VAT (Self-Test 5) GCC October 2017

1. Determine whether or not the following are sale of goods, property, services or importation and whether or not
subject to VAT (no distinction if zero rated or 12% needed)

Transaction VAT-subject?
a. Sale of bread by a bakery
b. Sale of residential lot by a real estate dealer
c. Sale of residential house and lot by the owner who resides in such property
d. Sale of food and drinks by restaurant and other eating places
e. Importation of raw materials for business purpose
f. Importation of computer for personal use
g. Sale of office supplies by a non-profit institution
h. Warehousing services by a government-oowned or controlled corporation
i. Sale of food and drinks in a club operated by a non-profit organization

2. 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 April, 2017 were P224,000, including the value-added tax. Seventy-five percent (75%) of the
sales are normally on account.

How much is the value-added tax on the sales for the month of April, 2017?

3. The following data are taken from sale of a real estate dealer on January 2, 2017:

Consideration in the Deed of Sale P5,000,000

Fair market value per tax declaration 4,800,000
Fair market value per BIR 5,200,000
Selling price of an adjacent lot sold on the same date 6,000,000
Payments on the consideration:
January 2, 2017 1,000,000
January 2, 2018 2,000,000
January 2, 2019 2,000,000

a. How much is the output tax for January 2, 2017?

b. How much is the output tax for January 2, 2018?
c. How much is the output tax for January 2, 2019?

4. The following data are taken from the books of a dealer in securities:

Selling price, shares held as inventory P3,000,000

Selling price, shares held as investment 2,000,000
Acquisition cost, shares held as inventory 1,000,000
Acquisiton cost, shares held as investment 1,500,000
Other income, shares held as inventory 200,000

How much is the output tax using 12% rate?

5. A VAT-registered contractor has the following selected VAT exclusive data for the month of July 2017:

Collections from contracts completed in June, 2017 P500,000

Advances from contracts to be completed in August, 2017 300,000
Collections from contracts completed in July, 2017, net of 10% retention on billings transferred
by the payor to the account of the contractor 198,000
Materials charged with the services rendered, July, 2017 100,000
Payments for services rendered by a sub-contractor, July, 2017 200,000

a. How much is the gross receipts for the month of July, 2017?
b. How much is the output tax for the month of July, 2017?
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6. A VAT-registered taxpayer has the following VAT-exclusive data for the month of January 2017:

Accounts receivable, January 1, 2017 P 500,000

Sales on account for the month of January 1,000,000
Cash sales for the month of January 300,000
Accounts receivable, January 31, 2017 700,000
Cash purchases for the month of January 2017 400,000

a. How much is the output tax for the month of January, 2017 using 12% rate assuming the taxpayer is a trader.
b. How much is the output tax for January, 2017 using 12% rate assuming the taxpayer is service provider.

7. Determine whether or not the following are subject to 12% VAT or 0% VAT

a. Sale and actual shipment of goods from the Philippines to a foreign country, irrespective of any shipping
arrangement, paid for in acceptable foreign currency
b. Sale and actual shipment of goods from the Philippines to a foreign country, irrespective of any shipping
arrangement, paid for in Philippine peso
c. Sale of raw materials or packaging materials to a nonresident 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 paid for in acceptable foreign currency
d. Sale of raw materials or packaging materials to export-oriented enterprise whose export sales exceed 70% of the
total annual production paid for in Philippine peso
e. Sale of equipment to export-oriented enterprise whose export sales exceed 70% of the total annual production
paid for in Philippine peso
f. Sale to diplomatic missions and other agencies and/or instrumentalities granted tax immunities, of locally
manufactured, assembled or repacked products paid for in local currency
g. Sale of equipment to persons engaged in international shipping or international air transport operations
h. Processing, manufacturing or repacking of goods for other persons doing business outside the Philippines which
goods are subsequently exported paid for in acceptable foreign currency
i. Processing, manufacturing or repacking of goods for other persons doing business in the Philippines which goods
are subsequently exported
j. Transport of passengers and cargo by Cebu Pacific from the Manila to Singapore
k. Transport of passengers and cargo by Philippine Air Lines from the Manila to Cebu
l. Sale of power or fuel generated through wind mills
m. Sale of power or fuel generated through a coal-fed generating power plant
n. Sale of services related to the maintenance or operation of electric plant generating said power through water falls

8. Determine whether/not the following transactions (forex related) are subject are subject to 12% VAT or 0% VAT

a. Sale to an American residing in Los Angeles, California, USA of furniture manufactured in Cebu to be delivered
to a Filipino residing in Quezon City and paid for in US dollars
b. Sale to a Japanese national residing in Tokyo of a processed mango in Iloilo to be delivered to his girlfriend who
resides in Manila and paid for in Philippine peso
c. Sale to a Filipino residing in Hongkong of pieces of jewelry assembled in Bulacan to be delivered to her fiancee
in Cebu paid for in Hongkong dollars
d. Sale of furniture assembled in Cebu for the personal use of a Filipino residing in Bahrain paid for in acceptable
foreign currency

9. Determine whether or not the VAT can be passed-on and the treatment of the passed-on VAT.

Can pass Treatment (Input VAT,

on VAT? Cost/expense, None)
a. Sale by a VAT-registered seller to a VAT-registered trader
b. Sale by a VAT-registered seller to a VAT-exempt trader
c. Sale by a VAT-registered seller to IRRI
d. Sale by a VAT-registered seller to Development Bank of the Philippines
e. Sale by a VAT-exempt seller to a VAT-subject trader
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10. Determine whether the following qualify as VAT-subject deemed sale transactions or not. (indicate deemed
sale or not deemed sale)

a. VAT-registered person withdraws goods from his business for his personal use
b. Property dividends which constitute stocks in trade or properties primarily held for sale or lease declared
out of retained earnings
c. Consigned goods returned by the consignee within the 60-day period
d. Goods on hand when a single proprietorship incorporates
e. Proprietor of a single proprietorship sells his entire business
f. Goods on hand upon the dissolution of a partnership and creation of a new partnership which takes over
the business

11. Determine whether the following are subject to VAT or not

a. Goods on hand when a VAT-registered person engaged in a taxable activity like wholesaler or retailer
who decides to discontinue such activity and engages instead in life insurance business or in any other
business not subject to VAT
b. Unused supplies or materials when a request for cancellation of registration due to reversion to exempt
status was approved
c. Capital goods at the time of approval of a request for cancellation of registration of one who commenced
business with the expectation of gross sales or receipts exceeding P1,919,500.00, but who failed to exceed
this amount during the first twelve months of operation.
d. Goods or properties existing as of the change of control of a corporation by the acquisition of the
controlling interest of such corporation by another stockholder (individual or corporate) or group of
stockholders.
e. Stock-in-trade existing upon change in the trade or corporate name of the business
f. Goods on hand upon merger or consolidation of corporations
g. Exchange of goods or properties including real properties used in business or held for sale or lease by the
transferor, for shares of stocks, whether resulting in corporate control or not

12. The following information taken from the books of a VAT-registered enterprise was provided to you:
Domestic sales of goods P3,000,000
Sales of packaging materials to an export oriented enterprise whose export sales
exceed 70% of the total annual production 2,000,000
Local sales of goods to Asian Development Bank (ADB) 500,000
Consignment of goods (not returned within 60 days following the date of consignment) 200,000
Goods transferred for the personal use of the owner (cost is P90,000), market value 100,000

How much was the total taxable sales and the output tax using 12% VAT rate?

13. Mr. Cris T. James, not VAT-registered, imported an article from Japan for his personal use. The invoice value
of the imported article was Y1,000,000 (Y1=P0.35). The following were incurred in connection with the
importation:
Insurance P15,000
Freight 10,000
Postage 5,000
Wharfage dues 7,000
Arrastre charges 8,000
Brokerage fees 25,000
Facilitation fee 3,000

The imported article was subject to P50,000 customs duties and to P30,000 excise tax.

How much was the VAT on importation using 12% rate?

14. A customer, with his beloved wife, had lunch at Dean and Deluca. He ordered the following (with the
corresponding VAT-inclusive price): Margherita Parma Pizza, P780.00; Caesar Salad, P380.00; New York
Cheesecake, P220.00; Hot lemon Grass Tea, P110.00; Mango Basil Smoothie, P160.00.

Dean and Deluca added 10% service charge to the selling price. How much was the output VAT and the total
amount due including passed-on VAT and service charge?