Business Tax

Which statement is true about business tax?

• A. Taxes imposed on businesses by the government based on their activities, revenue, or sales.

• B. "In the course of trade or business" means the regular conduct or pursuit of a commercial or an economic activity, including transactions incidental thereto, by any person regardless of whether or not the person engaged therein is a non-stock, non-profit private organization or government entity.

• C. Services rendered in the Philippines by a non-resident foreign person shall be considered as being rendered in the course of trade or business even if the performance is not regular.

• D. All of the above

Statement 1: For a person to be subjected to any business tax, it is necessary that he is regularly engaged in the conduct or pursuit of an economic activity.

Statement 2: A non-resident foreign person performing isolated transaction in the Philippines shall be liable to VAT.

• A. Both statements are true

• B. Both statements are false

• C. Only the first statement is true

• D. Only the second state statement is true

Which statement is wrong? Transactions considered "in the course of trade or business", and therefore subject to the business taxes include:

• A. Regular conduct or pursuit of a commercial or an economic activity by a stock private organization.

• B. Regular conduct or pursuit of a commercial or an economic activity by a non-stock, non-profit private organization.

• C. Isolated services in the Philippines by non-resident foreign persons.

• D. Isolated sale of goods or services.

Statement 1: Non-stock and nonprofit private organizations which sell exclusively to their members in the regular conduct or pursuit of commercial or economic activity are exempt from value added tax.

Statement 2: Government entities engaged in commercial or economic activity are generally exempt from value-added tax

• A. Both statements are correct.

• B. Both statements are incorrect.

• C. Only the first statement is correct.

• D. Only the second state statement is correct.

The term "in the course of trade or business" does not include

• A. Regular conduct or pursuit of a commercial or economic activity.

• B. Incidental business transactions.

• C. Transactions by any person, regardless of whether or not the person engaged therein is a non-stock, non-profit private organization (irrespective of the disposition of its net income and whether or not it sells exclusively to members) or government entity.

• D. None of the above

A store sold a product for P44,800 inclusive of VAT. What is the sales amount?

• A. P40,000

• B. P42,500

• C. P38,000

• D. P36,500

A customer paid P22,400 for a service, VAT included. How much is the VAT amount?

• A. P2,240

• B. P2,400

• C. P2,680

• D. P2,700

How do you determine the VAT amount from a VAT-inclusive price?

• A. Multiply the total price by 12%

• B. Divide the total price by 112%, then multiply by 12%

• C. Subtract 12% from the total price

• D. Multiply the total price by 112%

A supplier sold equipment to a company for P75,000 exclusive of VAT. What is the VAT amount?

• A. P7,500

• B. P9,000

• C. P8,500

• D. P10,500

A consulting firm charged a client P95,000 for services, exclusive of VAT. What is the VAT amount?

• A. P11,400

• B. P12,500

• C. P10,800

• D. P9,900