1.

LILY CASE

a. No. The BIR should not allow the refund.

Under the tax rules, VAT refund is applicable only to VAT-registered taxpayer claiming a refund of
excess or unutilized input tax credits.
In this case, Lily is non-vat registered taxpayer. Lily should have advised the supplier not to
impose the 12% VAT since the purchase of materials and supplies were necessary to its
business conduct. Hence, Lily’s purchase should not be subjected to 12% input VAT.

b. Per Tax rule, refund claims/applications must be filed within two years from the close of the
taxable quarter when the sales were made.

2. Cases

a. No. Per VAT rules, if the taxpayer sells marine food products in its original state even they
have undergone simple preparation such as drying, salting among others are VAT exempt.
In this case, the daing na posit and tuyo are VAT-exempt. Hence, this should not be subject
to VAT.

b. No. Per BIR registration, Mr Pakyaw is still a non-VAT registered taxpayer. Hence, he cannot
impose 12% output VAT on its sale to Mr. Suka.

3. SEA GATE CASE:

a. No. Sales of PEZA-registered entity ( export sales) are zero-rated sales. Hence, not liable to pay
12% output VAT.
b. Yes. As a vat registered taxpayer, SEAGATE can claim input taxes amounting to 28M. In this
case, there will be excess input amounting to 28M since there is no output tax during the
reporting period.
c. Per Tax rules, excess input tax on zero-rated transactions under section 112 (a) of tax code can
be filed within two years from the close of the taxable quarter when the sales were made.
d. If the amount of output tax is higher than the input VAT, I will advise to charge all of the input
taxes during the period against the output VAT and consequently pay to the BIR any VAT liability
computed.

4.

a. No. Under a special law, US Embassy’s purchase of audi via importation are not subject to
VAT.Hence, No VAT shall be imposed on the importation of Audi.

b. Yes. The transaction with the beneficiary and Mr. kiss was subject to VAT. Under VAT rules, Any
person or entity who, in the course of his trade or business, sells, barters, exchanges, leases goods or
properties and renders services subject to VAT.
c. No. This covers exemption. Under special law, purchases made by ADB that is pursuant to its business
are not subject to VAT. Hence, exempt from VAT.

5. a Since the seller is non-VAT tax payer. He should not impose output VAT to its client. The buyer
should ask for the refund of the 12% output VAT from buyer if it is already paid.

b. ABC should report output VAT from the sale of goods to XYZ. XYZ on the other hand can claim the
input VAT the VAT charged to it by ABC Corp.

c. Sale of agricultural products are covered by VAT exemption. Hence, sales of agricultural products by
ABC Corporation should be reported as VAT exempt sales.

6. Mrs. B should be registered as VAT. According to rule, person should be registered as VAT taxpayer if
his/her annual gross sales for the year will exceed 1919500. In the case at bar, Mrs B is engaged into
selling of tissue and sari sari store with total revenues amounting to 1,950,000. Since, it exceeds the VAT
threshold – Mrs B should be registered as VAT.

7. All of them will be registered as VAT. Since the Home Office is registered as VAT considering the total
sales from home offices and all of the brances would exceed 1,919,500, the company will be considered
as VAT registered. The branches mentioned are extensions of the personality of Home office located in
Baguio. Hence, all of them are subject to VAT.

b. Final Withholding VAT – is withholding VAT imposed on the services rendered by non-residents and
government here in the Philippines. Regular VAT is VAT imposed by any VAT-registered taxpayer in the
course of his trade or business, sells, barters, exchanges, leases goods or properties and renders
services.

c. As to Transitional – Persons who can avail are those persons who elect to be VAT registered.
Basis of transitional input is the Beginning inventory of VAT-subject goods, materials and
supplies. Transitional input tax allowed is higher between the 2%1. 2% of the VAT-subject
beginning inventory value for income tax purposes; and Actual VAT paid on such beginning
inventory.

As to presumptive – Persons who can avail are processors of sardines, mackerel and milk,
Manufacturer of refined sugar, cooking oil and packed noodle-based instant meal; 3. Basis of
presumptive input tax – Gross value in money of purchases of primary agricultural products used
as inputs in the processing or manufacturing of those items menitioned. Rate of presumptive
input tax – 4%

d. VAT invoice is an evidence to support/or issued by seller to support sale of goods and properties
in ordinary course of business. VAT official receipts are issued by seller on sale of services and
lease of properties in ordinary course of business.

e. Impact refers to the initial burden of the tax, while incidence refers to the ultimate burden of the
tax. The impact of a tax falls upon the person from whom the tax is collected and the incidence
rests on the person who pays it eventually.
For example, its impact is on the producers, in the first instance, as they are liable to pay it to the
government. But, the producers may succeed in collecting it from the consumers by raising the
price of soap by the amount of tax. In that case, consumers eventually pay the tax and so the
incidence falls upon them.