlled corporations are exempt
from VAT.
Identification (P9-3)
1. VAT is imposed only in the country where the goods or services are
consumed. This principle would refer to __________.
2. This kind of tax is imposed due to opportunity given to engage on
sale, exchange, or barter of goods and services.
3. (T/F) The taxable base of 12% for the sales of goods is the gross
selling price.
(T/F) Gross selling price includes excise tax, if any.
4. (T/F) Importations of goods are subject to VAT, but export sales are
exempt from 12% VAT.
(T/F) VAT is an additional tax imposed on goods or services for the
consumption privilege.
5. VAT rate which can be used for output and input VAT.
6. (T/F) VAT is designed to be borne by the consumers.
(T/F) VAT system establishes audit trail.
7. The gross margin is include in the determination of VAT.
The standard input VAT allowed to sale of goods or services to the
government is 12%.
8. If the VAT invoice amount does not indicate separately the VAT, the
sale is not covered by VAT.
The amount of VAT is determined by dividing the VAT sales invoice by
9.333.
9. The creditable input VAT can only be sourced from purchases of
goods and services from VAT-registered supplier.
Sales discounts due to prompt payments are deductible from gross
sales to determine the VAT taxable base.
10.
A VAT-exempt person should register under VAT system within
30 days from the end of the last month when his sales exceeds
P1,919,500.
In general, a VAT-registered person is subject to VAT regardless of the
amount of his gross annual sales or gross receipts.
(p9-4)

1. Which of the following is not a cha1