Chapter 6
Drill exercises
1. Seller of agricultural food products Exempt
2. Furniture shop Vatable
3. Vegetable trader Exempt
4. A private high college Exempt
5. A private hospital Exempt
6. A dentist Vatable
7. Hospital drugstore Vatable
8. A non-profit elementary school Exempt
9. A government college Exempt
10. Restaurant Vatable
11. Bus operator % Tax
12. Hotel Vatable
13. Operator of domestic sea vessel Vatable
14. Life insurance company % tax
15. Mall Vatable
16. Domestic airliner Vatable
17. Lessor vessels or aircraf Vatable
18. Banks % tax
19. Operator of taxi % tax
20. International carriers % tax
21. Keepers of garage % tax
22. Book publishers Exempt
23. Quasi-banks % tax
24. Dealer of household appliances Vatable
25. Dealer of commercial lot Vatable
26. Insurance agent Vatable
27. Employee Exempt
28. Contractor Vatable
29. Processor of sardines Vatable
30. Auto parts dealer Vatable
31. Manufacturer of hog feeds Exempt
32. Seller of fertilizer and seeds Exempt
33. Fisherman Exempt
34. Fish vendor Exempt
35. Textile manufacturer Vatable
True or False 1
T 1. A person who exceeded the VAT-threshold in any 12-month period must register as a VAT
taxpayer.
T 2. The VAT applies on receipts or sales other than those exempted and those specifically
subject to percentage tax.
T 3. A person with vatable sales or receipts not exceeding the VAT-threshold may register as a
non- VAT taxpayers.
T 4. A person with vatable sales or receipts not exceeding the VAT-threshold may register as a
VAT taxpayer.
Note: (by optional registration) the statement did not say “must”
T 5. A person who commences business with an expectation to exceed the VAT-threshold must
register as a VAT-taxpayer.
Note: see revenue regulation provisions
F 6. A registrable person is exempt from VAT.
Note: He is vatable.
T 7. A VAT-registered person is exempt from VAT on VAT-exempt sales.
Note: VAT exempt sales are not subject to VAT regardless of the seller
T 8. A non-VAT taxpayer shall not bill VAT on his sale.
F 9. A VAT-registered person is liable to VAT on exempt sales and services specifically subject
to percentage tax.
Note: Only on vatable sales
F 10. The threshold for franchise grantees of electricity is P10,000,000.
Note: Franchise grantees of gas and water only.
T 11. The VAT threshold for sellers of goods or services is P3,000,000.
T 12. The VAT threshold for franchise grantees of gas and water is P10,000,000.
T 13. The VAT threshold applicable to professional practitioners is P3,000,000.
T 14. Exempt sales shall not be billed with an output VAT.
F 15. A sale to the government shall not be billed with output VAT since it is exempt from VAT.
Note: It is subject to 12% output VAT
True or False 2
F 1. Export sales shall be billed with output VAT.
Note: No output VAT because the VAT rate is 0%
F 2. The export sale of a VAT-taxpayer is an exempt sale.
Note: It is a zero-rated sale. For a non-VAT taxpayer, it is exempt.
F 3. A non-VAT-registered person who invoiced VAT on his sale shall be subject to 12% VAT
without the benefit of an input VAT 3% percentage tax, and 25% surcharge.
Note: 50% surcharge
T 4. Exempt sales which are billed as regular sales shall be considered as regular vatable sales.
F 5. The VAT payable of a VAT-registrable person is the output VAT without benefit of input
VAT plus 3% percentage tax.
Note: Output VAT but without benefit of input VAT, no percentage tax.
T 6. No input VAT traceable to exempt can be claimed sales as tax credit.
F 7. No input VAT traceable to government sales is claimable as tax credit.
Note: The 7% standard input VAT is claimable in lieu of the actual input VAT.
F 8. A VAT-registered person shall be subject to a final withholding VAT of 12% on sales to the
government.
Note: 5% final withholding VAT
F 9. The VAT payable of any person is always 3% of the value-added on the sales of goods.
Note: Sometimes it becomes 12% of the sale when no input VAT is claimable
T 10. The claimable input VAT on government sales is 7% of the sales.
T 11. The VAT payable on zero-rated sales is always zero.
Note: Technically true because the VAT payable is always negative
F 12. There is no way VAT payable could be negative in a particular month or quarter.
T 13. VAT is paid in three monthly installments similar to the percentage tax.
Note: Two monthly installments, and a quarterly payment
F 14. Exempt sales must be indicated as such; otherwise, they will be regarded as regular
sales.
T 15. The standard input VAT is 5% of government sales.
