JULY 19, 2016 TUESDAY

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1. What are the Importation Related VAT exempt transactions

2. is the sale by cooperatives subject to vat?
3. What is VAT?
ANS: Valencia pg. 331 6th Edition
4. When can we deduct the input tax from output tax?
5. What is input VAT?
6. When can a taxpayer's registration for VAT business become compulsory?
7. Discuss the VAT thresholds
8. IS THE LEASE OF PROPERTIES SUBJECT TO VAT?
9. What is Indirect Tax?
The tax is imposed to the seller rather than to the buyer.
10. Are gross receipts of hospital vat exempt?
11. How is Vat payable computed?
12. What is not allowed to be credited for the sales of VAT-registrable persons?
input VAT credit is not allowed
13. give atleast 3 examples of goods subj to vat?
14. Is the sale and importation of fuels subject to VAT?
Points to answer:
*sale is subj to vat
*importation of fuels, goods and supplies by person engaged in
-international shipping
-air transporting operations
Are exempt from VAT
15. What are the simple processes for preservation and preparation that will not change the
goods from its original state?
Answer:
Drying, Freezing,Salting, Smoking
Boiling, Broiling, Husking, Roasting, Stripping, Grinding
16. Give the general rules to apply in the determination of VAT.
17. The term 'export sales' means?
See Section 106. Letter A
18. What does Gross selling price mean?
19. What is taxable base?
Suggested answer: Valencia, page 504
20. Explain the difference between vat-exempt and zero-rated VAT.
21. Who introduced the value-added tax?
Ans: A certain Frenchman named Maurice Laure, introduced vat on wholesale items in
France in 1954.
22. Explain the destination principle of VAT system
23. What are the 3 conditions of optional VAT registration?
- Valencia, p.277
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24. What are the incidental transactions subject to business taxes?

See Valencia book, page 383; Incidental Transactions
25. True/false- the vat on importation is a business tax. If false, what are the three types of
business tax?
false. 2 types of consumption tax on domestic corp: VAT on importation & business tax.
3 types of business tax: vat on sales, percentage tax, excise tax
26. Who are required to file vat returns?
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, if the aggregate amount
of actual gross sales or receipts exceed One Million Nine Hundred Nineteen Thousand
Five Hundred Pesos (P1,919,500.00).

A person required to register as VAT taxpayer but failed to register

Any person, whether or not made in the course of his trade or business, who imports
goods
27. When is an export sales VAT-exempt?
28. If Mr. A leased a passenger vessel traveling from Philippines to Canada, will Mr. A's
lease of passenger vessel be subject to or exempt from Vat?"
(see the rules on sale, importation or lease of passenger/cargo vessels)
29. IS THE SALE OF FEEDS VATABLE?
30. Does the sale of drugs and medicine to out-patients are subject to VAT?
31. What are the two types of consumption?
Answer: Domestic and Foreign
32. What do you mean by "Cross border Doctrine"?
"Cross Border Doctrine" means no VAT shall be imposed to form part of the cost of
goods destined for consumption OUTSIDE of the territorial border of the taxing
authority. Hence, actual export of goods and services from the Phil to a foreign country
must be free from VAT
33. Define consumption tax?
Is a tax upon utilization of goods or services by consumer or buyers. It is a tax on
purchase or consumption of the buyer and not on the sale of the seller
34. IS SAN BEDA COLLEGE VATABLE?
35. When businesses give free goods for promotional purposes, can relative input VAT be
claimed as tax credit?
Dun sa first question, page 373 sa valencia 6th edition

36. ABC Company has land, sea and air transport operations. To improve its operation, ABC
company decided to import the following:
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1. 5 busses
2. 2 airplanes
3. 7 ships

Which of the following imports are exempted from VAT on importation?

ANS: The importation of Airplanes and Ships.

37. Are services rendered by millers for others, subject or exempt from Vat?
Answer: if services rendered by millers for othera are palay into rice, corn into grits and
sugar cane into raw sugar, those will be exempt frm Vat, other than that is already vatable
38. Mr. A bought frozen lamb meat from Garcia's supermarket. Garcia's supermarket
imported the lamb meat from Australian Lamb Exporter Co. Who is liable for the VAT
with respect to the importation and sale of the frozen lamb meat?
SUGGESTED Answer: No one. Sale or importation of agricultural and marine food
products in their original state is VAT exempt. Frozen lamb meat falls under agricultural
food product in its original state. Therefore, since the transaction is exempted from VAT,
no one shall be liable for VAT in the given transactions.
39. If a lawyer has 2 sources of income, one is teaching in a private school and second is
working on cases for his clients, is he subject or exempt from Vat?
Ans. 1st source: exempt because there employer-employee relationship
2nd source: vatable because he is practicing his profession