17

Question 1

Which is not a major business internal revenue tax?
a. percentage tax
b. excise tax
c. donor’s tax
d. value-added tax

Answer 1

c

Question 2

Who is not engaged in business?
a. a trader
b. a seller of his residential house
c. a person employed by a corporation
d. a partner in a professional partnership

Answer 2

b

Question 3

Which is not an onerous transfer?
a. barter
b. exchange
c. succession
d. sale

Answer 3

c

Question 4

Which of the following sale of goods or property is not subject to VAT?
a. Real property held as capital asset.
b. Real property held primarily for sale to customers.
c. Right to use in the Philippines of any industrial equipment.
d. Right to use in the Philippines of any scientific equipment.

Answer 4

a

Question 5

Of the following sales by a VAT-registered person, which is not a zero-rated sale?
Sale of consigned goods within 60 days
Export sales
Foreign currency denominated sale
d. Sales as provided under special law or international agreement to which the Philippines is a signatory

Answer 5

a

Question 6

True or False

Value-added tax (VAT) is a direct tax imposed on consumers.

Answer 6

False

Question 7

True or False

VAT is applicable to the value added at each stage of distribution.

Answer 7

True

Question 8

True or False

VAT is an indirect tax that can be passed on to the buyer.

Answer 8

True

Question 9

True or False

As per Republic Act 9337, the VAT threshold is currently set at P1,500,000.

Answer 9

False

Question 10

True or False

Any person who imports goods is subject to VAT.

Answer 10

True

Question 11

True or False

Transactions by non-stock, non-profit organizations are always exempt from VAT.

Answer 11

False

Question 12

True or False

A business with gross sales not exceeding P100,000 in a 12-month period is not considered in the course of business.

Answer 12

True

Question 13

True or False

Services rendered in the Philippines by a non-resident foreign person are always VAT-exempt

Answer 13

False

Question 14

True or False

VAT on sales of goods is calculated based on the net selling price.

Answer 14

False

Question 15

True or False

The TRAIN Law removed the term “deemed sale” from the VAT provisions.

Answer 15

True

Question 16

True or False

The standard VAT rate in the Philippines is 10%.

Answer 16

False

Question 17

True or False

The VAT on taxable sales is paid by the buyer of goods or services

Answer 17

False

Question 18

True or False

Export sales by VAT-registered persons are subject to zero-rated VAT.

Answer 18

True

Question 19

True or False

Before the TRAIN Law, foreign currency denominated sales were subject to zero-rated VAT.

Answer 19

True

Question 20

True or False

VAT zero-rating on local purchases requires a certification from the concerned Investment Promotion Agency (IPA).

Answer 20

True

Question 21

True or False

a Bonafide transfer of property in the ordinary course of business is considered as made for an adequate and full consideration in money or money’s worth.

Answer 21

True

Question 22

True or False

When there is no reciprocity, the transfer of intangible personal property located in the Philippines of a non-resident alien donor is not subject to tax.

Answer 22

False

Question 23

True or False

the gross gift of a resident citizen, a non-resident citizen or a resident alien donor shall include all his property wherever situated.

Answer 23

True

Question 24

True or False

If the donor was a non-resident alien, only his property located in the Philippines shall form part of his gross gift.

Answer 24

True

Question 25

True or False the inclusion of intangible personal property located in the Philippines in the gross gift of a non-resident alien donor is subject to reciprocity rule.

Answer 25

True

Question 26

True or False If the gift is made in property, the fair market value thereof at the time of the gift shall be considered the amount of the gift

Answer 26

True

Question 27

True or False VAT is an indirect tax that can be passed on to consumers. Justification: VAT is a tax on the value added at each stage of distribution and is ultimately borne by the end consumer.

Answer 27

True

Question 28

True or False All businesses, regardless of gross sales, are subject to VAT. Justification: Businesses with gross sales below P3,000,000 are not required to register for VAT.

Answer 28

False

Question 29

True or False The TRAIN Law removed the phrase "foreign currency denominated sale" as a zero-rated sale. Justification: Under RA 10963, foreign currency denominated sales no longer qualify for VAT zero-rating.

Answer 29

True

Question 30

True or False Local government units are automatically exempt from VAT registration requirements. Justification: No automatic exemption exists; if a government entity engages in taxable transactions, it must register for VAT.

Answer 30

False

Question 31

True or False The VAT rate for taxable sales in the Philippines is 10%. Justification: The correct VAT rate is 12% as per current tax laws.

Answer 31

False

Question 32

True or False Services rendered in the Philippines by a non-resident foreign person are considered "in the course of trade or business." Justification: Regardless of the frequency of transactions, non-residents providing services in the country are subject to VAT.

Answer 32

True

Question 33

True or False All services purchased by export enterprises are automatically subject to VAT zero-rating. Justification: Certain services such as janitorial, security, and administrative services do not qualify for VAT zero-rating unless proven indispensable.

Answer 33

False

Question 34

True or False VAT is imposed at each stage of distribution rather than just on final consumption. Justification: VAT is levied on the value added at every stage of production and distribution.

Answer 34

True

Question 35

True or False The VAT zero-rating of local purchases is subject to post-audit verification by the BIR. Justification: The BIR ensures that purchases are indeed directly and exclusively used for registered projects.

Answer 35

True

Question 36

True or False Businesses with gross sales under P100,000 are still required to register for VAT. Justification: Businesses operating primarily for subsistence with gross sales under P100,000 are not considered engaged in trade or business.

Answer 36

False

Question 37

A tax imposed on the value added at each stage of distribution in the sale, lease, or exchange of goods, properties, or services.

Answer 37

Answer: Value-Added Tax (VAT)

Question 38

The law that increased the VAT threshold to P3,000,000 and took effect on November 1, 2005.

Answer 38

Answer: Value-Added Tax Reform Act (Republic Act 9337)

Question 39

The tax rate applicable to taxable sales, barter, or exchange of goods and services in the Philippines.

Answer 39

Answer: 12%

Question 40

A tax that may be shifted or passed on to the buyer, transferee, or lessee.

Answer 40

Answer: Indirect Tax

Question 41

The law that removed "foreign currency denominated sale" as a zero-rated sale.

Answer 41

Answer: Tax Reform for Acceleration and Inclusion (TRAIN) Law (RA 10963)

Question 42

The gross selling price or gross value in money of goods or services on which VAT is computed.

Answer 42

Answer: Tax Base

Question 43

The sale of goods or services by VAT-registered persons to foreign buyers that are exempt from VAT.

Answer 43

Answer: Export Sales

Question 44

The government agency responsible for VAT regulation and collection in the Philippines.

Answer 44

Answer: Bureau of Internal Revenue (BIR)

Question 45

The body that issues VAT zero-rating certification for local purchases of goods related to registered projects or activities.

Answer 45

Answer: Investment Promotion Agency (IPA)

Question 46

The phrase referring to the regular pursuit of a commercial or economic activity, making it subject to VAT.

Answer 46

Answer: In the Course of Trade or Business