Intro to Taxation

Statement 1: Business taxes are paid by sellers while the VAT on importation is paid by the buyers.

Statement 2: Domestic sellers pay consumption tax to the government.

• True, False

• False, True

• True, True

• False, False

Statement 1: The consumption tax for purchases of goods or services from foreign sources shall be payable by the buyer.

Statement 2: The sale by non-resident persons in the Philippines is exempt from consumption tax.

• True, False

• False, True

• True, True

• False, False

Statement 1: Both domestic consumption and foreign consumption are subject to consumption tax.

Statement 2: Non-resident sellers are exempt from consumption taxes on their domestic sales.

• True, False

• False, True

• True, True

• False, False

Statement 1: Domestic sales are subject to business tax regardless if seller is business or not.

Statement 2: Importations are subject to VAT regardless if seller is business or not.

• True, False

• False, True

• True, True

• False, False

Statement 1: Consumption taxes should not apply to basic necessities.

Statement 2: Income tax is a tax to all, while consumption tax is a tax to the capable.

• True, False

• False, True

• True, True

• False, False

Who is the statutory taxpayer of business taxes?

• The seller who must be engaged in business or trade

• The seller, whether or not engaged in business or trade

• The buyer who must be engaged in business or trade

• The buyer, whether or not engaged in business or trade

Which statement is conceptually incorrect?

• The buyer pays the consumption tax on his purchases to the seller

• The buyer pays the consumption tax to the government

• The seller pays the consumption tax to the government

• The seller collects the consumption tax for the government

Fedi Company, a non-resident business, purchased P200,000 from Kultura Company, a resident business. Which will pay the consumption tax on this transaction?

• Kultura Company

• Fedi Company

• Both Fedi and Kultura

• Neither Fedi nor Kultura

Mr. Reid, an employee, imported a pair of shoes from Singapore. Which consumption tax is he liable to pay?

• Business tax

• VAT on importation

• Business tax and VAT on importation

• None

Sinadya Company, a VAT-registered taxpayer, purchased P400,000 worth of goods and sold the same for P800,000. Assuming that the business operation is limited to Philippine residents, what is the total business tax it will report on its sales?

• P96,000

• P48,000

• P24,000

• 0