FABM2 - LESSON REINFORCEMENT: VAT AND PERCENTAGE TAX

FABM2 - LESSON REINFORCEMENT: VAT AND PERCENTAGE TAX

IN SOLVING FOR THE QUARTERLY PERCENTAGE TAX, THE FORMULA IS:

GROSS SALES/RECEIPTS X 3%

THE SALES DISCOUNT, RETURNS, AND OTHER ITEMS WILL BE USED HOWEVER IN GETTING THE INCOME TAX DUE.

TO GET THE 8% PERCENTAGE TAX, THE FORMULA IS:

(GROSS SALES/RECEIPTS - P250,000) X 8%

COPY THE FOLLOWING INFORMATION

assume that the business opted to use the 3% quarterly percentage tax.

SALES - P1,800,000

SALES DISCOUNTS - P150,000

COST OF SALES - P700,000

OPERATING EXPENSES - P200,000

SOLUTION:

PERCENTAGE TAX = P1,800,000 X 3%

PERCENTAGE TAX = P54,000

PERCENTAGE TAX = GROSS SALES X 3%

In getting the Taxable Income the formula is same as getting the Net Income which was discussed during Income Statement Discussion

A VAT-Registered business is preparing for his Monthly VAT Returns.

Here are the important details

-Sales - P4,500,000

-Sales Returns and Allowances - P500,000

-Cost of Sales - P3,600,000

-Operating Expenses - P50,000