Law

PART 5
VALUE-ADDED TAX(Notes)
Value-added tax is a uniform tax imposed on person, who in the course of
trade or business sells, barters, exchanges or leases goods or properties or
renders services, and on any person who imports goods.
Who are liable?
Any individual, trust, estate, partnership, corporation, joint venture, cooperative
or association who in the course of his trade or business:
Sells, barters, exchanges goods or properties
2. Sells or renders services
3. Leases properties
4. Imports goods
1.
Nature and characteristics
VAT is a tax on consumption levied on the sale, barter, exchange or lease of
goods or properties and services in the Philippines and on importation of goods
into the Philippines. The seller is the one statutorily liable for the payment of the
tax but the amount of the tax may be shifted or passed on to the buyer, transferee
or lessee of the goods, properties or services.
Réforms effected by VAT
1. Simplification of the business tax system.
2. Improvement of equity,
3. Enhancement of efficiency in tax administration.
You sent Today at 10:24 AM
390
CPA REVIEWER IN TAXATION -- Ampongan
1.
Business taxes abolished by the introduction of VAT
Advance sales tax
2. Compensating tax
3
Sales tax on the original sales
4. Subsequent sales tax
5.
Contractor's tax
6. Brokers' tax
7.
Miller's tax
8. Tax on cinematographic film owners, lessors and distributors
9. Excise taxes on matches, solvents and video tapes
10. Tax on hotel and motel
Tax on lending investors
12. Tax on dealers in securities
13.
Caterer's tax
14.
Tax on insurance premiums on non-life insurance companies (except crop
insurance)
15. Franchise tax (except on radio and television broadcasting companies
whose annual gross receipts do not exceed P10,000,000, gas and water
utilities).
11.
Exempt transactions
a. Sale or importation of agricultural and marine food products in their original
state, livestock and poultry of a kind generally used as, or yielding or
producing foods for human consumption, and breeding stock and genetic
materials therefor.
Products classified under this paragraph shall be considered in their original
state even if they have undergone the simple processes of preparation or
preservation for the market, such as freezing, drying, salting, broiling,
roasting, smoking or stripping. Polished and/or husked rice, corn grits, raw
cane sugar and molasses, and ordinary salt shall be considered in their
original state;
b. Sale or importation of fertilizers; seeds, seedlings and fingerlings; fish, prawn,
livestock and poultry feeds, including ingredients, whether locally produced
or imported, used in the manufacture of finished feeds (except specialty feeds
for race horses, fighting cocks, aquarium fish, zoo animals and other animals
generally considered as pets);
c. Importation of personal and household effects belonging to the residents of
the Philippines returning from abroad and nonresident citizens coming to
resettle in the Philippines: Provided, That such goods are exempt from
customs duties under the Tariff and Customs Code of the Philippines;
391
VALUE-ADDED TAX - Notes
d. Importation of professional instruments and implements, wearing apparel,
domestic animals, and personal household effects (except any vehicle, vessel,
aircraft, machinery, other goods for use in the manufacture of merchandise
of any kind in commercial quantity) belonging to persons coming to settle in
the Philippines, for their own use and not for sale, barter or exchange,
accompanying such persons, or arriving within ninety (90) days before or
after their arrival, upon the production of evidence satisfactory to the
Commissioner, that such persons are actually coming to settle in the
Philippines and that the change of residence is bona fide;
Services subject to percentage tax under Title V;
f. Services by agricultural contract growers and milling for others of palay into
rice, corn into corn grits and sugar cane into raw cane sugar,
g. Medical, dental, hospital and veterinary services except those rendered by
professionals;
h. Educational services rendered by private educational institutions; duly
accredited by the Department of Education, Culture and Sports (DECS) and
the Commission on Higher Education (CHED), the Technical Education and
Skills Development Authority (TESDA) and those rendered by the

government educational institutions;
i. Services rendered by individuals pursuant to an employer-employee
relationship;
j. Services rendered by regional or area headquarters established in the
Philippines by multinational corporations which act as supervisory,
communications and coordinating centers for their affiliates, subsidiaries or
branches in the Asia-Pacific Region and do not earn or derive income from
the Philippines;
k. Transactions which are exempt under international agreements to which the
Philippines is a signatory or under special laws, except those under P.D. No.
529;
1. Sales by agricultural cooperatives duly registered with the Cooperative
Development Authority to their members as well as sale of their produce,
whether in its original state or processed form, to non-members (if the
producer of the agricultural products sold is the cooperative itself); their
importation of direct farm inputs
, machineries and equipment, including
spare parts thereof, to be used directly and exclusively in the production
and/or processing of their produce;
m. Gross receipts from lending activities by credit or multi-purpose
cooperatives duly registered with the Cooperative Development Authority;
r.
CPA REVIEWER IN TAXATION - Amma
392
n. Sales hy non-agricultural, 'non-electric and non-credit cooperatives dul,
registered with the Cooperative Development Authority. Provided, that is
share in capital contribution
of each member does not exceed P15.000 and
regardless of the aggregate capital and net surplus ratably distributed among
the members;
0. Export sales by persons who are not VAT-registered;
p. Sale of real properties not primarily held for sale to customers or held for
lease in the ordinary course of trade or business, or real property utilized box
low-cost and socialized housing as defined by Republic Act No. 7279
otherwise known as the Urban Development and Housing Act of 1992, and
other related laws, residential lot valued at P1,919,500 and below, house and
lot, and other residential dwellings valued at P3,199,200 and below.
q. Lease of residential unit with a monthly rental not exceeding P12,800.
Sale, importation, printing or publication of books and any newspaper,
magazine, review or bulletin which appears at regular intervals with fixed
prices for subscription and sale and which is not devoted principally to the
publication of paid advertisements;
Sale, importation or lease of passenger or cargo vessels and aircraft,
including engine, equipment and spare parts thereof for domestic ar
international transport operations;
t. Importation of fuel, goods and supplies by persons engaged in international
shipping or air transport operations;
Services of banks, non-bank financial intermediaries performing quasi-
banking functions, and other non-bank financial intermediaries, such as
money changers and pawnshops; and
Sale or lease of goods or properties or the performance of services other than
the transactions mentioned in the preceding paragraphs, the gross annual
sales and/or receipts do not exceed the amount of P1,919,500.
For purposes of the threshold of P1,919,500, the husband and the wife shall
be considered as separate taxpayers. However, the aggregation rule for each
taxpayer shall apply, for instance, if a professional, aside from the practice of
his profession, also derives revenue from other lines of business which are
otherwise subject to VAT, the same shall be combined for purposes of
determining whether the threshold has been exceeded. Thus, the VAT
exempt sale shall not be included in determining the threshold.
A VAT registered person may elect that the above exemptions not apply to his
sale of goods or properties or services: Once the election is made, it shall be
irrevocable for a period of three (3) years counted from the quarter when the
s.
u.
V.
an
aly
ng
er
393
election was made except for franchise grantees of radio and TV broadcasting
whose annual gross receipts for the preceding year do not exceed P10,000,000
where the option becomes perpetually irrevocable.
Tax rate and tax base
Rate: 12%
Base: Gross Selling price - sale of goods
Gross receipts sale of services
Total landed cost-importation
Definitions:
1. VAT PAYABLE - the excess of the output tax over the allowable input tax. In
the case of importation, it is the VAT due on such importation.
2. OUTPUT TAX - VAT due on the sale of taxable goods or services by any
registered or required to register under the NIRC. It is also known as
OUTPUT VAT.
3. INPUT TAX - VAT paid by a VAT registered person in the course of his trade
or business on importation of goods or local purchases of goods or services
from a VAT registered person. It is also known as INPUT VAT.
VAT on sale of goods or properties
Rate and Base: 12% of Gross Selling Price

Gross selling price - the total amount of money or its equivalent which the
purchaser pays or is obligated to pay to the seller in consideration of the sale,
barter, or exchange, excluding the value-added tax. The excise tax, if any, on
such goods, shäll form part of the gross selling price.
Deductions from Gross Selling price (the GSP shall be understood to mean "net
sales')
1. Sales discounts indicated in the invoice the granting of which does not depend
upon the happening of a future event.
2. Sales returns when a refund or credit memorandum is issued.
Transactions deemed sale
1.. Transfer use or consumption not in the course of business of goods or
properties originally intended for sale or for use in the course of business.
2. Distribution or transfer to
a. Shareholders or investors as share in the profits of the VAT registered
person
CPA REVIEWER IN TAXATION - Ambongan
3. Consignment of goods if actual sale is not made within 60 days following the
394
b. Creditors in payment of debt or obligation.
4.
date such goods were consigned. Those returned within the 60-day pering
are not deemed sold,
Retirement from or cessation of business with respect to all goods on hand
whether capital goods, stock in trade, supplies or materials as of the date of
such retirement or cessation, whether or not the business is continued by the
new owner or successor, to wit:
a. Change of ownership of business.
b. Dissolution of a business partnership and creation of a new one which
takes over the business.
For transactions deemed, sale, the output tax shall be based on the market value
of goods deemed sold at the time of the occurrence of the transactions, unless the
gross selling price is unreasonably lower than the fair market value, in which
case the actual market value shall be the tax base.
In the ease of retirement or cessation of business, the tax base shall be the
acquisition cost or the current market price, whichever is lower.
Transitional input tax
A person who becomes liable to VAT or any person who elects to be a VAT-
registered person shall be allowed input tax on his beginning inventory of goods,
materials and supplies, equivalent to 2% of the value of such inventory, or the
actual VAT paid on such goods, materials and supplies, whichever is higher,
which shall be creditable against the output tax.
Presumptive input tax
VAT registered persons or firms engaged in the processing of sardines, mackerel,
and milk, and in manufacturing refined sugar, cooking oil and packed noodle-
based instant meals, shall be allowed a presumptive input tax, creditable against
the output tax, equivalent to 4% of the gross value in money of their purchases
of primary agricultural products which are used as inputs to their production.
The term 'processing shall mean pasteurization, canning and activities which
through physical or chemical process alter the exterior texture or form or inner
substance of a product in such manner as to prepare it for special use to which it
could not have been put in its original form or condition.
Zero-rated sales
A zero-rated sale by a VAT-registered person, which is a taxable transaction for
VAT purposes shall not result in any output tax. However, any input tax
395
attributable to zero-rated sales by a VAT-registered person may, at his option, be
refunded or applied for a tax credit certificate which may be used in the payment
of internal revenue taxes, subject to the limitations as may be provided for by
law, as well as other implementing rules.

A. Zero-rated transactions (0%) vs. Exempt transactions (E)
0% subject to VAT only that the rate is 0%.
- not subject to VAT
2. 0% - no output tax but the taxpayer is entitled to tax credit or refund of
input taxes.
- no tax credit or refund for input taxes are allowed.
a.
C.
B. Sales by VAT registered persons subject to 0%:
1. Export sales which shall mean:
The sale or actual shipment of goods from Philippines to foreign
country and paid for in acceptable foreign currency or its equivalent
in goods or services, and accounted for in accordance with the rules
and regulations of the Bangko Sentral ng Pilipinas;
b. Sale of raw materials or packaging to a non-resident buyer for
delivery to a resident local export-oriented enterprise to be used in
manufacturing, processing, packing or repacking in the Philippines
of the said buyer's goods and paid for in acceptable foreign currency
and accounted for in accordance with the rules and regulations of
the Bangko Sentral ng Pilipinas;
Sale of raw materials or packaging materials to an export-oriented
enterprise whose export sales exceed 70% of total annual
production
d. Sale of gold to the Bangko Sentral ng Pilipinas;
Those considered export sales under Executive Order No. 226,
otherwise known as the Omnibus Investment Code of 1987, and
other special laws.
2. Foreign currency denominated sales which means sales to nonresidents
of goods (except automobiles and non-essential goods subject to excise
taxes) assembled or manufactured in the Philippines, for delivery to

residents in the Philippines, and paid for in acceptable foreign currency
and accounted for in accordance with the rules and regulations of the
Bangko Sentral ng Pilipinas.
e.
CPA REYIEWER IN TAXATION - Ampang
396
3. Sales to persons or entities deemed tax exempt under special law
international agreement to which the Philippines is a signatory much
Asian Development Bank, International Rice Research Institute, etc.
1.
Tax credits
An input tax evidenced by a VAT invoice or official receipt issued by a VAT.
registered person, on the following transactions, shall be creditable against the
output tax.
VAT actually paid in the course of trade or business on the purchase
importation of goods:
a. For sale; or
b. For conversion into or intended to form part of a finished product for
sale, including packaging materials; or
e. For use as supplies in the course of business; or
d. For use as raw materials supplied in the sale of services; or
e. For use in trade or business for which deduction for depreciation of
amortization is allowed.
f. VAT actually paid on purchase or real properties;
g. VAT actually paid on purchase of services
h. Transactions deemed sale
i. Transitional input tax
j. Presumptive input tax
VAT on sale of services or lease of properties
A. Gross receipts means cash or its equivalent actually received or constructively

received (excluding the VAT) as:
a Payments on the contract price, compensation, service fee, rental or
royalty;
b. Payments for materials supplied with the services;
c. Deposits or advanced payments on the contract for services.
It does not include amounts earmarked for payment to unrelated 3rd party or
received as reimbursement for advance payment on behalf of another which
do not redound to the benefit of the payor.
B. Sale or exchange of services means the performance of all kinds of services in
the Philippines for others for a fee, remuneration or consideration, including
those performed or rendered by the following:
1. Construction and service contractors;
2. Stock, real estate, commercial, customs and immigration brokers;
or
397
3. Lessors of property, whether real or personal;
4. Warehousing services;
5. Lessors or distributors of cinematographic films;
6. Persons engaged in milling processing, manufacturing or repacking
goods for others except:
a. Palay into rice
D. Corn into corngrits
c. Sugar cane into raw cane sugar
7. Proprietors, operators or keepers of hotels, motels, resthouses, pension
houses, inns, resorts, theatres or moviehouses;
8. Dealers in securities
9. Lending investors
10. Proprietors or operators of restaurants, refreshment parlors, cafes and

other eating places, including clubs and caterers.
11. Transportation contractors on their transport of goods or cargoes,
including persons who transport goods or cargoes for hire and other
domestic common carriers by land relative to their transport of goods or
services;
Common carriers by air and sea relative to their transport of passengers,
goods or cargoes from one place in the Philippines to another place in the
Philippines
13. Sales of electricity by generation, transmission and/or distribution
companies;
14. Franchise grantees of electric utilities, telephone and telegraph, radio
and/or television broadcasting and all other franchise grantees except
franchise grantees of radio and/or television broadcasting companies
whose annual gross receipts of the preceding year do not exceed
P10,000,000 and franchise grantees of gas and water utilities;
15. Non-life insurance companies (except crop insurances), including surety,
fidelity, indemnity and bonding companies, and
16. Similar services, regardless of whether or not the performance thereof
calls for the exercise or use of the physical or mental faculties.
12.
C. Zero-rated sale of services
The following services performed in the Philippines shall be subject to 0%
1 Processing, manufacturing or repacking goods-
398
a. For other persons doing business outside the Philippines
b. The goods are subsequently exported; and
c. The services are paid for in acceptable foreign currency and
accounted for in accordance with the rules and regulations of the

2. Services other than (1) above rendered to a person engaged in business
conducted outside the Philippines when the services are performed, the
consideration for which is paid for in acceptable foreign currency and
accounted for in accordance with the rules and regulations of the Bangko
Sentral ng Pilipinas;
3 Services rendered to persons or entities whose exemption under special
laws or international agreements to which the Philippines is a signatory
effectively subjects the supply of such services to 0%;
4. Services rendered to persons engaged exclusively in international
shipping or international air transport operations, including leases of
property for use thereof;
5. Services performed by, subcontractors and/or contractors in processing,
converting, or manufacturing goods for an enterprise whose export sales
exceed 70% of total annual production;
6. Transport of passengers and cargo by domestic air carrier or sea vessels
from the Philippines to a foreign country; and
7. Sale of power or fuel generated through renewable sources of energy
such as, but not limited to, biomass, solar, wind, hydropower,
geothermal, ocean energy, and other emerging energy sources using
technologies such as fuel cells and hydrogen fuels.
VAT on importation
Subject: Goods and properties whether the importation is
a. Por sale, or
b. For use in business, or
For personal use.
Tax Rate: 12%
Tax Base: Total value used by the Bureau of Customs in determining Tariff and
Customs Duties, plus customs duties, excise taxes, if any, and other
charges (such as postage, commissions, etc.) prior to the release of
the goods from customs custody.
C.
398
a. For other persons doing business outside the Philippines
b. The goods are subsequently exported; and
c. The services are paid for in acceptable foreign currency and
accounted for in accordance with the rules and regulations of the
2. Services other than (1) above rendered to a person engaged in business
conducted outside the Philippines when the services are performed, the
consideration for which is paid for in acceptable foreign currency and
accounted for in accordance with the rules and regulations of the Bangko
Sentral ng Pilipinas;
3 Services rendered to persons or entities whose exemption under special
laws or international agreements to which the Philippines is a signatory
effectively subjects the supply of such services to 0%;
4. Services rendered to persons engaged exclusively in international
shipping or international air transport operations, including leases of
property for use thereof;
5. Services performed by, subcontractors and/or contractors in processing,
converting, or manufacturing goods for an enterprise whose export sales
exceed 70% of total annual production;
6. Transport of passengers and cargo by domestic air carrier or sea vessels
from the Philippines to a foreign country; and
7. Sale of power or fuel generated through renewable sources of energy
such as, but not limited to, biomass, solar, wind, hydropower,
geothermal, ocean energy, and other emerging energy sources using
technologies such as fuel cells and hydrogen fuels.
VAT on importation
Subject: Goods and properties whether the importation is
a. Por sale, or
b. For use in business, or
For personal use.
Tax Rate: 12%
Tax Base: Total value used by the Bureau of Customs in determining Tariff and
Customs Duties, plus customs duties, excise taxes, if any, and other
charges (such as postage, commissions, etc.) prior to the release of
the goods from customs custody.
C.
CPA REVIEWER IN TAXATION - Ampone
400
or quarter when the sale or transfer was made subject to excess input to
during the quarter.
4 The aggregate acquisition cost in any calendar month refers to the total price
(excluding the VAT) agreed upon for one or more assets acquired and not on
the payments actually made during the month.
5. The option to apply for refund/tax credit certificate of capital goods has been
withdrawn.
Allocation of input taxes
A VAT-registered person who is also engaged in transactions not subject to VAT
shall be allowed to recognize input tax credits on transactions subject to VAT as
follows:
1. All the input taxes that can be directly attributed to transactions subject to
VAT may be recognized for input tax credit; Provided, that those that can be
directly attributable to VAT taxable sales of goods and services to the
Government or any of its political subdivisions, instrumentalities or agencies,
including GOCCs shall not be credited against output taxes arising from sales
to non-Government entities; and
2. Input taxes that cannot be directly attributed to either a VAT taxable or VAT-
exempt transaction, shall be pro-rated to the VAT taxable and VAT exempt
transactions and only the ratable portion pertaining to transactions subject to

VAT may be recognized for input tax credit.
Filing of return and payment of tax
1. Time for filing and payment:
a. Monthly VAT declaration -
Mariual - Within 20 days after the end of each month.
EFPS Within 25 days after the end of each month.
b. Quarterly Return - Within 25 days after the end of the quarter.
2. Place of filing and payment - Any authorized bank where the Revenue
District Officer is located.
3. Quarterly return. - Amounts reflected in the monthly VAT declarations for
the first two (2) months of the quarter shall still be included in the quarterly
VAT return which reflects the cumulative figures for the taxable quarter
Payments in the monthly VAT declarations shall, however, be credited in the
quarterly VAT return to arrive at the net VAT payable or excess input
tax/over-payment as of the end of a quarter.
4. VAT
Payable (excess Output) or Excess Input Tax
401
If at the end of any taxable quarter the output tax exceeds the input tax, the
excess shall be paid by the VAT registered person.
If the input tax inclusive of input tax carried over from the previous quarter
exceeds the output tax, the excess input tax shall be carried over to the
succeeding quarter or quarters.
5. Withholding of VAT
The government or any of its political subdivisions, instrumentalities or
agencies including GOCCs shall, before making payment on account of each
purchase of goods and/or services taxed at 12% VAT, deduct and withhold a
final VAT due of 5% of the gross payment thereof.
The 5% final VAT withholding rate shall represent the net VAT payable of the
seller. The remaining 7% effectively accounts for
the standard input VAT for
sales of goods or services to government or any of its political subdivisions
etc in lieu of the actual input VAT directly attributable or ratabi
apportioned to such sales.
Should actual input VAT attributable to sale to government exceeds 7% of
gross payments, the excess may form part of the sellers' expense or cost. On
the other hand, if actual input VAT attributable to sale to government is less
than 7% of gross payment, the difference must be closed to expense or cost.
Mandatory VAT registration
The following are required to register for VAT:
Any person whose gross sales or receipts for the past 12-months, other than
those that are exempt, have exceeded P1,919,500
2. There are reasonable grounds to believe that his gross sales or receipts for
the next 12 months, other than those that are exempt, will exceed
P1,919,500.
3 Franchise grantees of radio and/or television broadcasting, whose gross
annual receipts for the preceding calendar year exceeded Pio million shall
register within 30 days from the end of the taxable year.
Penalty for failure to register as VAT taxpayer
He shall be liable to pay the tax as if he was a VAT registered person, but he
cannot avail of the benefits of input tax credit for the period he was not property
registered
1.
Optional VAT registration for VAT exempt persons
Any person whose sale or lease of goods or properties or the performance of
services, other than the exempt transactions, the gross annual sales or receipts
CPA REVIEWER IN TAXATION - Ampongan
402
do not exceed P1,919,500 may, in relation to 4.109-2, elect to be VAT registered

by registering with the RDO that has jurisdiction over the head office of that
person, and pay the annual registration fee of P500 for every separate and
distinct establishment;
Once the election is made, it shall be irrevocable for a period of three (3) years
counted from the quarter when the election was made except for franchise
grantees of radio and TV broadcasting whose annual gross receipts for the
preceding year do not exceed P10,000,000 where the option becomes
perpetually irrevocable.
Registration of non-VAT or exempt taxpayers
Every person, other than those required to be registered as VAT persons,
engaged in any business, shall, on or before the commencement of his business,
ot whenever he transfer to another revenue district, register with the RDO
concerned within 10 days from the commencement of business or transfer and
shall pay the applicable registration fee of P500 for every separate or distinct
establishment or place of business, if he has not paid the registration fee in the
beginning of the taxable year.
1. VAT exempt persons under Section 109 of the Tax Code who did not opt to
register as VAT taxpayers.
2. Individuals engaged in business where the gross sales or receipts do not
exceed P100,000 during any 12-month period. They are required to register
but will not be made to pay the registration fee of P500.
3. Non-stock, non-profit organizations and associations engaged in trade or
business whose gross sales or receipts do not exceed P1,919,500 for any 12-
month period;
4. Cooperatives other than electric cooperatives. However, they are not required
to pay the registration fee imposed under these Regulations.
5. Radio and TV broadcasting whose gross annual receipts do not exceed Pro
million and which do not opt to be VAT registered.
6. PEZA and other ecozone registered enterprises enjoying the preferential tax
rate of 5% in lieu of all taxes.
7. SBMA and other free port zone-registered enterprises enjoying the
preferential tax rate of 5% in lieu of all taxes.
Date of Registration - On or before the 318 day of January of every year.
Annual Registration Fee - P500 for every separate or distinct establishment or
place of business, including facility types where sales transactions occur, before
the start of such business and every year thereafter.
PART 5
VALUE-ADDED TAX
(Multiple Choice Questions)
A. NATURE OF VAT &
EXEMPTIONS FROM VAT
A tax on business is (RPCPA)
А. Direct tax
B Indirect tax
C.
Property tax
None of the above
One of the following is not a major business internal revenue taxes in the Tax
Code (RPCPA)
A Value Added tax
Income tax
B. Excise tax
D Percentage tax
С
3. Value-added tax is a (an)
A Indirect tax
B Direct tax
Progressive tax
Regressive tax
PART 5
VALUE-ADDED TAX
(Multiple Choice Questions)
A. NATURE OF VAT &
EXEMPTIONS FROM VAT
A tax on business is (RPCPA)
А. Direct tax
B Indirect tax
C.
Property tax
None of the above
One of the following is not a major business internal revenue taxes in the Tax
Code (RPCPA)
A Value Added tax
Income tax
B. Excise tax
D Percentage tax
3. Value-added tax is a (an)
A Indirect tax
B Direct tax
Progressive tax
Regressive tax
san
VALUE ADDED TAX - Multiple Choice Questions.
405
Statement 1: For purposes of the threshold of P1,919,500, the husband and the
wife are considered as separate taxpayers.
Statement 2: The seller of goods or services is the one statutorily liable for the
payment of VAT but the amount of the tax may be shifted or passed on to the
buyer, transferee or lessee of the goods, properties or services,
Statement 1 Statement 2
Statement 1 Statement 2
A. True False
False False
B. False True
True
True
the
me
of
9. The following are the data of spouses Fidel and Alleen during the year.
Gross receipts
Fidel
Aileen
From business:
Restaurant
P1,350,000
Small department store
P1,220,000
Practice of profession as a CPA
254,300
Which of the following statements is correct?
A. For purposes of the threshold of P1,919,500 the gross receipts of Fidel
and Aileen shall be combined.
B. Aileen shall be subject to VAT even if she does not register voluntarily
under the VAT system.
C.
For purposes of the threshold of P1,919,500, the restaurant and the
practice of profession are considered as separate taxpayers.
D.
For purposes of the threshold of P1,919,500, the aggregation rule for each
taxpayer shall apply. Thus, the gross receipts from the restaurant shall be
added to the receipts from the practice of profession.
he
Dr
10. Which statement is correct? A bar review center owned and operated by
lawyers is: (BEQ)
A. Exempt from VAT, regardless of its gross receipts during the year because
it is an educational center
CPA REVIEWER IN TAXATION - Ampon
B. Exempt from VAT, provided that its annual gross receipts do not ex
P1,919,500.
C. Subject to VAT, regardless of its gross receipts during the year.
D. Subject to VAT, if it is duly accredited by TESDA.

406
11. Karen is a practicing certified public accountant. She is also a full time professis
of accounting at Sorsogon State College - Bulan Campus. In the preceding
year, her gross receipts from the practice of public accounting was P1,850.0m
while her total compensation income as college professor was P195,000
A. She is subject to value-added tex effective January 1 of the current year
B. She may be subject to VAT if she voluntarily registers under the VAT
system.
She is not required to pay either value-added added or any business tax.
D. She is required to pay Professional Tax but not business tax.
C.
AT
A professional who is practicing her profession is required to pay VAT if she
voluntarily registers under the VAT system even if her annual gross receipts
do not exceed the threshold of P1,919,500.
12. Except for one transaction, the rest are exempt from value added tax. Which
one is VAT taxable? (BEQ)
A Sales of chicken by a restaurant owner who did not register as a VAT
person and whose gross annual sales is P1.2 Million.
B. Sales of copra by a copra dealer to a coconut oil manufacturer who did not
register as a VAT person and whose gross annual sales is P5 Million.
C. Gross receipts of CPA during the year amounted to P1 Million; the CPA
registered as a VAT person in January 2015, before practicing his
profession.
D. Sales of a book store during the year amounted to P10 Million; it did not
register as a VAT person with the BIR.
13. Which statement is FALSE under the VAT law? (BEQ)
VALUE ADDED TAX - Multiple Choice Questions

407
A VAT-registered person will be subject to VAT for his taxable transactions
regardiess of his gross sales or receipts.
B A person engaged in trade or business selling taxable goods or services
must register as a VAT person, when his gross sales or receipts for the
year exceed P1,919,500.
C. A person who issued a VAT-registered invoice or receipt for a VAT-exempt
transaction is liable to the 12% VAT as a penalty for the wrong issuance
thereof.
D. Once a doctor of medicine exercises his profession during the year, he
needs to register, as a VAT person and to issue VAT receipts for
professional fees received
A practicing professional shall be required only to register under the VAT
system if his annual gross receipts exceed P1,919,500.
14. Three of the following are exempt from value-added tax. Which is the
exception?
A. Sales of medicines to in-patients of a hospital.
В. Services rendered by persons subject to percentage tax.
C. Receipts from leasing of real properties
D. Export sales by persons who are not value-added tax registered
The sales of medicines are subject to VAT. They are exempt if sold to in-
patients and included in the hospital bills because they would be considered
as part of the medical services.
15. Which of the following is not exempt from VAT?
А. importation in their original state of agricultural and marine food products;
B. Importation of passenger or cargo vessel of more than 5,000 tons to be
used by the importer himself as operator thereof;

С
Importation of personal and household effect belonging to residents of the
Philippines returning from abroad;
D.
Importation of non-food agricultural products in their original state by a
primary producer
407
A VAT-registered person will be subject to VAT for his taxable transactions
regardiess of his gross sales or receipts.
B A person engaged in trade or business selling taxable goods or services
must register as a VAT person, when his gross sales or receipts for the
year exceed P1,919,500.
C. A person who issued a VAT-registered invoice or receipt for a VAT-exempt
transaction is liable to the 12% VAT as a penalty for the wrong issuance
thereof.
D. Once a doctor of medicine exercises his profession during the year, he
needs to register, as a VAT person and to issue VAT receipts for
professional fees received
A practicing professional shall be required only to register under the VAT
system if his annual gross receipts exceed P1,919,500.
14. Three of the following are exempt from value-added tax. Which is the
exception?
A. Sales of medicines to in-patients of a hospital.
В. Services rendered by persons subject to percentage tax.
C. Receipts from leasing of real properties

D. Export sales by persons who are not value-added tax registered
The sales of medicines are subject to VAT. They are exempt if sold to in-
patients and included in the hospital bills because they would be considered
as part of the medical services.
15. Which of the following is not exempt from VAT?
А. importation in their original state of agricultural and marine food products;
B. Importation of passenger or cargo vessel of more than 5,000 tons to be
used by the importer himself as operator thereof;
Importation of personal and household effect belonging to residents of the
Philippines returning from abroad;
D.
Importation of non-food agricultural products in their original state by a
primary producer
VALUE ADDED TAX - Multiple Choice Questions 409
C Sale of vegetables by the QC vegetable dealer to a restaurant in Manila
D. Sale of vegetables by the restaurant operator to its customers
Sale or importation of agricultural food products are exempt from VAT
However, if the agricultural products are no longer in their original state and
the seller or importer is VAT registered, such sale or importation is already
subject to VAT.
19
Statement 1 A sale of timber to a lumberyard by an owner of a timberland 19
subject to value-added tax.
Statement 2: A sale of smoked fish by its producer is subject to value-added tax

if the seller-producer is earning an annual gross sales of more than P1.919,500
Statement 3: A sale of a goldfish by a petshop is subject to value-added tax,
while a sale of fresh tilapia in the market is exempt.
Statement 4: A sale of live chicken by an agricultural contract grower to
Magnolia Corporation (its supplier of feeds) is subject to value-added tax
Which of the following is the best answer?
A. Statement 1 is true.
Statements 2 and 4 are false.
С Statements 1 and 3 are true, while statements 2 and 4 are false
D Statements 1 and 3 are true.
Sale of non-food forest products is subject to VAT
A fish is still in its original state even if it had undergone the simple process of
smoking.
20 Statement 1: Both the sale of fresh eggs in the market and the sale of fried egg
in a restaurant are exempt from value-added tax
Statement 2: The sale of raw cane sugar is exempt from value-added tax while
the sale of refined sugar is taxable.
Statement 3: The sale of drugs by a hospital drugstore to in-patients is exempt
from value added tax, while the sale to an outpatient is taxable
Statement 4: Export sales are exempt from value-added tax regardless of
whether the exporters are VAT registered or not
410
VA
Which of the following options is wrong?
Statement 1 is false.
с. Statement 1 is true
Statements 2 and 3 are true. D Statements 1 and 4 are false
Export sales by non-VAT registered persons are exempt from VAT, while
export sales by VAT registered are zero rated.
21.
22
A lessor of real property is exempt from value added tax in one of the
transactions below. Which one is it? (BEQ)
A Lessor leases commercial stalls located in the Greenhills Commercial
Center to VAT-registered sellers of cell phones, lessor's gross rental during
the year amounted to P12 Million
В. Lessor leases residential apartment units to individual tenants for
P10,000.00 per month per unit; his gross rental income during the year
amounted to P2 Million
C. Lessor leases commerciai stalls at P10,000.00 per stall per month and
residential units at P15,000.00 per unit per month; his gross rental income
during the year amounted to P3 Million.
D. Lessor leases two (2) residential houses and lots at P50,000.00 per month
per unit, but he registered as a VAT person.
For a lessor to be subject to VAT, the lease of each residential unit must
exceed P12,800 and the aggregate annual receipts must exceed P1,919,500.
22. One of the following transactions by a VAT registered person does not result to
output VAT
A. Cash sales
C. Sales and leaseback
B. Sales on account
D Export sales
Export sales are subject to VAT. However, the tax rate is zero. Hence, the
sales do not result to output tax.
BLUE ADDED TAX - Multiple Choice Questions
411
B. COMPUTATION OF
VAT PAYABLE
03 Satement 1: The account title "VAT payable" refers only to the excess of
Output Tax over the Input Tax
Saarent 2: In value-added tax, although the seller-businessman is the one
statutorily liable to pay he does not shoulder the burden of the tax
Statement 3: Zero rated transactions are exempt transactions because it
soes not result to output tax
Suatement 4: There may be an export sale although there is no sale or
shipment of the goods from the Philippines to other countries.
Which of the following options is correct?
Statements 2 and 4 are true.
B Statements 1 and 2 are false.
Statements 3 and 4 are true
Statement 4 is false.
Importation of goods may result to VAT payable without applying the formula:
Output tax less input tax.
Zero rated transactions are subject to VAT.
Export sales are not only products of exportation.
24 Tsutsuwap Company, a VAT-registered business, had the following data during
the quarter
Export sales
P 1,900,000
Domestic sales (tax included)
1.232.000
Purchases of goods for export and domestic sales

888,500
Purchases of supplies for export and domestic sales
124,850
Assuming that the input taxes paid on purchases of goods for export are
blamed as tax credit, the VAT payable by Tsukuba Company is -
CPA REVIEWER IN TAXATION - AMD
412
P12,895
10.398
P 177,895
84,895
132.000
P132,000
Output tax:
Export sales (1,900,000 x 0%)
Domestic sales (1,232,000 x 3/28)
Less: Input taxes on purchases of -
Goods for export (888,500 x 12%)
Supplies (124,850 x 12%)
VAT payable
106,620
14.982
121.602
10,398
25.
In Question 24, assuming that the input taxes attributable to export sales are
being claimed as refund, the amount refundable is
A. P72,000
C P 77,015
B.
D.
Zero
12,895
Refundable (1,900,000/3,000,000 x 121,602)
Export sales
Domestic sales (1,232,000/112%)
Total sales
Z7015
1,900,000
1,100,000
3,000,000
26. Joey, a non-VAT taxpayer, purchased merchandise worth P11,200, VAT
inclusive, from Willie, a VAT registered seller. The passed on VAT of P1,200 on
the purchases is -
A. an expense
В. part of the cost of purchases
C. a tax credit
D ignored
A non-VAT taxpayer is not allowed to separate the tax from the amount of
goods purchased. Thus, the tax will become part of the cost of the goods.
27 Altura sold goods at an invoice value of P123,200 to Beltran on account
Beltran sold the same goods to Cantona for P143,000 (exclusive of tax) cash.
Amponya
The buyer should record credit an Accounts Payable of P123,200 bec
Purchases should be recorded at P110,000 only because this amount is the
correct value of the goods purchased. To record purchases of P123.20
414
CPA REVIEWER IN TAXATION -
this is the actual amount of payable to the seller.
would result to an overstatement of inventory.
The input tax is 12% of the actual value of the goods purchased,
29
in Question 27 above, assuming that Cantoria is not subject to VAT In the
of the goods by Beltran to Cantoria-
A Beltran should record debit Cash of P125,840.
В. Beltran should record debit Cash of P143,000 in his books.
C. Cantoria should debit Purchases of P125,840 and a debit Input tax a
P17,160
D. Cantoria should debit Purchases of P 143,000
A non-VAT registered person is not authorized to maintain the Output Ta
and Input Tax accounts. All purchases do not recognize input tax even if the
articles are subject to VAT and sold by VAT registered persons. In the same
way, it is not also allowed to add VAT on its selling price of goods.
30 144 Statement: In case tax exempt products are sold domestically to a VAT
registered person, the VAT otherwise due on such product shall be considered
as input tax creditable against his output tax payable.
2nd Statement: Export sales by a VAT registered person are subject to zero-
rating and so he can claim and enjoy a credit for the tax invoiced to him on his
purchases. If he is not VAT registered, his export sales are exempt, but he is
not entitled to tax credit for inputs. (RPCPA)
A. Both statements are true.
B. 1statement is false, 2nd statement is true
C. Both statements are false.

D. 1st statement is true, 2nd statement is false.
Tax exempt products do not result to value-added tax. Export sales by VAT
registered persons are zero rated. The Input taxes relative to the purchase of
such goods can be claimed as tax credit from Output Taxes of other
transactions.
415
Ese
PO
Number 32 through 34 are based on the following information:
Transaction 1 -
An agricultural food producer sells his products in their orginal
state to a food processor who also buys packaging materials
and containers from a manufacturer / supplier
Transaction 2
The food processor transforms the food products into
processed foods and sells to a wholesaler / exporter
Transaction 3
The exporter sells the goods to foreign buyers.
Transaction 4 -
The wholesaler delivers the merchandise to retailers.
Transaction 5 -
The retailers sell the goods to households or ultimate
consumers.
31. Which of the above transactions is VAT exempt?
A Transaction 1
C Transaction 3
B. Transaction 2
D. Transaction 4
A
The sale of agricultural food products in their original state are exempt from
VAT
32. Based on the information above, which transaction is zero rated?
A Transaction 1
C Transaction 3
В. Transaction 2
D Transaction 4
Export sales are zero rated. Thus, resulting to an output tax of zero. The
input taxes charged by the food processor can be claimed by the exporter as
tax credit or refund.
33. Based on the information above, the value-added taxes are absorbed by
A. Food processor
C. Retailer
В. Wholesaler/ exporter
D. Households / ultimate consumer
All taxes imposed on the different stages of distribution are absorbed and
paid by the ultimate consumer.
416
34. Input tax is available to a VAT-registered buyer, provided that (BEQ)
The seller is a VAT-registered person
The seller issues a VAT invoice or official receipt, which separately
indicates the VAT component
C The goods or services are subject to or exempt from VAT, but the sale is
covered by a VAT invoice or receipt issued by VAT-registered person
The name and TIN of the buyer is not stated or shown in the VAT invoice or
receipt
3€
B.
35 Boboy a full-time government employee, ate in one fastfood chain in Dipolog
City. He was issued the following receipt:
GREENWICH - DIPOLOG CITY Branch (0369)
Rizal Ave. Cor Lacaya St., Dipolog City
TIN # 200-333-173-216 VẬT
POSO1 SN: L369804
BIR PERMIT NO: 1006-091-10347-216
SERVING #01
10/24/2007 18:28 APP OR # 01090435
1 SOLO SPE ML
1 XCHANGE - LRG CK
81.00
12.00
1 Item (s)
VATable
VAT-Exempt
12% VAT
TOTAL DUE
93.00
83.04
0.00
9.96
93.00
CASH
CHANGE DUE
500.00
407.00
This serves as your OFFICIAL RECEIPT.
Based on the receipt issued above-
A.
B.
C.
D.
The amount of P83.04 represents the input tax of the fastfood chain
The input tax deductible from the output tax of Boboy is P9.96
The total invoice price of P93 is inclusive of the 12% VAT
Boboy has been subjected to VAT twice: first on the P93 and second, on
the P9.96.
417
36. For 2015, input tax is not available as a credit against the output tax of the buyer
of taxable goods or services during the quarter, it (BEQ)
The VAT invoice or receipt of the seller is registered with the BIR
B.
The VAT invoice or receipt of the seller does not separately indicate the
gross selling price or gross receipts and the VAT component therein
С C The VAT invoice or receipt is issued in the name of the VAT-registered
buyer and his TIN is shown in said invoice or receipt
D The VAT invoice or receipt issued by the seller shows the Taxpayer
Identification Number plus the word "VAT" or "VAT registered person
B.
Numbers 37 and 38 are based on the following information:
37 The Pastry Shop sells cakes and pastry items to well-known hotels around the
Metro Manila area The hotels are allowed credit based on the track record of
the hotels. The total amounts received or receivable from sales by the Pastry
Shop in the 2nd quarter of 2015 were P224,000, including the value-added tax
Seventy five percent of the sales are normally on account. How much is the
value-added tax on the sales for the 2nd quarter of 2015? (RPCPA)
A А. P20,000
с C P26,880
B. 24.000
15,000
B.
24,000
Value added tax (224,000 x 3/28)
38
The account title to best reflect the value-added tax in the preceding number
(RPCPA) -
A Sales tax payable
C. Input tax
B Value-added tax payable D Output tax
39 Cruz, a trader, made the following transactions of goods, exclusive of VAT
during the second quarter
417
36. For 2015, input tax is not available as a credit against the output tax of the buyer
of taxable goods or services during the quarter, it (BEQ)
The VAT invoice or receipt of the seller is registered with the BIR
B.
The VAT invoice or receipt of the seller does not separately indicate the
gross selling price or gross receipts and the VAT component therein
С C The VAT invoice or receipt is issued in the name of the VAT-registered
buyer and his TIN is shown in said invoice or receipt
D The VAT invoice or receipt issued by the seller shows the Taxpayer
Identification Number plus the word "VAT" or "VAT registered person
B.
Numbers 37 and 38 are based on the following information:
37 The Pastry Shop sells cakes and pastry items to well-known hotels around the
Metro Manila area The hotels are allowed credit based on the track record of
the hotels. The total amounts received or receivable from sales by the Pastry
Shop in the 2nd quarter of 2015 were P224,000, including the value-added tax
Seventy five percent of the sales are normally on account. How much is the
value-added tax on the sales for the 2nd quarter of 2015? (RPCPA)
A А. P20,000
с C P26,880
B. 24.000
15,000
B.
24,000
Value added tax (224,000 x 3/28)
38
The account title to best reflect the value-added tax in the preceding number
(RPCPA) -
A Sales tax payable
C. Input tax
B Value-added tax payable D Output tax
39 Cruz, a trader, made the following transactions of goods, exclusive of VAT
during the second quarter

429
The government or any of its political subdivisions, instrumentalities or
agencies, including COCCs shall before making payment on account of each
purchase of goods and services which are subject to VAT, deduct and
withhold a final VAT at the rate of 5% of the gross payment thereof.
Should actual input VAT exceed 5% of gross payments, the excess may form
part of sellers' expense or cost. On the other
hand, if it is less than 5% of
gross payment, the difference must be closed to expense or cost (RR 16-
2005)
60. Which of the following statements is not correct?
A Transitional input tax is 2% of the value of the inventory or the actual VAT
paid, whichever is higher
В. Amounts received from services performed by an individual pursuant to an
employer-employee relationship are exempt from VAT.
C. Export sales by VAT registered persons are not subject to VAT.
D Export sales by persons who are not VAT-registered are VAT exempt.
:C С
Export sales by VAT-registered persons are subject to VAT, they are zero
rated transactions.
61. Transaction by a VAT-registered taxpayer which is not subject to VAT:
A Foreign currency denominated sale.
В. Export sale.
C Transaction deemed sale.
D Sale of services rendered in foreign countries.
A sale of services in foreign countries is not subject to VAT, whether the seller
is VAT-registered or non-VAT registered.
62. Statement 1: There is a VAT in an importation by an importer-merchant even if
he does not intend to sell the imported article.
Statement 2: A person who is exempt from VAT may register under the VAT
system
A. Statement 1 is false, Statement 2 is false.
CPA REVIEWER IN TAXATION - Amon
sold. Importations of goods to be used as raw materials in the productions
pay VAT such as transactions undertaken in the course of business which do
430
Statement 1 is faise, Statement 2 is true.
Statement 1 is true, Statement 2 is false
Statement 1 is true, Statement 2 is true
VAL
goods for sale, or to be used for personal purposes (if not classified
exempt transactions) are subject to VAT.
There are exempt transactions for which a person may opt to register and
not exceed P1,919,500 for
any 12-month period, and operation of radio
and/or television broadcasting by a franchise grantee whose gross annua
receipts for the preceding calendar year do not exceed P10 million, etc.
63
1st Statement: VAT is imposed on goods brought into the Philippines, whether
for use in business or not.
2nd Statement: In the case of goods imported into the Philippines by a VAT
exempt person which are subsequently sold to taxable persons, the latter Shah
be considered the importer thereof and shall be liable for VAT due on such
importation
A Statement 1 is true, Statement 2 is true.
B. Statement 1 is false, Statement 2 is false.
C Statement 1 is false, Statement 2 is true
D Statement 1 is true, Statement 2 is false.
64. Celebrado, a VAT registered taxpayer, had the following data on importation in
2015:
For Sale Own Use
Invoice cost (Exchange rate: $1 : Php 46)
$ 5,650 $ 850
Customs duties
12% 10%
Freight
20,000 4,000
Insurance
28,000 4,250
Other charges before release from customs house 7,000 2,500
Facilitation fee
10,000 5,000
Freight from customs house to warehouse (net of
VAT)
12,000
1,200
CPA REVIEWER IN TAXATION – Ampang
432
included in gross selling price
C.
The other percentage tax (0.g. gross receipts tax) paid by the last
place of production or from customs custody is included in the gross
The documentary stamp tax paid by the taxpayer is included in the grou
А
price
selling price or gross receipts.
YAL
69
67. Robin P. imported a car from the U.S.A. for his personal use. Total landed os
is P250,000 (about US $5,000) including customs duties of P50,000 VAT
payable is: (RPCPA)
A. P 25,000
B.
30,000
C. 10,000
D None, because importation is for personal use.
70
Total landed cost
P 250,000
Rate of tax
12%
VAT payable
30.000
Importations of goods are subject to VAT even if the importer's intention is
to use the goods for personal purposes.
The tax is based on 12% of the amount used by the Bureau of Customs in
determining customs duties, plus excise taxes, if any, because it is
understood that said amount excludes the tax.
68. A VAT-registered contractor performed services for his customer in 2014 and
billed him P11.2 Million, broken down as follows: P10 Million - cost of services,
plus P1.2 Million, 12% VAT. Of the contract price of P10 Million, only P8 Million
plus VAT thereon was received from the customer in 2014, and the balance of
*P4 Million plus VAT was received by the contractor in 2015. How much is the
taxable gross receipts of the contractor for 2014, for VAT purposes? (BEQ)
A. P10 million, the total cost of services performed in 2014.
B. P8 million, the amount received from the customer in 2014
C P8 million plus vat received from the customer in 2014
D. P11.2 million, the total cost of services performed plus 12% vat.
Aa
Theresa Junio

Law

Hochgeladen von

Dokumentinformationen

Originalbeschreibung:

Originaltitel

Copyright

Verfügbare Formate

Dieses Dokument teilen

Dokument teilen oder einbetten

Freigabeoptionen

Stufen Sie dieses Dokument als nützlich ein?

Sind diese Inhalte unangemessen?

Copyright:

Verfügbare Formate

Law

Hochgeladen von

Copyright:

Verfügbare Formate

PART 5

Value-added tax is a uniform tax imposed on person, who in the course of

trade or business sells, barters, exchanges or leases goods or properties or

renders services, and on any person who imports goods.

Who are liable?

Any individual, trust, estate, partnership, corporation, joint venture, cooperative

or association who in the course of his trade or business:

Sells, barters, exchanges goods or properties

2. Sells or renders services

Nature and characteristics

VAT is a tax on consumption levied on the sale, barter, exchange or lease of

goods or properties and services in the Philippines and on importation of goods

or lessee of the goods, properties or services.

Réforms effected by VAT

1. Simplification of the business tax system.

3. Enhancement of efficiency in tax administration.

You sent Today at 10:24 AM

CPA REVIEWER IN TAXATION -- Ampongan

Business taxes abolished by the introduction of VAT

Advance sales tax

4. Subsequent sales tax

8. Tax on cinematographic film owners, lessors and distributors

9. Excise taxes on matches, solvents and video tapes

10. Tax on hotel and motel

Tax on lending investors

12. Tax on dealers in securities

Tax on insurance premiums on non-life insurance companies (except crop

15. Franchise tax (except on radio and television broadcasting companies

a. Sale or importation of agricultural and marine food products in their original

state, livestock and poultry of a kind generally used as, or yielding or

Products classified under this paragraph shall be considered in their original

state even if they have undergone the simple processes of preparation or

preservation for the market, such as freezing, drying, salting, broiling,

b. Sale or importation of fertilizers; seeds, seedlings and fingerlings; fish, prawn,

livestock and poultry feeds, including ingredients, whether locally produced

or imported, used in the manufacture of finished feeds (except specialty feeds

generally considered as pets);

c. Importation of personal and household effects belonging to the residents of

the Philippines returning from abroad and nonresident citizens coming to

You sent Today at 10:24 AM

VALUE-ADDED TAX - Notes

d. Importation of professional instruments and implements, wearing apparel,

aircraft, machinery, other goods for use in the manufacture of merchandise

of any kind in commercial quantity) belonging to persons coming to settle in

accompanying such persons, or arriving within ninety (90) days before or

after their arrival, upon the production of evidence satisfactory to the

Commissioner, that such persons are actually coming to settle in the

Philippines and that the change of residence is bona fide;

Services subject to percentage tax under Title V;

g. Medical, dental, hospital and veterinary services except those rendered by

h. Educational services rendered by private educational institutions; duly

accredited by the Department of Education, Culture and Sports (DECS) and

the Commission on Higher Education (CHED), the Technical Education and

Skills Development Authority (TESDA) and those rendered by the

i. Services rendered by individuals pursuant to an employer-employee

j. Services rendered by regional or area headquarters established in the

Philippines by multinational corporations which act as supervisory,

communications and coordinating centers for their affiliates, subsidiaries or

k. Transactions which are exempt under international agreements to which the

1. Sales by agricultural cooperatives duly registered with the Cooperative

Development Authority to their members as well as sale of their produce,

whether in its original state or processed form, to non-members (if the